13th Congress Proceedings
Towards A New Information System For Farm Management - Changing The Accounting System For Better Environmental Reporting
The management of information flows becomes increasingly important for creating continuity of farm firms and for protection of the environment. Traditional information management of Dutch farm firms depends heavily on ex post reporting on farm outputs, of product as well as environmental impacts. Ex post information have only limited significance for future planning and for forecasting developments in the business environment. Often, yearly fiscal reports provide the only basic information for farm planning. Several developments urge for reorganisation of the information system: - the need for regular reporting on outputs that harm the environment (as is the case with the output of manure in the hog chain); - changes in the business structure due to larger scale in production (from farm firm to plc); - changes in transaction and market structures, as is the case with the limitation of the role of traditional auctions and the decreasing role of co-ops and guaranteed purchase of output Contracts, in stead of market and co-operative relationships are increasingly of importance for ensuring the continuity in business income. - changes in consumer preferences and product-differentiation; these factors urge for the need of instruments to be better able to plan production and sales. Farm-firms have only limited information available for planning and monitoring business output. The economic and natural environments urge for the need of reorganisation of the farm information-system. Especially the environment is demanding for regular data- exchange between governmental agencies and farm-firms, and between farm-firms and other participants in agricultural chains. The problem that is addressed in this paper is on what aspects to reorganize the information system, to be better able to plan and monitor environmental impacts of the farm-firm. Environmental measures in chains, supporting sustainability, rely on information of environmental impacts and their returns (see extensively: Bouma c.s. 1995). More specifically, information on environmental performance is of importance for different reasons (Bremmers, 2000): - the introduction of obligatory environmental reports creates the necessity of disclosure of risks and returns throughout the chain. The governmental policy on sustainable development stimulates public reporting on environmental impacts. - changes in product configuration, because of environmental requirements, should be valued on available information with respect to the profitability of alternative product-configurations. - environmental policy is directed at pollution prevention in early stages of the product chain and the avoidance of ‘end-of-pipe’-measures. Since it can be expected that in practice environmental measures are taken more willingly if ‘pollution prevention pays’, environmental performance indicators should inform about the consequences of alternate environmental strategies (Bremmers, Hagelaar & De Regt, 1996). The paper aims at confronting traditional (fiscal) reporting with the administrative requirements in modern farm management. It aims especially at formulating leading indicators for management and control with respect to environmental issues.