Effects of management information from FADN on profitability of Dutch potted-plant firms

The Dutch Farm Accountancy Data Network (FADN) provides managerial reports to participants of the network. This article analyzes the impact of this type of management information on the profitability of agricultural producers. A dual system of input demand and output supply equations is applied to measure the effect of management information. The approach is applied to a panel data set of Dutch potted-plant firms over the period of 1975¿1995. Management information provided by the FADN resulted in savings in materials and services and a more intensive use of energy. Shadow prices of structure, machinery, and labor increased as a result of management information. The results show that management information is more likely to have a positive effect on profitability of potted-plant firms in the long run than in the short run. The results suggest that the availability of management information allows firms to operate on a larger scale in the long run.