nep-agr New Economics Papers
on Agricultural Economics
Issue of 2006‒05‒13
twelve papers chosen by
Angelo Zago
Universita degli Studi di Verona

  1. The World Trade Organization ' s Doha cotton initiative : a tale of two issues By Valenzuela, Ernesto; Anderson, Kym
  2. Farm Technology and Technical Efficiency: Evidence from Four Regions in China By Chen, Zhuo; Huffman, Wallace; Rozelle, Scott
  3. Agricultural water markets: exploring limits and opportunities in Italy and Spain By Joan Pujol; Meri Raggi; Davide Viaggi
  4. The role of opinion leaders in the diffusion of new knowledge : the case of integrated pest management By Savastano, Sara; Feder, Gershon
  5. Production costs of pears and apples in Xinjiang (China) By Sergio Marchesini; Huliyeti Hasimu; Maurizio Canavari
  6. Recent and prospective adoption of genetically modified cotton : a global computable general equilibrium analysis of economic impacts By Jackson, Lee Ann; Valenzuela, Ernesto; Anderson, Kym
  7. Consumers’ Demand for Pork Quality: Applying Semantic Network Analysis By Grebitus, Carola; Bruhn, Maike
  8. Power and the Analysis of the Food System By Valeria Sodano
  9. The Economics of Obesity-Related Mortality Among High Income Countries By Huffman, Wallace; Huffman, Sonya K.; Tegene, Abebayehu; Rickertsen, Kyrre
  10. Micronutrient Deprivation and Poverty Nutrition Trap in Rural India By Raghbendra Jha; Raghav Gaiha; Anurag Sharma
  11. India's Firewood Crisis Re-examined By van 't Veld, Klaas; Narain, Urvashi; Gupta, Shreekant; Chopra, Neetu; Singh, Supriya
  12. Demand for Environmental Quality: An Empirical Analysis of Consumer Behavior in Sweden By Ghalwash, Tarek

  1. By: Valenzuela, Ernesto; Anderson, Kym
    Abstract: Four West African nations have demanded that the World Trade Organization ' s Doha Development Agenda include a Cotton Initiative that involves two issues: cutting cotton subsidies and tariffs, and assisting farm productivity growth in Africa. The authors provide estimates of the potential economic impacts of (1) complete or partial removal of cotton subsidies and import tariffs globally, and (2) cotton productivity growth through the adoption of genetically modified (GM) cotton varieties. They use the latest version of the GTAP database and model. Their results confirm that-unlike for other agricultural subsidies and tariffs-for cotton it is subsidy reductions rather than tariff cuts that would make by far the largest impact. For Sub-Saharan Africa the potential gains are huge relative to the effects on that region of reforming other merchandise trade policies. And they could be more than doubled if that reform provided the cash for farmers to take advantage of the biotechnology revolution and adopt GM cotton varieties. But those potential gains, and the affordability of switching to costly GM seed, depend crucially on the extent to which high-income countries are willing to lower domestic support to their cotton farmers.
    Keywords: Economic Theory & Research,Crops & Crop Management Systems,Tax Law,Textiles, Apparel & Leather Industry,Wholesale & Retail Trade Industry
    Date: 2006–05–01
  2. By: Chen, Zhuo; Huffman, Wallace; Rozelle, Scott
    Abstract: In this paper we fit stochastic frontier production functions to data for Chinese farms grouped into each of four regions—North, Northeast, East, and Southwest—over 1995-1999. These frontier production functions are shown to have statistically different structures, and the marginal product information shows overuse of chemical inputs in the East and capital services in the North. Labor also has a low marginal product. Next, we use the data and the production parameters to create technical efficiency scores for each of the farms and then standardize them. Standardized technical efficiency is shown to have the same structure across regions and to be related to the age of the farmer, land fragmentation, and the village migration rate, controlling for year dummies and village or regional fixed effects.
    Keywords: Household farm; Labor migration; Land fragmentation; Stochastic production frontier; Technical efficiency
    JEL: C2 L2 O1 P2
    Date: 2006–05–01
  3. By: Joan Pujol (University of Girona); Meri Raggi (Department of Agricultural Economics and Engineering, Alma Mater Studiorum - University of Bologna); Davide Viaggi (Department of Agricultural Economics and Engineering, Alma Mater Studiorum - University of Bologna)
    Abstract: Agriculture is the main water-using sector in Southern European Countries, such as Spain and Italy. Innovative institutional solutions for reducing water use or increasing its efficiency are pursued by recent legislation concerning water, in particular by the Water Framework Directive (WFD). Even if not explicitly considered by the directive, water markets may be seen as a kind of instrument responding to the guiding principles of the upcoming water regulation. The issue of water markets is very much debated in the water economics literature and particularly in the agricultural water literature. Water markets refer to a mechanism of water allocation based on the exchange of rights on water use. Water markets are proposed and supported by economic theory on the ground that they produce an efficient allocation of water resources. Criticisms to water markets may derive both on the ground of economic efficiency itself (for example due to higher transaction costs and expenditure for wider water transport systems) and on equity considerations (for example the concentration of water on the more efficient farms that would specialise in intensive production, while the others would retain less intensive crops). The objective of this paper is to test to what extent water markets may contribute to the improvement of the efficiency of water use. The analysis is based on a linear programming model applied at basin level, comparing the situation with and without market and including transaction costs proportional to the amount of water exchanged. The model simulates the behaviour of different farm types, derived from cluster analysis on a sample of farms in each area. The model is tested in two areas in Southern Italy and Spain. The paper confirms that water markets have the possibility to improve water use efficiency. However, the exchanges are very much affected by the amount of transaction costs, even for transaction costs relatively low. In the case of Lower Ter, gross margin increase due to markets may be as high as 30% which is rather a considerable amount. Instead, the highest increase in Foggia is only about 10%, a result that may be regarded as hardly relevant. In Foggia the benefits of the water market collapse only when transaction costs are between 0,1 and 0,2 EUR/m3 (that may be regarded as a fairly high amount). On the contrary, Lower Ter is more sensitive to transaction costs and 0,075 EUR/m3 are enough to cause the market to shut down whatever the water quota. When potential improvements occur, an additional issue arises, i.e. the institutional acceptance of market criteria for water allocation purposes. The general attitude in Europe still appears against such a solution. However, the changing economic context (agricultural markets, demographic trends) tend to decrease rigidities about water exchange, particularly among farmers.
    Keywords: Water, Irrigation, Agriculture, Water markets, Water policy, Mathematical programming
    JEL: Q18 Q25 Q28
    Date: 2005
  4. By: Savastano, Sara; Feder, Gershon
    Abstract: The paper reviews the literature on the characteristics and impact of opinion leaders on the diffusion of new knowledge, concluding that there is no clear evidence on whether opinion leaders are more effective if they are similar in socioeconomic attributes to the other farmers rather than superior to would be followers. A multivariate analysis of the changes in integrated pest management knowledge in Indonesia among follower farmers over the period 1991-98 indicates that opinion leaders who are superior to followers, but not excessively so, are more effective in transmitting knowledge. Excessive socioeconomic distance is shown to reduce the effectiveness of diffusion. The paper then derives operational implications of the empirical results.
    Keywords: Agricultural Knowledge & Information Systems,Rural Development Knowledge & Information Systems,Primary Education,ICT Policy and Strategies,Education For All
    Date: 2006–05–01
  5. By: Sergio Marchesini (Department of Agricultural Economics and Engineering, Alma Mater Studiorum - University of Bologna); Huliyeti Hasimu (Xinjiang Agricultural University); Maurizio Canavari (Department of Agricultural Economics and Engineering, Alma Mater Studiorum - University of Bologna)
    Abstract: China is the most important pear producing country in the world, and one of the most important as far as it concerns apples. Nevertheless, its international role is not so relevant: traded volume in relation to production is relatively small yet growing fast. Xinjiang is a large and mainly deserted region in northwest China that covers one-sixth of China's land. However, thanks to abundant water resources, good lighting conditions and altitude, this area represents an ideal setting for pomefruit production, and has in fact a very long tradition. Unfortunately, due to a disadvantaged location and a poor economy this province do not attract enough capitals, passing unnoticed despite of its valuable resources. Economic analysis are therefore necessary to assess to which extent this market turns out to be approachable. The aim of this paper is to describe in detail the situation of the fruit growing industry in Xinjiang, as far as it concerns two important pomefruit varieties: Xiang Li pear, a local and very appreciated variety, and Fuji apple. After locating the most vocated producing areas for both species and identifying the productive standards, we then proceed on counting up the production costs, using a well-established methodology adapted to the particular situation. The target of the analysis are small and mid-size farms, since they represent the vast majority of the orchards of the area. The costs aggregates are: base orchard management cost (BOMC), farm full cost (FFC) and total production cost (TPC). These aggregates group together costs related to similar productive factors. The picture of the situation outlined by this survey is that of a marginal area, where however fruit growing, compared to other agricultural activities, grants a good income. It also emerges that fruit growers in Xinjiang (and in China), are hardly coming out of a situation of general backwardness, striving to adapt to a larger business mainly through exportation to other provinces. Farms are however mainly familiar and small, and only a few big local enterprises seem to possess the right requirements to give local production the right impetus to reach successfully outside markets.
    Keywords: Xiang Li fragrant pear, Fuji apple, Production cost, China, Fruit growing
    JEL: Q11 Q13 Q17
    Date: 2005
  6. By: Jackson, Lee Ann; Valenzuela, Ernesto; Anderson, Kym
    Abstract: The authors provide estimates of the economic impact of initial adoption of genetically modified (GM) cotton and of its potential impacts beyond the few countries where it is currently common. They use the latest version of the Global Trade Analysis Project (GTAP) database and model. The results suggest that by following the lead of China and South Africa, adoption of GM cotton varieties by other developing countries-especially in Sub-Saharan Africa-could provide even larger proportionate gains to farmer and national welfare than in those first-adopting countries. Furthermore, the estimated gains are shown to exceed those from a successful campaign under the World Trade Organization ' s Doha Development Agenda to reduce and remove cotton subsidies and import tariffs globally.
    Keywords: Crops & Crop Management Systems,Environmental Economics & Policies,Economic Theory & Research,Textiles, Apparel & Leather Industry,Livestock & Animal Husbandry
    Date: 2006–05–01
  7. By: Grebitus, Carola; Bruhn, Maike
    Abstract: Consideration of consumers’ demand for food quality entails several aspects. Quality itself is a complex and dynamic concept, and constantly evolving technical progress may cause changes in consumers’ judgment of quality. To improve our understanding of the factors influencing the demand for quality, food quality must be defined and measured from the consumer’s perspective (Cardello, 1995). The present analysis addresses the issue of food quality, focusing on pork—the food that respondents were concerned about. To gain insight into consumers’ demand, we analyzed their perception and evaluation and focused on their cognitive structures concerning pork quality. In order to more fully account for consumers’ concerns about the origin of pork, in 2004 we conducted a consumer survey of private households. The qualitative approach of concept mapping was used to uncover the cognitive structures. Network analysis was applied to interpret the results. In order to make recommendations to enterprises, we needed to know what kind of demand emerges from the given food quality schema. By establishing the importance and relative positions of the attributes, we find that the country of origin and butcher may be the two factors that have the biggest influence on consumers’ decisions about the purchase of pork.
    Keywords: cognitive structures, concept mapping, food quality, network analysis, semantic networks, spreading activation network model.
    Date: 2006–05–04
  8. By: Valeria Sodano
    Abstract: This paper stresses that in order to understand the current restructuring processes in the food system it is necessary to take explicitly into account the role of power as a driving organizational force. Agricultural economics, drawing pervasively on the walrasian model, has mainly analysed power in the form of market and bargaining power. Stemming from different definitions of power, the paper focuses on some definitions suggested by the new institutional economics and the network theory, showing their relevance to the analysis of the food market
    Keywords: power, scale-free networks, new institutional economics
    JEL: B52 L66 Z13
    Date: 2006–04
  9. By: Huffman, Wallace; Huffman, Sonya K.; Tegene, Abebayehu; Rickertsen, Kyrre
    Abstract: This paper establishes the econometric underpinning of an aggregate household health production function and an aggregate household heath supply function for developed countries. The conceptual model builds on productive household models for health. A pooled time series cross sectional model of obesity-related mortality is fitted to annual data for 18 high income countries over 1971-2001. In the health production function, we show that obesity-related mortality is related to diet, socialized medicine, and trend dominated factors such as medical knowledge and technology. In the health supply function, we show that cheap food increases obesity-related mortality and a modest level of socialized medicine reduces it. The results for labor market variables imply that individuals who are in the labor force burn more calories in their daily activities than do those who do not work in the market and have lower obesity-related mortality.
    Keywords: health, household production, health production function, health supply function, obesity-related mortality, high income countries
    JEL: D1 I1 Q1
    Date: 2006–05–01
  10. By: Raghbendra Jha; Raghav Gaiha; Anurag Sharma
    Abstract: We test for the existence of a Poverty Nutrition Trap (PNT) in the case of five important micronutrients- calcium, carotene, iron, riboflavin, and thiamine, for three categories of wages: sowing, harvesting, and other for male and female workers separately. We use household level national data for rural India for the period January to June 1994 and robust sample selection procedures due to Heckman to arrive at consistent and efficient estimates. It is discovered that the PNT exists for calcium for female workers engaged in harvesting. In the case of carotene male workers engaged in harvesting are subject to the PNT, whereas both males and females engaged in harvesting are subject to PNT in the case of iron. In the case of riboflavin female workers engaged in harvesting and sowing and male workers engaged in harvesting are subject to PNT and in the case of thiamine female workers engaged in harvesting and sowing are subject to PNT. Thus micronutrient deficiency is having a significant impact on labour productivity in rural India.
    Keywords: Micronutrient deprivation, Poverty Nutrition Trap, Heckman Models
    JEL: C34 I32 J21 J43
    Date: 2006
  11. By: van 't Veld, Klaas; Narain, Urvashi (Resources for the Future); Gupta, Shreekant; Chopra, Neetu; Singh, Supriya
    Abstract: Households in rural India are highly dependent on firewood as their main source of energy, partly because non-biofuels tend to be expensive. The prevailing view is therefore that, when faced with shortages of firewood in the village commons, such households, and especially the women in them, have to spend more and more time searching for firewood and eventually settle for poorer-quality biomass such as twigs, branches and dry leaves. Using data from a random sample of rural households in the Indian state of Madhya Pradesh, we come to very different conclusions, however. We find that households in villages with degraded forests do not spend longer hours searching for firewood, but instead switch to either using firewood from private trees or to using agricultural waste for fuel. In the long run, moreover, households respond to the firewood shortage by altering the mix of private trees on their land in favor of firewood, as opposed to fruit, trees. We find also that, Joint Forest Management, a government program initiated in the 1990s, is having a positive impact on the firewood economy.
    Keywords: firewood crisis, time allocation, fuel switching, JFM, India
    JEL: O13 O18 Q23 Q42
    Date: 2006–05–01
  12. By: Ghalwash, Tarek (Department of Economics, Umeå University)
    Abstract: In this paper we estimate the income elasticity of demand for recreational services and <p> other traditional groups of goods in Sweden and test for potential changes in such <p> estimates over the twentieth century. Due to the difficulty of directly observing the <p> demand for recreational services, we employ an indirect methodology by using the <p> demand for some outdoor goods as a proxy for the demand for recreational services. In <p> line with most prior research, our results confirm the expectation that recreational <p> services, as a public good, is a luxury good in Sweden. Our results also show that the <p> income elasticities for traditional goods are stable over time, indicating that consumer <p> preferences for expenditure on these specific commodities do not change over time.
    Keywords: Household demand; environmental services; income elasticities; Engel curves
    JEL: D12 H41 Q26
    Date: 2006–05–05

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