New Economics Papers
on Agricultural Economics
Issue of 2006‒01‒29
four papers chosen by

  1. Impact analysis of cotton subsidies on poverty: A CGE macro-accounting approach applied to Mali By Dorothée Boccanfuso; Luc Savard
  2. Incomplete contracts and investment : a study of land tenancy in Pakistan By Mansuri, Ghazala; Jacoby, Hanan G.
  3. Exploring the linkages between poverty, marine protected area management, and the use of destructive fishing gear in Tanzania By Silva, Patricia
  4. Competition with mandatory labeling of genetically modified products By Toolsema, Linda

  1. By: Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrooke); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: In this paper, we construct the first country specific CGE model for Mali with a micro-simulation component to analyze the poverty and inequality changes of removing cotton subsidies in developed countries. We used the macro-accounting approach proposed by Chen and Ravallion (2004). This issue has attracted significant attention as is has contributed to stall the broader trade agenda. Research on the issue has been mainly done with partial equilibrium analysis with a few exceptions. We use the first CGE-micro-simulation model to investigate. A 17 sectors CGE model with almost 5000 households is used to demonstrate that removal of subsidies on cotton will contribute to significant decrease in poverty in Mali. Our results show that combining the cotton subsidies removal to other agricultural subsidies does not attenuate the positive effects observed. We also show that the subsidies removal would marginally contribute to decrease inequality in Mali.
    Keywords: computable general equilibrium model, micro-simulation, poverty analysis, income distribution, agricultural subsidies
    JEL: D58 D31 I32 Q17
    Date: 2006
  2. By: Mansuri, Ghazala; Jacoby, Hanan G.
    Abstract: When contracts are incomplete, relationship-specific investments may be underprovided due to the threat of opportunistic expropriation or holdup. The authors find evidence of such underinvestment on tenanted land in rural Pakistan. Using data from households cultivating multiple plots under different tenure arrangements, they show that land-specific investment is lower on leased plots. This result is robust to the possible effects of asymmetric information in the leasing market. Greater tenure security also increases land-specific investment on leased plots. Moreover, variation in tenure security appears to be driven largely by heterogeneity across landlords, suggesting that reputation may be important in mitigating the holdup problem.
    Keywords: Investment and Investment Climate,Municipal Housing and Land,Contract Law,Economic Theory & Research,Real Estate Development
    Date: 2006–02–01
  3. By: Silva, Patricia
    Abstract: Coastal resources in Tanzania have come under increasing pressure over the past three decades, which has led to a significant decline in the biodiversity and productivity of coastal ecosystems. The livelihoods of coastal communities that directly depend on these resources are consequently under increasing threat and vulnerability. Marine protected areas (MPAs) are one tool for managing coastal and marine resources that have been increasingly used in Tanzania. Promotion of alternative income generating activities (AIGAs) is often a component of MPA management strategies to reduce fishing pressure and address poverty concerns. However, empirical evidence on whether these AIGAs are successful in reducing pressure on fisheries, or their impact on poverty, is scarce and inconclusive. This paper seeks to contribute to this debate by investigating the linkages between household characteristics, MPA activities, and household choice of fishing gear. The empirical analysis is based on household survey data from a sample of villages located along the coast of mainland Tanzania and Zanzibar. The author finds that some aspects of poverty increase the likelihood of using destructive fishing gear. MPAs do not directly affect household choice of fishing gear. However, households participating in AIGAs are less likely to use destructive fishing gear, suggesting that MPA support to these activities in Tanzania has a positive influence on household choice of fishing gear. The author also finds the use of destructive fishing gear is associated with higher consumption levels, whereas participation in AIGAs does not significantly affect household consumption levels.
    Keywords: Water Conservation,Environmental Economics & Policies,Fishing Industry,Wildlife Resources,Coastal and Marine Resources
    Date: 2006–02–01
  4. By: Toolsema, Linda (Groningen University)
    Abstract: In April 2004, the European Union adopted a new legislative framework for genetically modified (GM) organisms. This framework regulates the placing on the market of GM products, and demands these products to be labeled as such. We present a duopoly model with vertical differentiation and mandatory labeling, where one firm produces the conventional product. We assume the GM product to have lower marginal cost, and lower value to consumers. We analyze the effects of introducing the GM good on output, prices, and welfare. We also study contamination and costly testing of convential goods.
    Date: 2005

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