New Economics Papers
on Agricultural Economics
Issue of 2005‒02‒27
seven papers chosen by

  1. Scenarios for modelling trade policy effects on the multifunctionality of european agriculture By Janet Dwyer; David Baldock; Hervé Guyomard; Jerzy Wilkin; Dorota Klepacka
  2. Multilateral market-access reforms of the Doha Round: a preliminary assessment of implications for EU agricultural trade By Wusheng Yu; Hans G. Hensen
  3. WTO Agricultural Negotiations: a comparison of the Harbinson proposal and the Swiss Formula By Martina Brockmeier; Marianne Kurzweil; Janine Pelikan; Petra Salamon
  4. Economic and Environmental Co-benefits of Carbon Sequestration in Agricultural Soils: Retiring Agricultural Land in the Upper Mississippi River Basin By Feng, Hong-Li; Kurkalova, Lyubov; Kling, Catherine L.; Gassman, Philip W.
  5. Evaluating the Saskatchewan Short-Term Hog Loan Program By Lien, Donald; Hennessy, David A.
  6. On the Early Holocene: Foraging to Early Agriculture By Nicolas Marceau; Gordon Myers
  7. Combining the Water Framework Directive with Agricultural Policy Scenarios: A Multi-Objective Analysis for the Future of Irrigated Agricultural in Portugal By António Cipriano Pinheiro; João Paulo Saraiva

  1. By: Janet Dwyer; David Baldock; Hervé Guyomard; Jerzy Wilkin; Dorota Klepacka (IEEP)
    Abstract: The ENARPRI partners agreed in February 2004 to prepare a precise specification for the scenarios that partners would attempt to model in their own national contexts, to examine the impacts of trade-related changes upon the multifunctionality of EU agriculture. This paper outlines a suite of five scenarios covering anticipated domestic (EU) policy under different possible outcomes from the Doha round, broadly based upon the status quo (with mid-term review), full decoupling of domestic support and full decoupling plus reductions in (decoupled) domestic support, with variants in relation to export subsidies and the scale of pillar 2 measures. In all cases it is recognised that national or sub-national models will require an additional level of national or regional specification before they can be run, and that each national team will be required to do this drawing upon their own domestic knowledge and discussion with relevant experts. Each of the models that will be used to undertake these analyses is then briefly reviewed to identify its general approach and the multifunctionality indicators that can be covered. These indicators are then set in the broader context that considers other potential indicators of multifunctionality and their rationales. The paper concludes with some additional commentary about the significant differences, and thus the difficulties, of attempting to undertake this exercise for any of the new member states.
    Date: 2005–01
  2. By: Wusheng Yu; Hans G. Hensen (FOI Food and Resource Economics Institute)
    Abstract: The July package of the Doha Round of trade negotiations stipulates that a tiered-formula approach should be used to significantly reduce market access barriers across countries, implying that the EU would have to make larger cuts to its high external tariffs, in comparison with many other WTO members such as the US. This paper provides a preliminary assessment of the likely impact of the tiered-formula reform approach on EU agricultural sectors. Numerical simulations of a multilateral market-access reform scenario show that such cuts would lead to across-the-board decreases in intra-EU trade flows, as compared with a baseline projection. While intra-EU trade flows would decrease, the EU’s trade with the rest of the world would increase. Yet such increases would not be symmetric – imports into the EU would increase more than exports, resulting in larger external trade deficits or smaller external trade surpluses in many EU agricultural products. Further, the resulting adjustments in member states’ production and net trade positions are not equal: the new member states would generally lose part of their export shares in the EU market to external competitors, as highlighted in the cases of bovine meat and dairy products. Finally, simulation results show that although EU welfare as a whole improves, the distribution of such gains across EU member states is uneven. EU-15 countries generally gain from improved efficiency as a result of the reform. The new member states, however, will only experience marginal efficiency improvements but will likely suffer terms-of-trade losses, thereby losing some of the related benefits of joining the EU (as projected in the baseline case).
    Date: 2005–01
  3. By: Martina Brockmeier; Marianne Kurzweil; Janine Pelikan; Petra Salamon (FAL Federal Agricultural Research Centre)
    Abstract: The WTO negotiations of the Doha round are a key issue in the public debate. This paper analysis the effects of different market access option on the basis of general equilibrium model. An extended version of the GTAP model is used to firstly project a base run including the Agenda 2000, the EU enlargement, the EBA agreement and the MTR. The policy simula-tion includes the WTO negotiations. Here, it is differentiated between three different experi-ments. While the first experiment simply implements the HARBINSON 1½ proposal, the sec-ond one additionally takes into account an adoption of the EBA agreement by all industrial-ized countries. In the third experiment, the tariff cuts are based on the Swiss Formula using a coefficient of 33 instead of the tiered approach of HARBINSON. Based on the experiments, it can be shown that world wide the high protected sectors experiences severe losses relative to the application of the HARBINSON 1½ approach. The comparison also shows that the highly protected beef and other processed food products sectors of the EU are particularly affected by the Swiss Formula.
    Date: 2005–02
  4. By: Feng, Hong-Li; Kurkalova, Lyubov; Kling, Catherine L.; Gassman, Philip W.
    Abstract: This study investigates the carbon sequestration potential and co-benefits from policies aimed at retiring agricultural land in the Upper Mississippi River Basin, a large, heavily agricultural area. We extend the empirical measurement of co-benefits from the previous focus on environmental benefits to include economic transfers. These transfers have often been mentioned as a co-benefit, but little empirical work measuring the potential magnitude of these transfers has previously been undertaken. We compare and contrast five targeting schemes, each based on maximizing different physical environmental measures, including carbon sequestration, soil erosion, nitrogen runoff, nitrogen leaching, as well as the area enrolled in the program. In each case, the other environmental benefits and economic transfers are computed. We find that the geographic distribution of co-benefits (including economic transfers) varies significantly with the benefit targeted, implying that policy design related to targeting can have very important implications for both environmental conditions and income distributions in sub-regions.
    Date: 2005–02–22
  5. By: Lien, Donald; Hennessy, David A.
    Abstract: The Saskatchewan short-term hog loan program of 2002 provided a non-market credit line to participating hog producers. The repayment conditions for cash advances committed to by the provincial government depend on later hog prices, and so the program has derivative contract attributes. We model the contracts and use an estimated spot price stochastic process to establish summary statistics for producer benefits from the program.
    Date: 2005–02–24
  6. By: Nicolas Marceau; Gordon Myers
    Abstract: We consider a world in which the mode of food production, foraging or agriculture, is endogenous, and in which technology grows exogenously. Within a model of coalition formation, we allow individuals to rationally form cooperative communities (bands) of foragers or farmers. At the lowest levels of technology, equilibrium entails the grand coalition of foragers, a cooperative structure which avoids over-exploitation of the environment. But at a critical state of technology, the cooperative structure breaks down through an individually rational splintering of the band. At this stage, there can be an increase in work and through the over-exploitation of the environment, a food crisis. In the end, technological growth may lead to a one-way transition from foraging to agriculture.
    Keywords: Foraging, Agriculture, Transition, Coalition Formation, Cooperation
    JEL: N50 O13
    Date: 2005
  7. By: António Cipriano Pinheiro (Department of Economics, University of Évora); João Paulo Saraiva (Department of Environmental Science and Technology, Imperial College London)
    Abstract: It is clear that the successful management of water resources must take into account the influence of policies affecting the irrigated agriculture sector. Among these, the importance of the Common Agricultural Policy (CAP) and of the Water Framework Directive (WFD) is well recognised. In Portugal, more than 606,000 hectares (INE 2001b) are allocated to irrigated agriculture, which accounts for 74.8% of all water uses (INAG 2002). To study the combined effect of these policies, two irrigated regions of Portugal, Baixo Alentejo and Lezíria do Tejo, were analysed in case studies. Multi-Criteria Decision Making models (MCDM) were applied to characterise farmers’ decision-making attitudes of the main irrigated agriculture systems of these regions. The implications of environmental (WFD) and agricultural (CAP) policy change are assessed by reproducing farmers’ decision-making behaviour. Simulation results indicate that changes in these policies are conducive to substantial adjustments within the irrigated agriculture sector. This study demonstrates that the consequences of implementing the WFD are dependent both on the water price level set by the WFD and on the agricultural policy strategy in place.
    Keywords: Water Framework Directive; Multi-objective Programming; Irrigated Agriculture; Water Economics; Portugal
    JEL: Q25 Q15 C61
    Date: 2005

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