nep-agr New Economics Papers
on Agricultural Economics
Issue of 2006‒04‒29
fifteen papers chosen by
Angelo Zago
Universita degli Studi di Verona

  1. Do global trade distortions still harm developing country farmers ? By Valenzuela, Ernesto; Anderson, Kym
  2. The relative importance of global agricultural subsidies and market access By Valenzuela, Ernesto; Martin, Will; Anderson, Kym
  3. Causes of Efficiency Change in Transition: Theory and Cross-Country Survey Evidence from Agriculture By Johan Swinnen; Liesbet Vranken
  4. FAPRI 2006 U.S. and World Agricultural Outlook By Beghin, John C.; Dong, Fengxia; Elobeid, Amani; Fabiosa, Jacinto F.; Fuller, Frank H.; Hart, Chad E.; Kovarik, Karen P.; Tokgoz, Simla; Yu, Tun-Hsiang (Edward); Wailes, Eric; Chavez, Ed; Womack, Abner W.; Meyers, William H.; Binfield, Julian; Brown, D. Scott; Kruse, John; Madison, Daniel; Meyer, Seth; Westhoff, Patrick; Wilcox, Lori
  5. Using Discrete Choice Experiments to Derive Individual-Specific WTP Estimates for Landscape Improvements under Agri-Environmental Schemes: Evidence from the Rural Environment Protection Scheme in Ireland By Danny Campbell; W. George Hutchinson; Riccardo Scarpa
  6. Lobbying and Agricultural Trade Policy in the United States By Gawande, Kishore; Hoekman, Bernard
  7. Bioprospecting, market and the conservation of biodiversity: a theoretical framework By Luca Di Corato
  8. Political institutions, inequality, and agricultural growth : the public expenditure connection By Lopez, Ramon; Lederman, Daniel; Allcott, Hunt
  9. Addressing China ' s growing water shortages and associated social and environmental consequences By Shalizi, Zmarak
  10. Household Access to Microcredit and Child Work in Rural Malawi By Sudipta Sarangi; Gautam Hararika
  11. Environment, Human Development and Economic Growth By Valeria Costantini; Salvatore Monni
  12. Can Conditional Cash Transfers Serve as Safety Nets to Keep Children at School and Out of the Labor Market? By Alain de Janvry; Frederico Finan; Elisabeth Sadoulet
  13. Rural Poverty in Transition Countries By Karen Macours; Johan Swinnen
  14. Trade liberalization and the environment in Vietnam By Jha, Shreyasi; Mani, Muthukumara
  15. Effects of Great Barrier Reef Degradation on Recreational Demand: A Contingent Behaviour Approach By Peter C. Roebeling; M.E. Kragt; A. Ruijs

  1. By: Valenzuela, Ernesto; Anderson, Kym
    Abstract: The authors estimate the impact of global m erchandise trade distortions and services regulations on agricultural value added in various countries. Using the latest versions of the Global Trade Analysis Project (GTAP) database and the GTAP-AGR model of the global economy, their results suggest real net farm incomes would rise in developing countries with a move to free trade, thereby alleviating rural poverty. This occurs despite a terms of trade deterioration for developing countries that are net food importers or that enjoy preferential access to agricultural markets of high-income countries. The authors also show, for several large developing countries, the contribution of their own versus other countries ' trade policies.
    Keywords: Agribusiness,Economic Theory & Research,Free Trade,Rural Development Knowledge & Information Systems,Trade Law
    Date: 2006–04–01
  2. By: Valenzuela, Ernesto; Martin, Will; Anderson, Kym
    Abstract: The claim by global trade modelers that the potential contribution to global economic welfare of removing agricultural subsidies is less than one-tenth of that from removing agricultural tariffs puzzles many observers. To help explain that result, the authors first compare the OECD and model-based estimates of the extent of the producer distortions (leaving aside consumer distortions), and show that 75 percent of total support is provided by market access barriers when account is taken of all forms of support to farmers and to agricultural processors globally, and only 19 percent to domestic farm subsidies. Then the authors provide a back-of-the-envelope (BOTE) calculation of the welfare cost of those distortions. Assuming unitary supply and demand elasticities, that BOTE analysis suggests 86 percent of the welfare cost is due to tariffs and only 6 percent to domestic farm subsidies. When the higher costs associated with the greater variability of trade measures relative to domestic support are accounted for, the BOTE estimate of the latter ' s share falls to 4 percent. This is close to the 5 percent generated by the most commonly used global model (GTAP) and reported in the paper ' s final section.
    Keywords: Economic Theory & Research,Markets and Market Access,Free Trade,Trade Law,Tax Law
    Date: 2006–04–01
  3. By: Johan Swinnen; Liesbet Vranken
    Keywords: transition agriculture, production efficiency, reforms
    Date: 2006
  4. By: Beghin, John C.; Dong, Fengxia; Elobeid, Amani; Fabiosa, Jacinto F.; Fuller, Frank H.; Hart, Chad E.; Kovarik, Karen P.; Tokgoz, Simla; Yu, Tun-Hsiang (Edward); Wailes, Eric; Chavez, Ed; Womack, Abner W.; Meyers, William H.; Binfield, Julian; Brown, D. Scott; Kruse, John; Madison, Daniel; Meyer, Seth; Westhoff, Patrick; Wilcox, Lori
    Abstract: The FAPRI 2006 U.S. and World Agricultural Outlook presents projections of world agricultural production, consumption, and trade under average weather patterns, existing farm policy, and policy commitments under current trade agreements and custom unions. Despite continued high energy prices, world economic growth is expected to remain strong in the coming decade, above 3% per annum. Other major drivers of the 2006 baseline include new bio-energy policies in several large countries, EU sugar policy reform, sanitary and phytosanitary (SPS) shocks in livestock and poultry markets, and movements in the exchange rate.
    Date: 2006–04–25
  5. By: Danny Campbell (Queen’s University Belfast); W. George Hutchinson (Queen’s University Belfast); Riccardo Scarpa (University of Waikato and University of York)
    Abstract: Reported in this paper are the findings from two discrete choice experiments that were carried out to address the value of a number of farm landscape improvement measures within the Rural Environment Protection (REP) Scheme in Ireland. Image manipulation software is used to prepare photorealistic simulations representing the landscape attributes across three levels to accurately represent what is achievable within the Scheme. Using a mixed logit specification willingness to pay (WTP) distributions based on the parameter estimates obtained from the individual conditional distributions are derived. These estimates are subsequently adjusted and combined to account for baselines and levels of improvement resulting from the implementation of the REP Scheme. Individual-specific WTP estimates are thus obtained for the contribution of the Scheme to rural landscapes and are subsequently contrasted with the average cost of the Scheme across the Irish adult population. Results indicate that the Scheme contributes substantial benefits to rural landscapes.
    Keywords: Agri-environment, Discrete choice experiments, Individual-specific WTP, Mixed logit
    JEL: Q51 Q24
    Date: 2006–02
  6. By: Gawande, Kishore; Hoekman, Bernard
    Abstract: This paper studies whether political campaign contributions influence agricultural protection in the United States in the manner suggested by the political economy model of Grossman and Helpman (1994), using a detailed cross-sectional data set of agricultural protection, subsidies, and contributions to Political Action Committees in the late 1990s. The data do not reject the qualitative predictions of the model: that policymakers will consider both the wishes of specific lobbies and the interests of society as a whole in their decisions. However, the estimated weight of lobbying contributions in decision-making (actual policy) is found to be very low. This is a puzzle as it seems to suggest irrational behavior on the part of the lobbies that make political contributions. It is also inconsistent with the large estimates of deadweight losses from distortionary policy in agriculture. We show that the puzzle can be resolved by extending the model to allow uncertainty about the ability of politicians to deliver policy combined with the fact that contributions are made before policy is decided. The results of the analysis illustrate that the underpinnings of the prevailing political economy equilibrium that supports restrictive agricultural trade policies will be difficult to dislodge in the absence of mobilizing strong counter-lobbying to induce a more liberal policy stance. This of course is one rationale for international trade negotiations - but it requires that other groups in society see enough of an incentive to engage in the political process, pointing to the importance of the design of the negotiating agenda.
    Keywords: agriculture; lobbying; political economy of protection
    JEL: F13
    Date: 2006–04
  7. By: Luca Di Corato (University of Padua and University of York)
    Abstract: Since biological resources may be a valuable input for agricultural and pharmaceutical R&D, extracting rents from bioprospection can generate income for funding the conservation of biodiversity hotspots. However, can a market for biological resources effectively create a sufficient incentive for private conservation? In this paper, a market framework is developed in order to derive some possible market equilibria. I discuss the different impact that each equilibrium has on the extent of conservation and I show how industry structure on the supply side of the market can affect the private incentive to conserve. These findings will finally suggest some useful policy implications.
    JEL: Q57 L11
    Date: 2006–04
  8. By: Lopez, Ramon; Lederman, Daniel; Allcott, Hunt
    Abstract: This paper brings together the literatures on the political economy of public expenditures and the determinants of economic growth. Based on a new dataset of rural public expenditures in a panel of Latin American economies, the econometric evidence suggests that non-social subsidies reduce agricultural GDP. Furthermore, the evidence suggests that political and institutional factors as well as income inequality are determinants of the size and structure of rural public expenditures, through which they have large and significant effects on agricultural GDP.
    Keywords: Public Sector Expenditure Analysis & Management,Economic Theory & Research,Public Sector Economics & Finance,Political Economy,Pro-Poor Growth and Inequality
    Date: 2006–04–01
  9. By: Shalizi, Zmarak
    Abstract: China has experienced a wide-scale and rapid transformation from an agricultural based economy to the manufacturing workshop of the world. The associated relocatio n of the population from relatively low density rural areas to very high density urban areas is having a significant impact on the quantity and quality of water available as inputs into the production and consumption process, as well as the ability of the water system to absorb and neutralize the waste byproducts deposited into it. Water shortages are most severe in the north of the country, where surface water diversion is excessive and groundwater is being depleted. In addition, the quality of water is deteriorating because of pollution, thereby aggravating existing water shortages. The biggest challenge ahead will be for national and local governments to craft policies and rules within China ' s complex cultural and legal administrative system that provide incentives for users to increase efficiency of water use, and for polluters to clean up the water they use and return clean water to stream flows. Using a standard public economics framework, water requirements for public goods-such as ecosystem needs-should be set aside first, before allocating property rights in water (to enable water markets to function and generate efficient allocation signals). Even then, water markets will have to be regulated to ensure public goods, such as public health, are not compromised. Until water markets are implemented, staying the course on increasing water and wastewater prices administratively and encouraging water conservation are necessary to reduce the wasting of current scarce water resources, as well as the new water supplies to be provided in the future.
    Keywords: Water Supply and Sanitation Governance and Institutions,Town Water Supply and Sanitation,Water and Industry,Water Conservation,Water Use
    Date: 2006–04–01
  10. By: Sudipta Sarangi; Gautam Hararika
    Abstract: This paper examines the effect of household access to microcredit upon work by seven to eleven year old children in rural Malawi. Given that microcredit organizations foster household enterprises wherein much child labor is engaged, this paper aims to discover whether access to microcredit might increase work by children. It is found that, in the peak harvest season, household access to microcredit, measured in a novel manner as self-assessed credit limits at microcredit organizations, raises the probability of child work in households with sample means of owned land and number of retail sales enterprises. It appears this is due to children having to take up more domestic chores as adults are busied in household enterprises following improved access to microcredit.
  11. By: Valeria Costantini (Roma Tre University); Salvatore Monni (Roma Tre University)
    Abstract: Over the last few years, environmental issues have entered into policy design, particularly development and growth policies. Natural resources are considered necessary production inputs and environmental quality is considered a welfare determinant. The integration of environmental issues into economic growth and development theories and empirics is currently widely analyzed in the literature. The effects of natural resources endowment on economic growth are mainly analyzed through the so-called Resource Curse Hypothesis (RCH) whereas the effects of economic growth on environmental quality are part of the Environmental Kuznets Curve (EKC). Furthermore, recent contributions on RCH and EKC have shown the important role of institutions and human development dimensions in building a sustainable development path. In this paper, we attempt to analyze the causal relationships between economic growth, human development and sustainability combining the RCH and EKC models and adopting a human development pers ective.
    Keywords: Natural Resources, Sustainability, Human Development, Trade
    JEL: O15 Q01 Q56
    Date: 2006–02
  12. By: Alain de Janvry (University of California, Berkeley); Frederico Finan (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley)
    Abstract: Conditional cash transfer (CCT) programs for education are known to be effective in increasing educational achievements among the rural poor. Using panel data from the Progresa experience with randomized treatment, we show that there is strong state dependence in school attendance. Short term shocks that take children out of school will consequently have long term consequences on their educational achievements. We show that idiosyncratic and covariate shocks do indeed push parents to take children out of school and to use child labor as risk coping instruments. However, CCT help protect children from these shocks, creating an additional benefit from these programs as effective safety nets with long term benefits.
    Keywords: child labor, education, government aid, rural poverty,
    Date: 2004–11–01
  13. By: Karen Macours; Johan Swinnen
    Abstract: This paper uses new poverty data based on household level surveys to analyze changes in rural poverty and rural-urban poverty differences in 23 transition countries of Central and Eastern Europe and the Former Soviet Union. The paper presents a series of hypotheses to explain differences across countries and changes over time.
    Keywords: rural poverty, transition, Eastern Europe, Former Soviet Union
    Date: 2006
  14. By: Jha, Shreyasi; Mani, Muthukumara
    Abstract: Vietnam ' s integration with the international economy has increased significantly over the past decade, aided by substantial liberalization of trade, and appears set to increase further as trade-expanding measures take full effect. This dramatic shift in Vietnam ' s trading patterns has important implications for the environment and use of natural resources. This paper offers a systematic analysis of the trading and investment patterns to give a broader understanding of the environmental implications of greater openness of the economy during the past decade. The results suggest increasing manufacturing and export activity in water and toxic pollution-intensive sectors compared with the less pollution-intensive sectors. The story is, on the surface, consistent with the changing composition of Vietnamese production and exports away from traditional sectors and toward pollution-intensive manufacturing (especially leather and textiles). The paper also highlights the need to consider strengthening environmental policies while further trade liberalization is being contemplated through Vietnam ' s joining of the World Trade Organization.
    Keywords: Environmental Economics & Policies,Water a nd Industry,Economic Theory & Research,Free Trade,Green Issues
    Date: 2006–04–01
  15. By: Peter C. Roebeling (CSIRO Sustainable Ecosystems); M.E. Kragt (University and Research Centre); A. Ruijs (University and Research Centre)
    Abstract: Degradation of coral reefs may affect the number of tourists visiting the reef and, consequently, the economic sectors that rely on healthy reefs for their income generation. A Contingent Behaviour approach is used to estimate the effect of reef degradation on demand for recreational dive and snorkel trips, for a case study of the Great Barrier Reef (GBR) in Australia. We assessed how reef degradation affects GBR tourism and to what extent reef-trip demand depends on the visitors’ socio-economic characteristics. A count data model is developed, and results indicate that an average visitor would undertake about 60% less reef trips per year given a combined 80%, 30% and 70% decrease in coral cover, coral diversity and fish diversity, respectively. This corresponds to a decrease in tourism expenditure for reef trips to the Great Barrier Reef Marine Park of about A$ 136 million per year.
    Keywords: Coral Reef, Recreation, Contingent Behaviour Model, Count Data Models
    JEL: Q25 Q26 Q51
    Date: 2006–03

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