nep-agr New Economics Papers
on Agricultural Economics
Issue of 2006‒08‒05
fourteen papers chosen by
Angelo Zago
Universita degli Studi di Verona

  1. Institutional Constraints for the Success of Agricultural Biotechnology in Developing Countries: The Case of Bt-Cotton in Shandong Province, China By Pemsl, D.; Waibel, H.; Gutierrez, A.P.
  2. The Fischler's Proposals for the Common Agricultural Policy: Paving the Way for the Future? By Hervé Guyomard; Katell Le Bris
  3. Coping Strategies in Post-War Rural Mozambique By Brück, Tilman
  4. Trade reforms, farm productivity, and poverty in Bangladesh By Klytchnikova, Irina; Diop, Ndiame
  5. Preferential Trading Agreements and Agricultural Liberalization in East and Southeast Asia By Gloria O. Pasadilla
  6. Is Rural Income Diversity Pro-Growth? Is It Pro-Poor? Evidence from Georgia By Bezemer, Dirk; Balcombe, Kelvin; Davis, Junior; Fraser, Iain
  7. Rules of Origin and Non-Tariff Barries in Agricultural Trade: Perspectives from Bangladesh and Cambodia By Uttam Kumar Deb
  8. Multi-Sectoral Uses of Water & Approaches to DSS in Water Management in the NOSTRUM Partner Countries of the Mediterranean By Khaled Abu-Zeid; Sameh Afifi
  9. Nonfarm Employment as Rural Poverty Exit Path?: Evidence from Peru By Jonasson, Erik
  10. Investment and credit effects of land titling and registration: By de Laiglesia, Juan R.
  11. R&D and private investment: How to conserve indigenous fruit biodiversity of Southern Africa By Mithöfer, Dagmar; Wesseler, Justus; Waibel, Hermann
  12. Resource Scarcity Induced Conflict and its Management: Implication for Sustainable Rural Livelihoods in Eastern Ethiopia By Ayalneh Bogale
  13. Land, Technical Progress and the Falling Rate of Profit By Howard Petith
  14. The elimination of Madagascar ' s Vanilla Marketing Board, ten years on By Cadot, Olivier; Dutoit, Laure; de Melo, Jaime

  1. By: Pemsl, D.; Waibel, H.; Gutierrez, A.P.
    Abstract: The use of genetically engineered crop varieties has recently become one option to prevent pest damage in agriculture. The promoters of biotechnology stress the great potential for yield increase and pesticide reduction while the critics point out the potential risks for biodiversity and human health as well as institutional problems for implementation especially in developing countries. The objective of this paper is an in-depth economic analysis of Btcotton production in North East China under small-scale conditions and several years after technology introduction. Data were collected in 2002 (March - October) in Linqing County, a major cotton growing area of Shandong Province, China. Data collection comprised a seasonlong monitoring of Bt-cotton production with 150 farmers from five villages, and three complementary household interviews. In addition, plot-level biological testing was carried out to determine the actual Bt toxin concentration in the varieties that were used by the farmers. All farmers in the case study were growing insect resistant Bt-cotton varieties in 2002. Nevertheless, they sprayed high amounts of chemical pesticides that were almost entirely insecticides. A proportion of 40% of the pesticides applied belonged to the categories extremely or highly hazardous (WHO classes Ia and Ib). The paper reviews methodological issues inherent to impact assessment of crop biotechnology and identifies market and institutional failure as possible reasons for continued high pesticide use. The production function methodology with damage control function was applied and it was found that for both damage control inputs, i.e. Bt and insecticides the coefficients were not significantly different from zero. In contrast to studies that treat Bt varieties as dummy variable in economic models, in this research it was possible to specify Bt toxin concentration in cotton leaf samples as a continuous variable. The results of this study support the notion that introducing Biotechnology in developing countries without enabling institutions that assure proper use of the technology can considerably limit its benefits. Hence it is important to include institutional criteria in the evaluation of agricultural biotechnology especially in developing countries.
    Date: 2005
  2. By: Hervé Guyomard (Unité d'économie et de sociologie rurales - [INRA]); Katell Le Bris (Unité d'économie et de sociologie rurales - [INRA])
    Abstract: The Mid-Term Review proposals presented by the European Commission in July 2002 and January 2003 correspond no doubt to the most radical CAP reform since the latter was established in the early 1960's. This is not because these proposals include firm commitments on market access and export competition dossiers in the perspective of WTO talks. The proposals are silent on these points. This is because they finally achieve the shift from product to producer support by replacing all existing or newly introduced direct income payments, with a few exceptions, by a single decoupled payment per farm, based on historical references and conditional upon cross-compliance to environmental, animal welfare as well as food security and quality criteria. In addition, they expand the scope of rural development instruments to promote food quality, meet higher standards and foster animal welfare and they increase amounts available for rural development by transferring funds from the first to the second pillar via the introduction of an EU-wide system of degression and modulation. This paper discusses these proposals from both an external and internal point of view. We analyse to what extent the MTR proposals could facilitate the EU negotiation position in the WTO. From a domestic point of view, these proposals correspond to appropriate changes in the right direction with however some important qualifications. We analyse these qualifications. We also discuss to what extent the MTR proposals should be considered as the ultimate reform of the CAP or as the third step, after 1992 and 1999, in the long-term process where public intervention would be mainly reserved for correcting market failures, notably the promotion of positive externalities and public goods as well as the reduction in risk and instability faced by agricultural producers.
    Keywords: Common Agricultural Policy (CAP), decoupling, cross-compliance, modulation, World<br />Trade Organisation (WTO)
    Date: 2006–07–27
  3. By: Brück, Tilman
    Abstract: This paper analyses post-war coping strategies by farm households in developing countries. The analysis is based on a portfolio model of activity choices in war-affected rural Sub-Saharan Africa. A case study using farm household survey data estimates the determinants of agricultural coping strategies in post-war Mozambique. Post-war coping strategies are expected to differ from pre- and mid-crisis coping strategies. War-affected households are forced to adopt very risky coping strategies that re-enforce their vulnerability. Households choose between market and non-market forms of exchange and even exit markets entirely. Post-war reconstruction policy should focus on re-capitalizing households and providing public goods.
    Keywords: agriculture, households, rural development, war, Mozambique, Africa
    Date: 2005
  4. By: Klytchnikova, Irina; Diop, Ndiame
    Abstract: This paper analyzes the distributional impacts of trade reforms in rural areas of Bangladesh. The liberalization of trade in irrigation equipment and fertilizer markets during the early 1990s has led to structural changes in the agricultural sector and a significant increase in rice productivity. A resulting increase in output has been associated with a decline in producer and consumer rice prices of approximately 25 percent. Using a combination of ex-post and ex-ante approaches, the authors investigate the implications of the changes in rice productivity and prices for the welfare of households. They find that the net effects of increased rice productivity and lower rice prices have benefited the poor. Regardless of the particular category analyzed, the poorest households emerged as being particularly positively affected by reforms in the 1990s. This mainly reflects the fact that they are predominantly net rice buyers in both urban and rural markets. In contrast, large net sellers of rice, among the better-off households in the rural areas, were the main losers. Since net buyers in rural areas tend to be poorer than net sellers, trade liberalization has benefited the poor. Although the authors are not able to test empirically what has happened to the welfare level of agricultural wage earners, secondary evidence suggests that they have gained from trade liberalization.
    Keywords: Rural Poverty Reduction,Economic Theory & Research,Markets and Market Access,Crops & Crop Management Systems
    Date: 2006–08–01
  5. By: Gloria O. Pasadilla (Philippine Institute for Development Studies)
    Abstract: The paper analyzes how various preferential trading arrangements deal with agriculture liberalization and examines a few case studies highlighting the provisions on agriculture. It assesses the effect of preferential trade agreements on agriculture trade flows in the case of ASEAN. It finds that while the tariff reduction on all goods, including agriculture, in ASEAN provides a marked advantage from the MFN tariff rates, intra-ASEAN agriculture trade have not been all that significant.
    Keywords: Preferential Trading Agreements, Agricultural Liberalization
    JEL: F1
    Date: 2006–04
  6. By: Bezemer, Dirk; Balcombe, Kelvin; Davis, Junior; Fraser, Iain
    Abstract: This paper contributes to the literature on the role of on rural livelihood strategies in rural growth and poverty reduction. It distinguishes between livelihood diversity strategies that contribute to sustainable growth in household incomes, and those that mainly have a 'coping' function. It suggests that typically, the contribution of livelihood diversity to growing household income is through relaxing dependence on credit for access to capital. In this scenario, livelihood diversity would lead to higher technical efficiency in agriculture via investment and thereby to higher household incomes. Survey data from Georgia are introduced and used to test these hypotheses using a Bayesian stochastic frontier approach. The findings are relevant to defining more clearly the scope and aims of policies to stimulate the rural non-farm economy in developing and transition countries.
    Keywords: livelihoods analysis, survey data, incomes, efficiency, Bayesian stochastic frontier approach
    Date: 2005
  7. By: Uttam Kumar Deb (Centre for Policy Dialogue)
    Abstract: Many developed and developing countries have been offering special schemes to benefit least developed countries (LDCs) from trade through increased market access. However, effective utilization of market access opportunities by the LDCs may be constrained by the rules of origin (RoO) criteria and non-tariff measures (NTMs) applied by the preference-giving countries. This report deals with RoO applied and non-tariff barriers (NTBs) imposed by developed and developing countries for importing agricultural products from LDCs.
    Keywords: Rules of Origin, Non-Tariff Measures
    JEL: F1
    Date: 2006–04
  8. By: Khaled Abu-Zeid (CEDARE); Sameh Afifi (CEDARE)
    Abstract: Agriculture contributes an average of about 10% to the GDP of the partner countries of the Mediterranean involved in the project NOSTRUM. On the other hand, industry contributes an average of about 30% in these countries. It is to remark that in almost all countries the weight of industry accounts between 20% and 30% of the national economy, with the exception of Algeria, where this weight is at about 60%, mainly imputable to the great development of oil extraction and energy sector. In the majority of participating countries, agriculture sector is the greatest consumer of water (more than 65% of total water consumption). Although the case from France where agriculture water use is only about 10% of total water consumption and Italy with around 45%, but this may be due to the fact that most countries reporting for their agricultural water consumption do not include the amount of rain-fed to cultivated lands as a part of their agriculture water use. Most agriculture water use is limited to irrigation water from streams/rivers and groundwater. Rain-fed cultivated-lands in France is almost 90% of its total cultivated area. For Croatia, data given in National Report indicate a 0% of water use for agriculture. The average of water use for agriculture for all the basin is of 62.3% but with a great scatter expressed by a high standard deviation (26.8%) that reflects a wide variation range of water use for agriculture among different countries. The average of water use for agriculture is weakly less on northern countries (52.7%) than on southern countries (75.2) but the twice values are still on the range of the average of the all basin and cannot be taken as indication of difference between north and south. Integrated Water Resources Management (IWRM) plans are currently developed and implemented by various countries to organize the multi-sectoral water uses. On the other hand, the need for Decision Support System (DSS) as a tool in developing and implementing Integrated Water Resources Management (IWRM) is in growing demand. In spite of the great potential for the research and the development of DSS, the utilization of DSS in water management is not widely spread in the partner countries. In some countries, DSS was planned and developed at the scale of territorial integrated water management. Integration of DSS application to the existing IWRM systems at the partner countries would assist in satisfying the water related Millennium Development Goals (MDGs).
    Keywords: Integrated Water Resources Management, Decision Support Systems, Mediterranean Basin
    JEL: O21 Q01 Q25
    Date: 2006–06
  9. By: Jonasson, Erik
    Abstract: The poverty incidence among the rural population in Latin America is above 50 percent. Peru mimics the Latin American picture fairly well, with a rural poverty of about 65 percent. The rural nonfarm sector has gained increasing attention lately, considered as having the potential to absorb a growing rural labor force, drive some of the rural poor out of poverty, and to increase the overall economic performance of the rural economy. This paper tests to what extent there is a better earnings potential for rural households in the nonfarm sector as opposed to engaging in own farming or agricultural wage labor. Regression results show that there is an earnings differential ranging from 50 to 240 percent, keeping individual and household characteristics constant. The results support the view of nonagricultural employment as a potential poverty exit path, and that education is not necessarily a prerequisite for remunerative income diversification in form of such employment. The observed income differential might be due to entry barriers to the nonagricultural labor market, which needs to be recognized in any rural development strategy aiming at strengthening the nonagricultural sector.
    Date: 2005
  10. By: de Laiglesia, Juan R.
    Abstract: This paper analyzes the importance of legal property documents in providing tenure security, enhancing agricultural investment incentives and easing access to credit. While theory predicts that better property rights on land can increase investment through increased security, enhanced trade opportunities and increased collateral value of land, the presence and size of these effects depend crucially on whether those rights are properly enforced. In Nicaragua, a troubled history of land expropriation and invasion has undermined the credibility of the legal property regime. The variation in legal ownership status due to a land titling and regularization programme is studied to identify the effects of legal ownership documents. Possession of a registered document is found to increase the probability of carrying out land-attached investments by 35%. No difference is found in the effect of public deeds and agrarian reform titles provided they are both registered and we find no strong evidence of a credit supply link, thus suggesting security of tenure as the channel through which formal land ownership has an effect on investment.
    Keywords: Property rights, investment, land reform, Nicaragua, land ownership
    JEL: D23 K11 O13 Q15
    Date: 2005
  11. By: Mithöfer, Dagmar; Wesseler, Justus; Waibel, Hermann
    Abstract: Indigenous fruits contribute widely to rural incomes in Southern Africa but their availability is declining. A domestication program aims to increase farm-household income and conserve biodiversity through farmer-led tree planting. Planting domesticated indigenous fruit trees is an uncertain, irreversible but flexible investment. Our analysis applies the real option approach using contingent claims analysis, which allows solving the discounting problem. The article analyses (1) to what level fruit collection cost and/or (2) the necessary technical change, i.e. breeding progress, have to rise in order to render tree planting economical, using data from income portfolios of rural households in Zimbabwe. Results currently show that collecting indigenous fruits is more profitable than planting the trees. A combination of technical change and decrease in resource abundance can provide incentives for farmer-led planting of domesticated trees and biodiversity conservation. However, breeding progress must be significant for investment in tree planting to be economically attractive.
    Keywords: indigenous fruits, real option, technology adoption, uncertainty, ex ante impact assessment, Zimbabwe
    JEL: O13 Q01 Q16 Q23
    Date: 2005
  12. By: Ayalneh Bogale (Alemaya University)
    Date: 2006
  13. By: Howard Petith
    Abstract: The paper sets out a one sector growth model with a neoclassical production function in land and a capital-labour aggregate. Capital accumulates through capitalist saving, the labour supply is infinitely elastic at a subsistence wage and all factors may experience factor augmenting technical progress. The main result is that, if the elasticity of substitution between land and the capital-labour aggregate is less than one and if the rate of caital augmenting technical progress is strictly positive, then the rate of profit will fall to zero. The surprise is that this result holds regardless of the rate of land augmenting technical progress; that is, no amount of technical advance in agriculture can stop the fall in the rate of profit. The paper also discusses the relation of this result to the classical and Marxist literature and sets out the path of the relative price of land.
    Keywords: Marx, classical economics, falling rate of profit
    JEL: B24 E11 O41
    Date: 2006–09–01
  14. By: Cadot, Olivier; Dutoit, Laure; de Melo, Jaime
    Abstract: This paper explores how the elimination of Madagascar ' s Marketing Board in 1995 affected prices paid to farmers, incentives, and regional indicators of poverty and inequality. After steadily losing market share, Madagascar has been able to regain some of the lost ground since the mid-1990s. Margins between freight on board (FOB) and farmgate prices have spectacularly narrowed down, but this effect is dwarfed by that of world-price volatility. A counterfactual analysis based on a model of Cournot competition between vanilla traders suggests that whatever limited competition there is among them has contributed to raise purchase prices and the cash income of vanilla farmers. But the effect on farmers ' consumption remains small because a large part of it is self-consumed. The effect on aggregate measures of poverty and inequality is even smaller, even at the regional level. After taking into account the reduction in Madagascar ' s monopoly power on the world vanilla market implied by the elimination of the Marketing Board, the induced rise in producer prices is estimated to have lifted about 20,000 individuals out of poverty.
    Keywords: Markets and Market Access,Access to Markets,Economic Theory & Research,Crops & Crop Management Systems,Food & Beverage Industry
    Date: 2006–08–01

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