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on Agricultural Economics |
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Issue of 2006‒04‒22
58 papers chosen by |
| By: | FAPRI Staff |
| Abstract: | Senator Chambliss, chair of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, asked the Food and Agricultural Policy Research Institute (FAPRI) to analyze the latest U.S. proposal to the Doha round of WTO negotiations (see Appendix 1, U.S. Proposal for WTO Agriculture Negotiations, USTR, October 10, 2005). While the U.S. proposal provides many concrete steps to reduce farm support and trade distortions, it does not provide all necessary information for quantitative analysis of the proposal. FAPRI, through consultations with economists and staffers of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, Office of the United States Trade Representative, and U.S. Department of Agriculture, elaborated a complementary set of policy assumptions to carry the quantitative analysis. The analysis is conducted in deviation from the baseline of the FAPRI 2005 U.S. and World Agricultural Outlook. New policies put in place since the 2005 baseline was established have been accommodated to separate the impact of the policy scenario from the full set of policy assumptions. |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp417&r=agr |
| By: | GianCarlo Moschini (Center for Agricultural and Rural Development (CARD)); Harun Bulut; Luigi Cembalo |
| Abstract: | Evaluating the possible benefits of the introduction of genetically modified (GM) crops must address the issue of consumer resistance as well as the complex regulation that has ensued. In the European Union (EU) this regulation envisions the "co-existence" of GM food with conventional and quality-enhanced products, mandates the labelling and traceability of GM products, and allows only a stringent adventitious presence of GM content in other products. All these elements are brought together within a partial equilibrium model of the EU agricultural food sector. The model comprises conventional, GM and organic food. Demand is modelled in a novel fashion, whereby organic and conventional products are treated as horizontally differentiated but GM products are vertically differentiated (weakly inferior) relative to conventional ones. Supply accounts explicitly for the land constraint at the sector level and for the need for additional resources to produce organic food. Model calibration and simulation allow insights into the qualitative and quantitative effects of the large-scale introduction of GM products in the EU market. We find that the introduction of GM food reduces overall EU welfare, mostly because of the associated need for costly segregation of non-GM products, but the producers of quality-enhanced products actually benefit. |
| Keywords: | biotechnology, differentiated demand, genetically modified crops, identity preservation, innovation, welfare. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp411&r=agr |
| By: | Olarreaga, Marcelo; Dutoit, Laure; Cadot, Olivier |
| Abstract: | The main objective of this paper is to provide estimates of the cost of moving out of subsistence for Madagascar ' s farmers. The analysis is based on a simple asset-return model of occupational choic e. Estimates suggest that the entry (sunk) cost associated with moving out of subsistence can be quite large - somewhere between 124 and 153 percent of a subsistence farmer ' s annual production. Our results make it possible to identify farm characteristics likely to generate large gains, if moved out of subsistence, yielding useful information for the targeting of trade-adjustment assistance programs. |
| Keywords: | Markets and Market Access,Rural Poverty Reduction,Economic Theory & Research,Agribusiness,Access to Markets |
| Date: | 2006–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3881&r=agr |
| By: | Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Chad E. Hart (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | The Agricultural Risk Protection Act greatly increased the expected marginal net benefit of farmers buying high-coverage crop insurance policies by coupling premium subsidies to coverage level. This policy change, combined with cross-sectional variations in expected marginal net benefits of high-coverage policies, is used to estimate the role that premium subsidies play in farmers' crop insurance decisions. We use county data for corn, soybeans, and wheat to estimate regression equations that are then used to obtain insight into two policy scenarios. We first estimate that eventual adoption of actuarially fair incremental premiums, combined with current coupled subsidies, would increase farmers' purchase of high-coverage policies by almost 400 percent from 1998 levels across the three crops and two plans of insurance included in the analysis. We then estimate that a return to decoupled subsidies would decrease farmers' high-coverage purchase decisions by an average of 36 percent. |
| Keywords: | Agricultural Risk Protection Act, crop insurance, premium subsidies. |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp393&r=agr |
| By: | Chad E. Hart (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)) |
| Abstract: | The federal government currently runs two major price support programs in agriculture, the marketing loan and countercyclical payment (CCP) programs. While these programs are both targeted at providing producer price protection, they have different political and financial costs associated with them. We outline these costs and project the effects of various loan rate changes on these programs for eight crops (barley, corn, cotton, oats, rice, sorghum, soybeans, and wheat) for 2005. Loan rate changes affect the price support programs by changing the payment rate producers receive when payments are triggered. We find that the crop's relative price strength versus its loan rate and the relationship between CCP base production and 2005 expected production have the largest influence on how loan rate changes affect outlays from the price support programs for the various crops. Of these crops, cotton is the only one that would be relatively unaffected by loan rate shifts. Corn and soybeans would see the largest declines in overall expenditures from price support programs if loan rates were decreased. Oats and soybeans would experience the largest percentage losses. However, the results also show that the federal government could maintain an agricultural price support structure at a lower cost than it is currently paying. The reduction in cost often comes in situations where the current array of price support programs overcompensates producers for price shortfalls. This shift would also likely find greater acceptance under the World Trade Organization (WTO) agriculture guidelines than would the current structure. For an administration that is looking to rein in deficit spending while at the same time negotiating new WTO guidelines, moving to lower loan rates could be an answer. |
| Keywords: | agricultural loan rates, agricultural marketing loan program, agricultural price supports, countercyclical payments (CCPs), loan deficiency payments (LDPs). |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-bp44&r=agr |
| By: | Alan Matthews; Tom Giblin |
| Abstract: | This paper discusses issues raised for OECD agricultural and agriculture-related policies by the policy coherence for development perspective. These issues are organised in a five-fold typology covering OECD domestic agricultural policy, agricultural trade policy, regulatory policies, development cooperation policy as well as the coherence of developing country policies. Changes in OECD agricultural policy have varying impacts on different groups of developing countries, and on different groups within developing countries. The message for policy coherence for development analysis is that specifics count, and that impacts need to be assessed on a country by country basis. Bringing a policy coherence perspective to the debates on OECD agricultural policy reform requires a careful classification of the various channels whereby developing countries are impacted by this reform, not least so as to identify ways in which development assistance can be used so as to maximise the opportunities it creates but also to help to mitigate adverse impacts where they occur. The paper concludes with a checklist of actions which might be taken by the development policy community to improve the coherence of agricultural and development policy with development objectives. |
| Keywords: | policy coherence, agricultural policy, Millennium Development Goals, agricultural trade |
| JEL: | F13 Q17 Q18 |
| Date: | 2006–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp112&r=agr |
| By: | Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Chad E. Hart (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | The Agricultural Risk Protection Act (ARPA) has largely met its objectives of inducing farmers to increase their use of the crop insurance program. Both insured acreage and coverage levels have increased dramatically in response to ARPA's large increase in premium subsidies. An unintended consequence of the larger subsidies is a dramatic increase in the incentive for farmers to insure their crops under optional units, that is, insurance at the field level rather than at the farm or crop level. The expected rate of return to farmers who choose to invest additional premium dollars to move to optional unit coverage ranges from a low of 61 percent at the 85 percent coverage level to 144 percent at the 65 percent coverage level. This explains why the majority of farmers choose optional unit coverage even though the alternative unit structures provide identical insurance guarantees at a substantially lower cost. We consider two policy options to eliminate the unintended consequences of ARPA subsidies. The first would simply eliminate the ability of farmers to insure their crops under optional units. This change would save taxpayers more than $300 million (if 90 percent of current acreage is insured under optional units) and would not decrease the insurance guarantee of any farmer. However, transfers to farmers, crop insurance companies, and crop insurance agents would all fall under this policy option, decreasing its political attractiveness. The second alternative would decouple per-acre premium subsidies from a farmer's choice of unit coverage. Farmers would benefit from the ability to capture all the premium savings that would occur as they move to other unit structures. It is likely that there is a level of decoupled subsidy that would make both farm groups and taxpayers better off. Splitting farm groups off the blocking coalition increases the likelihood of acceptance of this proposal. Program integrity would be increased by dramatically increasing the incremental cost of farmers insuring their crops under optional units. |
| Keywords: | Agricultural Risk Protection Act (ARPA), crop insurance, optional units. |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-bp45&r=agr |
| By: | Silvia Secchi (Center for Agricultural and Rural Development (CARD)); Manoj Jha (Center for Agricultural and Rural Development (CARD)); Lyubov A. Kurkalova; Hongli Feng (Center for Agricultural and Rural Development (CARD)); Philip W. Gassman (Center for Agricultural and Rural Development (CARD)); Catherine L. Kling (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | This study investigates the implications of treating different environmental benefits as the primary target of policy design. We focus on two scenarios, estimating for both of them in-stream sediment, nutrient loadings, and carbon sequestration. In the first, we assess the impact of a program designed to improve water quality in Iowa on carbon sequestration, and in the second, we calculate the water quality impact of a program aimed at maximizing carbon sequestration. In both cases, the policy instrument is the retirement of land from agricultural production. Our results, limited to the state of Iowa, and to the case of set-aside for water quality or carbon sequestration purposes, indicate that the amount of co-benefits depends on what indicators are used to measure water quality. In general, this study shows that improving "water quality" in the sense of reducing nutrient or sediment loadings is too vague. Even if it is taken to refer to in-stream nutrients, because the responses of nitrogen and phosphorus to conservation efforts are not well correlated, this terminology may not provide much guidance. |
| Keywords: | carbon sequestration, co-benefits, environmental benefits targeting, Iowa, land set-aside, water quality. |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp389&r=agr |
| By: | Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Chad E. Hart (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | Critics of the U.S. proposal to the World Trade Organization (WTO) made in October 2005 are correct when they argue that adoption of the proposal would significantly reduce available support under the current farm program structure. Using historical prices and yields from 1980 to 2004, we estimate that loan rates would have to drop by 9 percent and target prices would have to drop by 10 percent in order to meet the proposed aggregate Amber Box and Blue Box limits. While this finding should cheer those who think that reform of U.S. farm programs is long overdue, it alarms those who want to maintain a strong safety net for U.S. agriculture. The dilemma of needing to reform farm programs while maintaining a strong safety net could be resolved by redesigning programs so that they target revenue rather than price. Building on a base of 70 percent Green Box income insurance, a program that provides a crop-specific revenue guarantee equal to 98 percent of the product of the current effective target price and expected county yield would fit into the proposed aggregate Amber and Blue Box limits. Payments would be triggered whenever the product of the season-average price and county average yield fell below this 98 percent revenue guarantee. Adding the proposed crop-specific constraints lowers the coverage level to 95 percent. Moving from programs that target price to ones that target revenue would eliminate the rationale for ad hoc disaster payments. Program payments would automatically arrive whenever significant crop losses or economic losses caused by low prices occurred. Also, much of the need for the complicated mechanism (the Standard Reinsurance Agreement) that transfers most risk of the U.S. crop insurance to the federal government would be eliminated because the federal government would directly assume the risk through farm programs. Changing the focus of federal farm programs from price targeting to revenue targeting would not be easy. Farmers have long relied on price supports and the knowledge that crop losses are often adequately covered by heavily subsidized crop insurance or by ad hoc disaster payments. Farmers and their leaders would only be willing to support a change to revenue targeting if they see that the current system is untenable in an era of tight federal budgets and WTO limits. |
| Keywords: | farm safety net, revenue targeting, U.S. farm programs, WTO. |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ias:fpaper:05-bp48&r=agr |
| By: | Tegtmeier, Erin; Duffy, Michael |
| Abstract: | This paper presents the results of a survey of community supported agriculture operations throughout the Midwest. Characteristics and profitability of the CSA's are presented. |
| Date: | 2006–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12577&r=agr |
| By: | Hongli Feng (Center for Agricultural and Rural Development (CARD)); Lyubov A. Kurkalova; Catherine L. Kling (Center for Agricultural and Rural Development (CARD)); Philip W. Gassman (Center for Agricultural and Rural Development (CARD)) |
| 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. |
| Keywords: | carbon sequestration, co-benefits, co-effects, economic transfers, environmental benefits targeting, Upper Mississippi River Basin. |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp384&r=agr |
| By: | Hongli Feng (Center for Agricultural and Rural Development (CARD)); Catherine L. Kling (Center for Agricultural and Rural Development (CARD)); Lyubov A. Kurkalova; Silvia Secchi (Center for Agricultural and Rural Development (CARD)); Philip W. Gassman (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | The United States has invested large sums of resources in multiple conservation programs for agriculture over the past century. In this paper we focus on the impacts of program interactions. Specifically, using an integrated economic and bio-physical modeling framework, we consider the impacts of the presence of working land programs on a land retirement for an important agricultural region—the Upper Mississippi River Basin (UMRB). Compared to a land retirement only program, we find that the presence of a working land program for conservation tillage results in significantly lower predicted signups for land retirement at a given rental rate. We also find that the presence of both a large working land and land retirement program can result in more environmental benefits and income transfers than a land retirement only program can achieve. |
| Keywords: | Conservation Reserve Program, conservation tillage, environmental quality, income transfer, working land programs. |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp402&r=agr |
| By: | Bjørnsen, Hild-Marte (Norwegian Institute for Urban and Regional Research); Biørn, Erik (Dept. of Economics, University of Oslo) |
| Abstract: | Farm couples' labour market responses are partly the qualitative choice of entering the ff-farm labour market and partly the continuous choice of the number of on-farm and off-farm working hours, given entry. Such a setting is interesting when examining the increasing occurrence of multiple job-holdings among farmers in western economies. This paper presents a unified framework for handling such discrete/continuous choices, involving optimisation of farm production, household consumption, and multiple job-holdings for both husband and wife. A two-equation censoring panel data model is implemented and estimated from Norwegian panel data for 342 farms observed over a ten-year period. |
| Keywords: | Labour; supply.; Agriculture.; Multiple; job-holding.; Time; allocation.; Bivariate; censoring.; Panel; data.; Heterogeneity |
| JEL: | C34 D21 J22 J43 |
| Date: | 2006–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2006_005&r=agr |
| By: | Isabelle Schluep Campo; John C. Beghin (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | We explore and investigate Japanese dairy markets. We first provide an overview of consumer demand and how it evolved after World War II. Using historical data and econometric estimates of Japanese dairy demand, we identify economic, cultural, and demographic forces that have been shaping consumption patterns. Then we summarize the characteristics of Japanese milk production and dairy processing and policies affecting them. We next describe the import regime and trade flows in dairy products. The analysis of the regulatory system of the dairy sector shows how its incentive structure affects the long-term prospects of various segments of the industry. The paper concludes with policy recommendations of how to reform the Japanese dairy sector. |
| Keywords: | consumption, dairy, Japan, milk, policy, trade. |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp401&r=agr |
| By: | Adugna Lemi |
| Abstract: | Block and Webb (2001) in food policy address the issue of the dynamics of livelihood diversification in Ethiopia. Their study uses the ratio of per capita income derived from crops to the sum of all other incomes as an indicator of livelihood diversification for the years 1989 and 1994. Their study focuses only on drought-prone areas during the survey years. The aim of the present study is to explore further the demographic and economic determinants of the dynamics of income diversification using survey data. The data used in this study cover larger and more representative sample and was colleted from rural Ethiopia during 1994 and 1997 harvest years. This study investigates not only the determinants of participation and intensity of off-farm activities, but also factors that affect the dynamics between 1994 and 1997. The results of this study attempt to answer the question: to what extent initial conditions (for instance, asset holdings, production, and crop income) prompt households to diversify to off-farm activities overtime. The results show that participation in off-farm activities is mainly driven by demographic factors, whereas land and other asset ownership as well as crop production and income affect intensity of off-farm activities. The dynamic model results show that farm families who have initially diversified to more off-farm activities subsequently realized less income diversification. Families with more initial crop production from slack harvest season subsequently realized greater income from off-farm activities in 1997. The study also confirms that it is only during slack harvest season that off-farm and on-farm activities are complement each other. |
| Keywords: | Dynamic Livelihood, Off-farm Income, Diversification, Ethiopia |
| JEL: | D1 J2 |
| URL: | http://d.repec.org/n?u=RePEc:mab:wpaper:3&r=agr |
| By: | Honeyman, Mark; Duffy, Michael |
| Abstract: | This publication uses Census of agriculture data to track geographical and other changes in the swine industry in Iowa and the U.S. |
| Date: | 2006–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12581&r=agr |
| By: | FAPRI Staff |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-fsr1&r=agr |
| By: | Duffy, Michael |
| Abstract: | This will be a book chapter in a book published as a result of a European Union study examining the marginalisation of agriculture. Marginalisation is the process where agriculture ceases to be a viable economic activity. This can happen due to many factors. |
| Date: | 2006–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12582&r=agr |
| By: | Christopher Stevens; Jane Kennan |
| Abstract: | This paper investigates how the formation of Economic Partnership Agreements (EPAs) with the EU might affect the ability of the six Development Cooperation Ireland programme countries in Sub-Saharan Africa to continue to provide protection to their domestic agri-food sectors. Various scenarios are constructed on the assumption that ‘substantially all' trade with the EU must be liberalised if the EPAs are to be compatible with WTO rules on regional trade agreements. The paper concludes that EPAs are unlikely to require major changes in existing levels of border protection provided to domestic agriculture in Ethiopia, Lesotho, Mozambique and Zambia but that the effects on Tanzania and Uganda could be greater. It argues that the preparation of a ‘defensive' EPA strategy by these countries should occur in parallel with a strategic review of agricultural trade policy. |
| Keywords: | Economic Partnership Agreements, agriculture, reciprocity |
| JEL: | Q18 Q12 |
| Date: | 2006–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp111&r=agr |
| By: | Stephan Marette (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | This paper reviews the economic effects of collective-quality promotion through a survey of the recent literature devoted to common labeling and professional groups. Benefits and costs of common labeling and professional groups for improving quality are detailed. Some empirical facts are presented, mainly focusing on some European examples, since many European countries have a long history of producer-owned marketing programs. This paper shows that in some cases the collective-quality promotion can be a successful strategy for firms/farmers. |
| Keywords: | collective-quality promotion, labeling, marketing organization, quality signals. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ias:fpaper:05-wp406&r=agr |
| By: | Alan Matthews; |
| Abstract: | This paper examines how more differentiated special treatment of developing countries might be introduced into the WTO agriculture agreement following the Doha Round negotiations. The purpose of special treatment is to facilitate developing countries to meet their food security, rural development and livelihoods concerns. The paper first reviews previous attempts to classify developing countries into foodinsecure and food-secure groups. It argues that such a classification is mainly relevant in the market access pillar of the negotiations, as other criteria for differentiation are implicit in the July 2004 Framework Agreement proposals for the domestic support and export competition pillars. The prospects for an overall agreement are limited unless developed countries feel that they have gained improved access to the markets of the more advanced and competitive agricultural exporters among developing countries. The paper argues that the latter countries might be persuaded to accept shallower SDT if it is the condition for a significant market-opening offer by developed countries. In addition, the developed countries need to build support among low-income developing countries for differentiation by making clear what a more generous SDT offer to food-insecure developing countries not currently classified as LDCs would mean. |
| JEL: | F13 Q17 |
| Date: | 2006–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp108&r=agr |
| By: | Amani Elobeid (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); John C. Beghin (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | We analyze the impact of trade liberalization, removal of production subsidies, and elimination of consumption distortions in world sugar markets using a partial-equilibrium international sugar model calibrated on 2002 market data and current policies. The removal of trade distortions alone induces a 27% price increase while the removal of all trade and production distortions induces a 48% increase by 2011/12 relative to the baseline. Aggregate trade expands moderately, but location of production and trade patterns change substantially. Protectionist OECD countries (the EU, Japan, the US) experience an import expansion or export reduction and significant contraction in production in unfettered markets. Competitive producers in both OECD countries (Australia) and non-OECD countries (Brazil, Cuba), and even some protected producers (Indonesia, Turkey), expand production when all distortions are removed. Consumption distortions have marginal impacts on world markets and location of production. We discuss the significance of these results in the context of mounting pressures to increase market access in highly protected OECD countries and the impact on non-OECD countries. |
| Keywords: | agricultural policy, Doha, domestic subsidies, sugar, trade liberalization, WTO. |
| JEL: | Q18 F10 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:04-wp356&r=agr |
| By: | Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); John C. Beghin (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Fengxia Dong (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Amani Elobeid (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Frank H. Fuller (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Holger Matthey; Simla Tokgoz (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Eric Wailes |
| Abstract: | Following a historical agreement on the EU enlargement, 10 new member states (NMS) acceded to the European Union on May 1, 2004. Although the European Union has expanded its membership in the past, this enlargement is unique in terms of its scope and diversity of the countries, area, and population involved. Thus, the effects of the EU enlargement on current and future member countries and on world commodity markets require careful consideration as the European Union is a major player in these markets. We analyze the effects of the Common Agricultural Policy (CAP) reform and enlargement on the EU-15, the NMS, and world agricultural markets. We compare three 10-year comprehensive agricultural outlook scenarios. In a "pre-enlargement" scenario, all pre-enlargement policies of the EU-15 are held in place and the 10 NMS maintain their independent economic policies and older technologies as if nothing happens. The second scenario considers the CAP reform in the EU-15. The third scenario is the 2004 Food and Agricultural Policy Research Institute (FAPRI) baseline projection, which incorporates both the CAP reforms and accession of the 10 NMS with the associated domestic and trade policy reforms and some convergence in technology within the EU-25. With prices in most commodities in the acceding countries historically below EU-15 prices, accession leads to a moderate decrease in the EU-15 prices, whereas for the 10 NMS, domestic prices of many commodities increase substantially. Holding income levels constant, consumption levels of agricultural products in these countries decrease in most instances because of higher food prices, while production levels rise. The impact of the two reforms on world markets is moderate to negligible. The CAP reform has a moderate impact on the EU-15. |
| Keywords: | CAP reform, Common Agricultural Policy, EU enlargement, European agriculture, New Member States. |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp382&r=agr |
| By: | Lyubov A. Kurkalova |
| Abstract: | The study presents a conceptual model of an aggregator who selectively pays farmers for altering farming practices in exchange for carbon offsets that the change in practices generates. Under the assumption that the offsets are stochastic and that the aggregator maximizes the sum of the offsets from the purchase that he/she can rightfully claim with a specified level of confidence subject to a budget constraint, we investigate the optimal discounting of expected carbon offsets. We use the model to estimate empirically the optimal discounting levels and costs for a hypothetical carbon purchasing project in the Upper Iowa River Basin. |
| Keywords: | carbon sequestration in agricultural soils, offset discounting, uncertainty. |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp388&r=agr |
| By: | Roger G. Ginder; Brent Hueth; Philippe Marcoul |
| Abstract: | The West Liberty Foods turkey cooperative was formed in 1996 to purchase the assets and assume operations of Louis Rich Foods (an investor-owned processing firm), which, at the time, announced the imminent shutdown of its West Liberty, Iowa, processing facility. We study the creation and performance of this "new generation" cooperative using field interviews with grower members and company management. We describe changes, before and after the buyout, in the contractual apparatus used for procuring live turkeys, and in the communication requirements, work expectations, and financial positions of growers. During the private ownership period, most of the inputs (except labor and facilities) were provided by the firm; there was substantial supervision of the growers' actions; growers faced little price and production risk; and growers' equity was due largely to ownership of land and other farm assets. Our interviews reveal that, after cooperative formation, growers were exposed to considerable additional risk; monitoring of growers by the firm was less intensive; grower time and effort commitments to turkey production increased substantially; and a significant fraction of firm (cooperative) equity came from growers' willingness to leverage their farm and personal assets (and hence indirectly their existing relationships with local lenders). We argue that some of these changes are consistent with a financial contract where asset pledging and its corollary risk generate higher work effort by growers and a reduction in agency rents. These economies likely compensate for an organizational deadweight loss traditionally associated with cooperative governance. |
| Keywords: | Cooperatives, procurement, financial contracting, agriculture. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp408&r=agr |
| By: | Miguel Carriquiry; Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Chad E. Hart (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | The effect of sampling error in estimation of farmers' mean yields for crop insurance purposes is explored using farm-level corn yield data in Iowa from 1990 to 2000 and Monte Carlo simulations. We find that sampling error combined with nonlinearities in the insurance indemnity function will result in empirically estimated crop insurance rates that exceed actuarially fair values by between 2 and 16 percent, depending on the coverage level and the number of observations used to estimate mean yields. Accounting for the adverse selection caused by sampling error results in crop insurance rates that will exceed fair values by between 42 and 127 percent. We propose a new estimator for mean yields based on a common decomposition of farm yields into systemic and idiosyncratic components. The proposed estimator reduces sampling variance by approximately 45 percent relative to the current estimator. |
| Keywords: | actual production history (APH), crop insurance, mean yields estimation, sampling error. |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp387&r=agr |
| By: | Brent Hueth; Maro Ibarburu; James Kliebenstein |
| Abstract: | We study business organization and coordination of specialty-market hog production using a comparative analysis of two Iowa pork niche-marketing firms. We describe and analyze each firm's management of five key organizational challenges: planning and logistics, quality assurance, process verification and management of "credence attributes," business structure, and profit sharing. Although each firm is engaged in essentially the same activity, there are substantial differences across the two firms in the way production and marketing are coordinated. These differences are partly explained by the relative size and age of each firm, thus highlighting the importance of organizational evolution in agricultural markets, but are also partly the result of a formal organizational separation between marketing and production activities in one of the firms. |
| Keywords: | Specialty hogs; coordination; contracting; organizational design; niche markets. |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp415&r=agr |
| By: | David A. Hennessy (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | The spatial dimension of agricultural production is important when a communicable disease enters a region. This paper considers two sorts of biosecurity risk that producers can seek to protect against. One concerns the risk of spread: that neighboring producers do not take due care in protecting against being infected by a disease already in the region. In this case, producer efforts substitute with those of near neighbors. For representative spatial production structures, we characterize Nash equilibrium protection levels and show how spatial production structure matters. The other sort of risk concerns entry: that producers do not take due care in preventing the disease from entering the region. In this case, producer heterogeneity has subtle effects on welfare loss due to strategic behavior. Efforts by producers complement, suggesting that inter-farm communication will help to redress the problem. |
| Keywords: | circle and line topologies, complements and substitutes, epidemic, public good. |
| JEL: | D20 H4 Q1 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp413&r=agr |
| By: | Christopher Stevens; Jane Kennan |
| Abstract: | The 1 August 2004 Framework Agreement stated that developing countries would have access to a Special Safeguard Mechanism and Special Products designation as part of special and differential treatment within a new WTO Doha Round agricultural agreement. This was confirmed in the Ministerial Declaration following the WTO Hong Kong Ministerial in December 2005. This paper discusses the potential usefulness of these instruments for the six programme countries of Development Cooperation Ireland, and what further research is desirable to help countries define them in a way that maximises their usefulness. |
| JEL: | Q18 Q12 |
| Date: | 2006–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp110&r=agr |
| By: | Donald Lien; David A. Hennessy (Center for Agricultural and Rural Development (CARD)) |
| 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. |
| Keywords: | agricultural policy, derivative contract, domestic support, international trade agreements. |
| JEL: | Q1 G3 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp385&r=agr |
| By: | S. Patricia Batres-Marquez (Center for Agricultural and Rural Development (CARD)); Roxanne Clemens (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Helen H. Jensen (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)) |
| Abstract: | The structure of the pork production, slaughter, and processing sectors in Mexico has changed significantly since implementation of the North American Free Trade Agreement (NAFTA) and with rising income and increased urbanization. Today, Mexico's pork industry has become more integrated and achieved greater production efficiencies in response to increasing demand for better product quality and stricter sanitary practices in production and processing pork for both the domestic market and for export. However, despite these improvements Mexico's pork industry has not kept up with the rising domestic demand, and Mexico has become an increasingly important market for the United States. A key to the development of increased trade in both live animals and pork is growth of federally inspected or "Tipo Inspección Federal" (TIF) plant production, as well as development of marketing channels and product promotion that support high-quality consumer meat products. |
| Keywords: | live hogs and pork trade, Mexico, NAFTA, pork industry, pork slaughter, TIF plants. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:06-mbp10&r=agr |
| By: | Vincent Gitz (CIRED - Centre International de Recherche sur l'Environnement et le Développement - http://www.centre-cired.fr - [CNRS : UMR8568] - [] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale du Génie Rural des Eaux et des Forêts][Ecole Nationale des Ponts et Chaussées]); Philippe Ciais (LSCE - Laboratoire des sciences du climat et de l'environnement - http://www.lsce.cnrs-gif.fr - [CNRS : UMR1572][CEA] - [] - []) |
| Abstract: | Abstract. The expansion of crop and pastures to the detriment of forests results into an increase in atmospheric CO2. A first obvious cause is the loss of forest biomass and soil carbon during and after conversion. A second, generally ignored cause, is the reduction of the residence time of carbon when for example forests or grasslands are converted to cultivated land. This decreases the sink capacity of the global terrestrial biosphere, and thereby may amplify the atmospheric CO2 rise due to fossil and land-use carbon release. For the IPCC-A2 future scenario, characterized by high fossil and high land-use emissions, we show that the land-use amplifier effect adds 61 ppm extra CO2 in the atmosphere by 2100 as compared to former treatment of land-use processes in carbon models. Investigating the individual contribution of each of the 6 land-use transitions (forest - crop, forest - pasture, grassland -crop) to the amplifier effect indicates that the clearing of forest and grasslands to arable lands explains most of the CO2 amplification. The amplification effect is 50% higher than in a previous analysis by the same authors which did not consider neither the deforestation to pastures nor the ploughing of grasslands. Such an amplification<br />effect is further examined in sensitivity tests where the net primary productivity is considered independant of atmospheric CO2. We also show that land-use changes which have already occurred in the recent past have a strong inertia at releasing<br />CO2, and will contribute to about 1/3 of the amplification effect by 2100. These results suggest that there is an additionnal atmospheric benefit of preserving pristine ecosystems with high turnover times. |
| Keywords: | land use; atmospheric CO2; fossil fuel |
| Date: | 2006–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00009828_v1&r=agr |
| By: | Frank H. Fuller (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Jikun Huang; Hengyun Ma; Scott Rozelle |
| Abstract: | With the rapid growth in China's dairy industry, a number of recent papers have addressed either the supply or the demand trends for dairy products in China. None, however, presents a systematic explanation for the recent growth in both the supply and demand for dairy products. The goal of this paper is to sketch a more comprehensive picture of China's dairy sector and to assess the nature of the sector's development in the coming decades. Drawing upon several empirical studies, we examine the trends in dairy product consumption to create a composite picture of the factors underlying the recent growth. We also empirically investigate the sources of production gains in milk supply and assess the relative importance of expanding herd size, changes in the nature of production, technological change, and improvements in efficiency to the overall growth of milk production. |
| Keywords: | China, consumption, dairy, milk supply, stochastic production frontier, total factor productivity. |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp394&r=agr |
| By: | James Roumasset (Department of Economics, University of Hawaii at Manoa) |
| Abstract: | Agricultural development thinking has gone through several stages of fad and fancy, often without an understanding of previous fallacies. Its current doldrums are unfortunate given the unrivaled importance of agricultural development for poverty reduction in most development countries. After reviewing several policy and program areas, lessons are synthesized, and a forwardlooking research framework suggested, especially regarding role of specialization in the evolution of economic organization. The corresponding role of government is seen to be the facilitation of economic cooperation, rather than social engineering. |
| JEL: | Q12 Q15 O12 L23 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200604&r=agr |
| By: | Chengyan Yue; Helen H. Jensen (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Daren S. Mueller; Gail R. Nonnecke; Mark L. Gleason |
| Abstract: | A mixed probit model was applied to survey data to analyze consumers' willingness to buy apples with cosmetic damage caused by the sooty blotch and flyspeck (SBFS) disease complex. The analysis finds consumers will pay a premium for organic production methods and for apples with low amounts of SBFS damage. Behavioral variables such as experience in growing fruit significantly affect the willingness to buy apples of different damage levels. Consumers' tolerance of very blemished apples is limited and they trade off production technology attributes for cosmetic appearance. Better understanding of this trade-off is important to organic producers' decisions about disease control. |
| Keywords: | apples, sooty blotch and flyspeck, organic, cosmetic damage, willingness to buy, mixed probit model. |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp419&r=agr |
| By: | S. Patricia Batres-Marquez (Center for Agricultural and Rural Development (CARD)); Helen H. Jensen (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)) |
| Abstract: | Evidence from recent U.S. food consumption surveys provides new information on the distribution of rice consumption, the characteristics of rice consumers, and the diets of people who consume rice. Recently available data from nationally representative surveys of food consumed by individuals in the United States allowed comparison of consumption today (2001-02) with consumption in the mid-1990s. Data come from the Continuing Survey of Food Intakes by Individuals (1994-96) and the National Health and Nutrition Examination Survey (2001-02). Rice is consumed by a significant portion of the U.S. adult population. In 2001-02, over 18 percent (18.2 percent) of adults reported eating at least half a serving of white or brown rice in one day of observed intake. This share was slightly higher than that of 1994-96 (17.4 percent). Compared with others, individuals who consumed at least half a serving of white or brown rice in the observed day of intake consumed a smaller share of calories per day from fat and saturated fat; less discretionary fat or added sugar; and more fiber, dietary folate, fruit, vegetables, and enriched grains. Consumers eating rice were more likely to eat a diet that included choices of foods consistent with the 2005 U.S. Dietary Guidelines. |
| Keywords: | dietary guidelines, rice consumption. |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-sr100&r=agr |
| By: | David A. Hennessy (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | We develop a dynamic capital valuation model in which each farm can take an action with farm-varying cost to increase the probability of not contracting a disease. In the presence of infection externalities, circumstances are identified under which multiple equilibria exist and where the one involving the most extensive set of action takers is socially optimal. It is suggested that costly capital markets are one factor in determining the extent of endemic disease in a region. The introduction of frictions, such as dealing with a cumbersome veterinary public health bureaucracy, can enhance social welfare by encouraging precautionary biosecurity actions. Some technical innovations can reduce social welfare. The model is also extended to study a voluntary herd depopulation scheme. Moral hazard in the biosecurity action will dampen the scheme's welfare effect. |
| Keywords: | biosecurity, continuous time, multiple equilibria, Nash behavior, reinfection. |
| JEL: | D20 H4 Q1 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp418&r=agr |
| By: | Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Dinghuan Hu; Cheng Fang |
| Abstract: | In China, with the cost of improved technology rising, surplus labor shrinking, and demand for food quality and safety increasing, it will be just a matter of time before the country's hog production sector will be commercialized like that of developed countries. However, even if China's cost of production converges to international levels, as shown in this case study, China may continue to retain some competitive advantage because of the labor-intensive nature of the marketing services involved in hog processing and meat distribution. The supply of variety meats offers the most promising market opportunity for foreign suppliers in China. The market may open further if the tariff rate for variety meats is reduced from 20% and harmonized with the pork muscle meat rate of 12%, and if the value-added tax of 13% is applied equally to both imported and domestic products. The fast-growing Western-style family restaurant and higher-end dining sector is another market opportunity for high-quality imported pork. |
| Keywords: | commercial, cost structure, imports, pork value chain. |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-mrp11&r=agr |
| By: | Anh Tu; John C. Beghin (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Estelle Gozlan |
| Abstract: | We investigate the interface between trade and invasive species (IS) risk, focusing on the existing tariff escalation in agro-forestry product markets and its implication for IS risk. Tariff escalation in processed agro-forestry products exacerbates the risk of IS by biasing trade flows toward increased trade of primary commodity flows and against processed-product trade. We show that reducing tariff escalation by lowering the tariff on processed goods increases allocative efficiency and reduces the IS externality, a win-win situation. We also identify policy menus for trade reforms involving tariffs on both raw input and processed goods, leading to win-win situations. |
| Keywords: | agro-forestry products, exotic pest, international trade, invasive species, tariff escalation, trade flows. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp407&r=agr |
| By: | Christine Boizot-Szantai; Sebastien Lecocq; Stephan Marette (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | In this article, the impact of common labels is investigated with both theoretical and empirical approaches. Recent statistics regarding the egg market in France suggest that retailer brands largely adopt common labels. A simple theoretical framework enables us to determine the conditions under which producers and/or retailers with different product qualities decide to post a common label on their products. In particular, a situation of multiple equilibria (one where the label is used by the high-quality seller only and one where it is used by the low-quality seller only) is exhibited when the cost of the label is relatively large. The demand is then estimated for different segments of the French egg market, including producer/retailer brands with/without common labels. The estimates are used to derive expenditure and price elasticities and allow us to calculate welfare measures revealing a relatively large willingness-to-pay for labels. |
| Keywords: | competition, demand estimation, labels, product differentiation. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp405&r=agr |
| By: | Miguel Carriquiry; Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)) |
| Abstract: | Based on accepted advances in the marketing, economics, consumer behavior, and satisfaction literatures, we develop a micro-foundations model of a firm that needs to manage the quality of a product that is inherently heterogeneous in the presence of varying customer tastes or expectations for quality. Our model blends elements of the returns to quality, customer lifetime value, and service profit chain approaches to marketing. The model is then used to explain several empirical results pertaining to the marketing literature by explicitly articulating the trade-offs between customer satisfaction and costs (including opportunity costs) of quality. In this environment firms will find it optimal to allow some customers to go unsatisfied. We show that the relationship between the expected number of repeated purchases by an individual customer is endogenous to the choice of quality by the firm, indicating that the number of purchases cannot be chosen freely to estimate a customer's lifetime value. |
| Keywords: | consumer satisfaction, heterogeneous customers, quality expectations, quality heterogeneity, quality management, repeated purchases. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp410&r=agr |
| By: | Chad E. Hart (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | Federal and state governments are searching for programs and/or policies to deal with the risks linked with uncertainty in water supplies and demands. Within the United States, competition among agricultural, urban, and environmental concerns for water is increasing. Drought conditions and water use restrictions have, at times, limited water supplies for these varied uses. The federal government stands in a unique position as both a major supplier and demander of water. As such, the federal government has put forward several programs for water conservation, information, and usage. One area in which the federal government has not made significant progress is the issue of risk management and compensation for water reallocations. When natural forces or government policies trigger water use restrictions, the restricted water users may or may not be compensated by current programs. This paper explores how current policies may or may not cover agricultural losses due to water use restrictions and outlines several government policy proposals and market-based methods to mitigate the risks from water restrictions. Given the diversity of the agents involved and the watersheds covered, it is likely that no one program will be the "best" program to address the issue. The "best" program for a given combination of agents in a watershed will depend upon the types of agents and the possible uses of the water. |
| Keywords: | government policy, reallocation, risk management, water rights. |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ias:fpaper:05-bp46&r=agr |
| By: | Hongli Feng (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | Carbon sequestration is a temporal process in which carbon is continuously being stored/released over time. Different methods of carbon accounting can be used to account for this temporal nature, including annual average carbon, annualized carbon, and ton-year carbon. In this paper, starting by exposing the underlying connections among these methods, we examine how the comparisons of sequestration projects are affected by these methods and the major factors affecting them. We explore the empirical implications for carbon sequestration policies by applying these accounting methods to the Upper Mississippi River Basin, a large and important agriculture area in the United States. We find that the differences are significant in terms of the location of land that might be chosen and the distribution of carbon sequestration over the area, although the total amount of carbon sequestered does not differ considerably across programs that use different accounting methods or different values of the major factors. |
| Keywords: | annual average carbon, annualized carbon, carbon sequestration, ton-year carbon. |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp386&r=agr |
| By: | Sergio H. Lence |
| Abstract: | This study provides a comparative economic analysis of the primary production of pork and its marketing channel in Spain and the United States. The focus on Spain is due to the profound growth and transformation of its pork sector over the last 20 years, compared with other major players in the world market for pig meat. The analysis reveals a number of similar characteristics but also important differences between the two countries. The significant expansion of Spain's pork production sector stemmed from a number of factors that apply, to a relatively large extent, to some U.S. states (in particular, North Carolina) but do not apply to the U.S. pork production sector as a whole. This implies that it is unlikely that the U.S. pork production sector as a whole will mimic an expansion driven by the same type of factors in the future. Likewise, it seems highly unlikely that the U.S. consumption of pig meat will expand in the future based on the same driving forces behind the sharp increase in Spain's domestic demand for pig meat over the last 20 years. The analysis also indicates that Spanish pig producers are currently being subjected to more stringent environmental and animal welfare regulations than their U.S. counterparts and that these regulations are becoming increasingly more restrictive. It would not be surprising to see similar trends emerging in the United States, leading to a substantially more restrictive regulatory environment for U.S. hog producers. |
| Keywords: | comparative analysis, hog marketing channel, Spain pork industry, U.S. pork industry. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-mrp12&r=agr |
| By: | Yong-Hwan Noh; GianCarlo Moschini (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | We analyze the entry of a new product into a vertically differentiated market in which an entrant and an incumbent compete in prices. Here the entry-deterrence strategies of the incumbent firm rely on "limit qualities." With a sequential choice of quality, a quality-dependent marginal production cost, and a fixed entry cost, we relate the entry-quality decision and the entry-deterrence strategies to the level of entry cost and the degree of consumer heterogeneity. Quality-dependent marginal production costs in the model entail the possibility of inferior-quality entry as well as an incumbent's aggressive entry-deterrence strategies of increasing its quality level toward potential entry. Welfare evaluation confirms that social welfare is not necessarily improved when entry is encouraged rather than deterred. |
| Keywords: | entry deterrence; quality choice; vertical product differentiation. |
| JEL: | C72 D43 L13 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp403&r=agr |
| By: | Huffman, Wallace |
| Abstract: | This paper presents an economic perspective on intellectual property in plant materials, including its value, and summary information on the U.S. seed industry. It first considers intellectual property rights--types, economic incentives that they bestow, and uses across developed and developing countries. Second, it considers the U.S. seed industry--characteristics for major crops, optimal pricing of a superior variety, and relative size of public and private research expenditures. Some conclusions and implications are presented in the final section. |
| Keywords: | Intellectual property rights, value of innovations, plants, seed industry. |
| Date: | 2006–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12583&r=agr |
| By: | Carlo Carraro (Department of Economics, University Of Venice Cà Foscari); Carmen Marchiori (London School of Economics and Fondazione Eni Enrico Mattei); Alessandra Sgobbi (SSAV and Fondazione Eni Enrico Mattei) |
| Abstract: | The purpose of the paper is to review the applications of non-cooperative bargaining theory to water related issues – which fall in the category of formal models of negotiation. The ultimate aim is that of, on the one hand, identify the conditions under which agreements are likely to emerge, and their characteristics; and, on the other hand, to support policy makers in devising the “rules of the game” that could help obtain a desired result. Despite the fact that allocation of natural resources, especially of trans-boundary nature, has all the characteristics of a negotiation problem, there are not many applications of formal negotiation theory to the issue. Therefore, this paper first discusses the noncooperative bargaining models applied to water allocation problems found in the literature. Particular attention will be given to those directly modelling the process of negotiation, although some attempts at finding strategies to maintain the efficient allocation solution will also be illustrated. In addition, this paper will focus on Negotiation Support Systems (NSS), developed to support the process of negotiation. This field of research is still relatively new, however, and NSS have not yet found much use in real life negotiation. The paper will conclude by highlighting the key remaining gaps in the literature. |
| Keywords: | Negotiation theory, Bragaining, Coalitions, Fairness, Agreements |
| JEL: | C72 C78 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:09_06&r=agr |
| By: | GianCarlo Moschini (Center for Agricultural and Rural Development (CARD)); Harvey E. Lapan |
| Abstract: | We review some of the most significant issues and results on the economic effects of genetically modified (GM) product innovation, with emphasis on the question of GM labeling and the need for costly segregation and identity preservation activities. The analysis is organized around an explicit model that can accommodate the features of both first-generation and second-generation GM products. The model accounts for the proprietary nature of GM innovations and for the critical role of consumer preferences vis-Ã -vis GM products, as well as for the impacts of segregation and identity preservation and the effects of a mandatory GM labeling regulation. We also investigate briefly a novel question in this setting, the choice of "research direction" when both cost-reducing and quality-enhancing GM innovations are feasible. |
| Keywords: | identity preservation, labeling, market failure, product differentiation, welfare. |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp391&r=agr |
| By: | Marette, Stéphan; Roosen, Jutta; Blanchemanche, Sandrine; Verger, Philippe |
| Abstract: | An experiment was conducted in France to evaluate the impact of health information on consumers’ choice between two different types of fish. Successive messages revealing risks (methylmercury) and benefits (omega-3s) of consuming the fish, along with consumption recommendations, were delivered. Results show a significant difference of reaction according to the order and type of information. The information about risks had a larger marginal impact on change in willingness to pay (WTP) than did the information about benefits. While the results show that detailed messages on risks/benefits, including recommendations for nutrition behavior, matter in the modification of WTP, 40% of respondents did not change their initial choices after the revelation of health information. |
| Keywords: | experimental economics, fish consumption, health information, nutrition. |
| Date: | 2006–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12574&r=agr |
| By: | Tipparat Pongthanapanich (Department of Environmental and Business Economics, University of Southern Denmark) |
| Abstract: | This paper identifies the optimal options of Krabi’s coastal land use to facilitate the final planning decision. Through compromise programming approach, the optimization models with respect to the weights assigned to two objectives of maximizing the net private and environmental benefits are formulated to derive the options. Various externality management scenarios based on different applications of policy tools are assessed. All scenarios suggest the optimal options in favour of mangrove conservation when both objectives are considered equally important. This is not the case when the private benefit objective is assigned a higher weight at a certain level for each scenario, which results in the pro development of shrimp farming. The policy framework based on a combination of carrying capacity and green taxation regime would ensure that even if the pro development option were chosen, the positive net environmental gain and the integrity of coastal receiving waters would be obtained. |
| Keywords: | coastal land management, weighted compromise programming, decision making, Krabi province |
| JEL: | C61 D62 D74 Q22 Q24 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:sdk:wpaper:67&r=agr |
| By: | Fabiosa, Jacinto F. |
| Abstract: | With sustained income growth and fast urbanization, Indonesia will see a major shift in the growth of grain consumption from rice to wheat products. New demand estimates from consumption survey data give a relatively high income elasticity of demand for wheat-based products, in the range of 0.44 to 0.84, with 26% to 34% of this response coming from the impact of income on the probability of consumption for non-consuming households and the remaining impact coming from the response on the level of consumption for households currently consuming wheat products. Urban location of households also contributes an increase of 0.11% to 0.13% to consumption. In contrast, elasticities in rice show a negative impact of income and urbanization on the probability of consumption and a positive but small impact on the unconditional mean. A partial liberalization scenario shows the domestic wheat flour price declining by 13.66%, inducing consumption to increase by 7.06%, which translates into 7.04% growth in imports. This exerts an upward pressure on the world price, increasing it by 0.23%. A faster income growth scenario shows higher consumption (2.60%), imports (2.59%), and prices (0.09%). Countries with a proximity advantage such as Australia, China, and India will benefit from the growth in this market. But, with dependable supply, product quality assurance, and credit availability, North American suppliers may still remain in this market. |
| Keywords: | double-hurdle demand, trade, Westernization of diet. |
| Date: | 2006–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12587&r=agr |
| By: | David A. Hennessy (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | Stylized facts regarding the industrial process include emphases on obtaining information about and control over the quality of raw materials. We provide a model that establishes conditions under which informed control involves ensuring uniformity in inputs and increased uniformity encourages more extensive processing. We show when the Boltzmann-Shannon entropy statistic is an appropriate measure of uniformity. |
| Keywords: | entropy, homogeneous inputs, industrialization, information technologies, sorting. |
| JEL: | D2 L1 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp398&r=agr |
| By: | Stephan Marette (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | An investigation of financing an inspection policy while allowing the enforcement of a market regulation is described. A simple model shows that the intensity of controls depends on the market structure. Under a given number of firms, the per-firm probability of controls is lower than one, since firms' incentive to comply with regulation holds under positive profits. In this case, a lump-sum tax is used for limiting distortions coming from financing with a fixed fee. Under free entry, the per-firm probability of controls is equal to one, and only a fixed fee that prevents excess entry is used to finance inspection. |
| Keywords: | inspection policies, market regulation, regulatory funding. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-wp412&r=agr |
| By: | Sanjeev Agarwal; Michael J. Barone |
| Abstract: | Branding strategies centering on the geographical origins of a product can provide a basis for differentiating commodity products. The use of such "geographical indications" (or GIs) can involve unique quality characteristics associated with a particular location or quality images that are based on the history, tradition, and folklore in a region. In this paper we describe the benefits and pitfalls (such as the threat of new entrants, oversupply, the broadening of boundaries to include more producers, and limiting generic use of such names) of using GI branding strategies. We also focus on trademark issues germane to a company's ability to (1) adopt GI-based trademarks as a means of gaining a competitive advantage and (2) protect the rights associated with such marks in order to sustain this source of competitive advantage. |
| Keywords: | brand, branding, commodity marketing, generic brand, geographic identity. |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-mrp9&r=agr |
| By: | John M. Crespi; Stephan Marette (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | This paper empirically explores the link between quality and concentration in a cross-section of manufactured goods. Using concentration data and product quality indicators, an ordered probit estimation explores the impact of concentration on quality that is defined as an index of quality characteristics. The results demonstrate that market concentration and quality are positively correlated across different industries. When industry concentration increases, the likelihood of the product being higher quality increases and the likelihood of observing a lower quality decreases. |
| Keywords: | concentration, market structure, ordered probit, product differentiation, product quality. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:06-wp420&r=agr |
| By: | Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)) |
| Abstract: | In the decade of the 1990s, China's feed sector became increasingly privatized, more feed mills opened, and the scale of operation expanded. Capacity utilization remained low and multi-ministerial supervision was still prevalent, but the feed mill sector showed a positive performance overall, posting a growth rate of 11 percent per year. Profit margin over sales was within allowable rates set by the government of China at 3 to 5 percent. Financial efficiency improved, with a 20 percent quicker turnover of working capital. Average technical efficiency was 0.805, as more efficient feed mills increasingly gained production shares. This study finds evidence that the increasing privatization explains the improved performance of the commercial feed mill sector. The drivers that shaped the feed mill sector in the 1990s have changed with China's accession to the World Trade Organization. With the new policy regime in place, the study foresees that, assuming an adequate supply of soy meal and an excess capacity in the feed mill sector, it is likely that China will allow corn imports up to the tariff rate quota (TRQ) of 7.2 mmt since the in-quota rate is very low at 1 percent. However, when the TRQ is exceeded, the import duty jumps to a prohibitive out-quota rate of 65 percent. With an import duty for meat of only 10 to 12 percent, China would have a strong incentive to import meat products directly rather than bringing in expensive corn to produce meat domestically. This would be further reinforced if structural transformation in the swine sector would narrow the cost differential between domestic and imported pork. |
| Keywords: | China, feed mill sector, privatization, trade. |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:05-mrp10&r=agr |
| By: | Raghbendra Jha; Raghav Gaiha; Anurag Sharma |
| Abstract: | This paper tests for the existence of a Poverty Nutrition Trap (PNT) in the case of the nutrient most likely to have productivity impacts, i.e., calories, for three categories of wages – sowing, harvesting, and other – and for male and female workers separately. We use household level national data for rural India for the period January to June 1994. We use robust sample selection procedures due to Tobit methods and due to Heckman to arrive at consistent estimates. It is discovered that the PNT exists for women workers engaged in harvesting and sowing in the case of the Heckman methodology. In the case of the Tobit analysis a PNT exists in the case of female harvest, male other, and female other categories of wages. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pas:asarcc:2006-02&r=agr |
| By: | Jerry Hausman (Institute for Fiscal Studies and Massachussets Institute of Technology); Ephraim Leibtag |
| Abstract: | Consumers often benefit from increased competition in differentiated product settings. In previous research Hausman (1997a, 1997b, 1999, 2002) has estimated the increased consumer welfare from the introduction of new brand, e.g. Apple Cinnamon Cheerios, and new products, e.g. mobile telephones. In this paper we consider consumer benefits from increased competition in a differentiated product setting: the spread of nontraditional retail outlets. Non-traditional outlets, including supercenters, warehouse club stores, and mass merchandisers have grown in popularity and nearly doubled their share of consumer food-at-home expenditures from 1998 to 20033. Within this non-traditional retail group, supercenters have experienced the largest increase over this time period, but warehouse club stores and dollar stores have also experienced significant increases in their share of the consumer food dollar as U.S. consumers attempt to find the best combination of prices and services at their retailer of choice. |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:06/06&r=agr |