New Economics Papers
on Agricultural Economics
Issue of 2007‒04‒21
fourteen papers chosen by

  1. Smallholder Household Maize Production and Marketing Behavior in Zambia and Its Implications for Policy. By Ballard Zulu; T.S. Jayne; Margaret Beaver
  2. Pathways Out of Poverty During an Economic Crisis: An Empirical Assessment of Rural Indonesia By Neil McCulloch; C. Peter Timmer; Julian Weisbrod
  3. Human Capital Investment and Poverty Reduction over Generations: A Case from the Rural Philippines, 1979-2003 By Takahashi, Kazushi; Otsuka, Keijiro
  4. Watching Corn Grow: A Hedonic Study of the Iowa Landscape By Secchi, Silvia
  5. Urgent Need for Effective Public-Private Coordination in Zambia’s Cotton Sector. Deliberations on the Cotton Act. By David Tschirley; Stephen Kabwe
  6. Domestic support and tariff reductions in the presence of non-tariff barriers: A gravity model for primary and processed agricultural products By Tamini, Lota; Ghazalian, Pascal; Gervais, Jean-Philippe; Larue, Bruno
  7. A Gravity approach to evaluate the significance of trade liberalization in vertically-related goods in the presence of non-tariff barriers By Ghazalian, Pascal; Tamini, Lota; Larue, Bruno; Gervais, Jean-Philippe
  8. Does sending farmers back to school have an impact? a spatial econometric approach By Satoshi Yamazaki; Budy P. Resosudarmo
  9. Determinants of Credit Participation and Its Impact on Household Consumption: Evidence From Rural Vietnam By Cuong H. Nguyen
  10. Do Formula or Competitive Grant Funds Have Greater Impacts on State Agricultural Productivity? By Huffman, Wallace; Evenson, R. E.
  11. Ordering the Extraction of Polluting Nonrenewable Resources By CHAKRAVORTY, Ujjayant; MOREAUX, Michel; TIDBALL, Mabel
  12. Efficiency in Managing the Environment and the Opportunity Cost of Pollution Abatement By Subhash C. Ray; Kankana Mukherjee
  13. Consensus Building: How to Persuade a Group By TIROLE, Jean
  14. Efficiency in Public Research Centers: Evaluating the Spanish Food Technology Program By Jiménez-Sáez, Fernando; Zabala-Iturriagagoitia, Jon Mikel; Zofío, José Luis

  1. By: Ballard Zulu; T.S. Jayne; Margaret Beaver
    Abstract: The ability of agricultural policy makers to promote national development objectives requires an accurate and reasonably current picture of what crops farmers grow, what they eat, the importance of various crops in their incomes, and how they spend their money. In Zambia’s case, there is reasonably accurate information on production levels and trends in a specific set of crops grown by smallholder farmers, but very little knowledge of how important these specific crops are in smallholders’ total crop incomes, the importance of crop production in total smallholder incomes (which include livestock and non-farm activities), and how changes in crop prices affect smallholders’ welfare. This paper presents a comprehensive picture of crop production and marketing patterns in Zambia’s small- and medium-scale farm sector, examines how these patterns vary regionally, and examines differences between poor and non-poor strata of the rural farm sector. The data presented comes from the 1999/00 and 2002/03 production years, corresponding to the 2000/01 and 2003/04 marketing years. Because so much policy attention in Zambia is focused on maize, the study provides a particular emphasis on small farmers’ maize production and marketing behavior, and discusses their implications for policy.
    Keywords: food security, food policy, maize, marketing, production, Zambia, Africa
    JEL: Q18
    Date: 2007
  2. By: Neil McCulloch; C. Peter Timmer; Julian Weisbrod
    Abstract: Most poor people in developing countries still live in rural areas and are primarily engaged in low productivity farming activities. Thus pathways out of poverty are likely to be strongly connected to productivity increases in the rural economy, whether they are realised in farming, rural non-farm enterprises or via rural-urban migration. We use cross-sectional data from the Central Statistical Board (BPS) for 1993 and 2002, as well as a panel data set from the Indonesia Family Life Survey (IFLS) for 1993 and 2000, to show which pathways out of poverty were most successful over this period. Our findings suggest that increased engagement of farmers in rural non-farm enterprises is an important route out of rural poverty, but that most of the rural agricultural poor that exit poverty still do so while remaining rural and agricultural. Thus changes in agricultural prices, wages and productivity still play a critical role in moving people out of poverty.
    Keywords: Poverty dynamics, non-farm sector, micro-growth regression
    JEL: O12 O13 O18 O53 R11
  3. By: Takahashi, Kazushi; Otsuka, Keijiro
    Abstract: This paper attempts to identify a pathway out of poverty over generations in the rural Philippines, based on long-term panel data spanning for nearly a quarter of a century. Specifically, it sequentially examines the determinants of schooling, subsequent occupational choices, and current non-farm earnings for the same individuals. We found that an initial rise in parental income, brought about by the land reform and the Green Revolution, among other things, improves the schooling of children, which later allows them to obtain remunerative non-farm jobs. These results suggest that the increased agricultural income, improved human capital through schooling and the development of non-farm sectors are the keys to reducing poverty in the long run. It must be also pointed out that the recent development of the rural non-farm sector offers ample employment opportunities for the less educated, which also significantly contributed to the poverty reduction.
    Keywords: Intergenerational poverty dynamics, Child schooling, Occupational choice, Non-farm earnings, Philippines, Poverty, Rural societies, Human resources
    JEL: I32 J24 J62 O15
    Date: 2007–03
  4. By: Secchi, Silvia
    Abstract: Landscape amenities can be scarce in places with large areas of open space. Intensely farmed areas with high levels of monocropping and livestock production are akin to developed open space areas and do not provide many services in terms of landscape amenities. Open space in the form of farmland is plentiful, but parks and their services are in short supply. This issue is of particular importance for public policy because it is closely linked to the impact of externalities caused by agricultural activities and to the indirect effects of land use dynamics. This study looks at the impact of landscape amenities on rural residential property values in five counties in North Central Iowa using a hedonic pricing model based on geographic information systems. The effect of cropland, pasture, forest, and developed land as land uses surrounding the property is considered, as well as the impact of proximity to recreational areas. The study also includes the effect of other disamenities, such as livestock facilities and quarries, which can be considered part of the developed open space and are a common feature of the Iowa landscape.
    Keywords: environmental management, hedonic analysis, land use, spatial externalities.
    Date: 2007–04–18
  5. By: David Tschirley (Department of Agricultural Economics, Michigan State University); Stephen Kabwe (Department of Agricultural Economics, Michigan State University)
    Abstract: Cotton is an unquestioned success of Zambia’s turn towards a market economy. Yet the entry over the past two years of new players has put the sector under great stress and may have pushed it to a turning point. Now more than ever, effective “rules of the game” are urgently needed to protect Zambia’s remarkable cotton success story. Other countries in southern and eastern Africa have seen dramatic declines in input credit and extension to farmers, and in cotton quality, when competition among ginning firms intensified in the absence of suitable rules of the game. The focus in Zambia must be on establishing broadly accepted rules of the game that ensure honest competition that does not undermine input credit, extension, and cotton quality.
    Keywords: food security, food policy, Zambia, cotton, production, marketing
    JEL: Q20
    Date: 2007
  6. By: Tamini, Lota; Ghazalian, Pascal; Gervais, Jean-Philippe; Larue, Bruno
    Abstract: Agricultural trade liberalization negotiations are currently at a crossroads. Progress was made to eliminate export subsidies, but small open economies’ demand for lower domestic support and tariffs on agricultural goods do not find much support among large policy active countries. Many non-tariff barriers still also impede agricultural trade. This paper presents the theoretical foundations of a gravity model to explain trade flows of both primary agricultural commodities and processed foods. At the consumer level, commodities are differentiated according to their country of origin while primary agricultural goods are homogenous from the buyers’ perspective. However, primary goods can not be substituted costlessly across destinations from the sellers’ perspective due to differences in technical and sanitary regulations between countries. These assumptions yield well-behaved import demand functions at the consumer level and export supply functions at the producer level. Imperfect substitutability at the consumption and production levels is summarized in two important structural parameters. The role of these parameters in explaining bilateral trade patterns is illustrated for a three-country world market using a numerical example. The simulation investigates whether it is more important for a small open economy that large policy active countries reduce agricultural tariffs or domestic support. It also addresses the implications of tariff escalation on trade flows.
    Keywords: Agri-food trade liberalization; Gravity models; tariffs; domestic support; tariff escalation.
    JEL: Q17 F13
    Date: 2006–04–01
  7. By: Ghazalian, Pascal; Tamini, Lota; Larue, Bruno; Gervais, Jean-Philippe
    Abstract: A gravity-based model is developed to explain bilateral trade flows in primary and processed agri-food commodities. It innovates by explicitly accounting for the vertical production linkages between primary and processed agri-food products, tariffs, and subsidies and by estimating the restrictiveness of non-tariff barriers in the upstream sector. Our application focuses on cattle/beef trade flows between forty-two countries. The structural parameters of the model are used to simulate trade flows under various scenarios of import tariffs and domestic and export subsidies reductions. The United States and Australia emerge as the exporting countries that stand to benefit the most from cuts in tariffs and subsidies as bovine meat imports in the European Union and Japan significantly increase. A bootstrap procedure is used to generate confidence intervals around predicted trade liberalization outcomes.
    Keywords: Gravity model; cattle/beef trade
    JEL: Q17 F13
    Date: 2007–04–01
  8. By: Satoshi Yamazaki; Budy P. Resosudarmo
    Abstract: The Farmer Field School (FFS) is an intensive training program providing farmers with science based knowledge and practices, including integrated pest management (IPM). Recently there has been intensive debate as to whether or not this kind of training has any significant impact. Most case studies argue that the impact, in terms of a farmer’s ability to reduce the use or pesticides while increasing yields, is significant. However, studies conducted by Feder et al., using a household panel data set for Indonesia, could not confirm that this is the case. This paper utilizes Feder et al.’s data set and applies a modified model specification and a spatial econometric technique to re-evaluate whether or not the FFS induces better performances among farmers enrolled in the program and also among their neighbors, who are expected to receive some spillover knowledge from the FFS alumna.
    Keywords: agricultural economics, spatial econometrics, economic development
    JEL: Q12 C59 O13
    Date: 2007
  9. By: Cuong H. Nguyen
    Abstract: This paper analyses the Vietnam's rural credit market to understand the determinants of credit choices and to measure impacts of borrowing activities on borrower's consumption in the 1992-1998 period. There are three main results. First, there exists uniform access to formal credit among rural households in Vietnam. Households' financial activity is found to be determined by household size and agricultural work rather than education or distance from the commune to the nearest bank branch. Education level seems to have an inverse U-shape effect on credit taking possibility; the least and the most educated households borrow least. Second, there is evidence of money lenders being crowded out by formal institutions via competition. Finally, we apply fix-effected regression and propensity score matching estimation on cross-sectional and panel data to assess impact of credit taking on household consumption. Our study demonstrates that formal credit positively affects borrowers' consumption while informal finance has mixed results.
    Keywords: rural credit, credit participation, Vietnam
    JEL: O12 O16 O17
    Date: 2007
  10. By: Huffman, Wallace; Evenson, R. E.
    Abstract: This paper describes major external changes to the U.S. public agricultural research system over 1988-1999; describes the reactions of the public agricultural research system to the external changes, specifying the innovations that have occurred over the last decade; and draws conclusions about the present and future performance of the U.S. research system. The decade of the 1990s brought slow growth to public agricultural research funding. CSREES tried to stimulate greater interests in competitive grant programs. The states have generally resisted this move. A major asymmetry exists in the sharing of transactions costs associated with external peer-reviewed competitive grant programs. This is especially true when the average grant size is small and the average award rate is low.
    Date: 2007–04–17
  11. By: CHAKRAVORTY, Ujjayant; MOREAUX, Michel; TIDBALL, Mabel
    JEL: Q12 Q32 Q41
    Date: 2006–09
  12. By: Subhash C. Ray (University of Connecticut); Kankana Mukherjee (Worcester Polytechnic Institute)
    Abstract: Using the directional distance function we study a cross section of 110 countries to examine the efficiency of management of the tradeoffs between pollution and income. The DEA model is reformulated to permit 'reverse disposability' of the bad output. Further, we interpret the optimal solution of the multiplier form of the DEA model as an iso-inefficiency line. This permits us to measure the shadow cost of the bad output for a country that is in the interior, rather than on the frontier of the production possibilities set. We also compare the relative environmental performance of countries in terms of emission intensity adjusted for technical efficiency. Only 10% of the countries are found to be on the frontier. Also, there is considerable inter-country variation in the imputed opportunity cost of CO2 reduction. Further, differences in technical efficiency contribute substantially to differences in the observed levels of CO2 intensity.
    Keywords: Data Envelopment Analysis, directional distance function, pollution- income tradeoff, shadow price.
    Date: 2007–04
  13. By: TIROLE, Jean
    Date: 2007–01
  14. By: Jiménez-Sáez, Fernando (INGENIO (CSIC-UPV)-Universidad Politécnica de Valencia, Valencia, Spain); Zabala-Iturriagagoitia, Jon Mikel (INGENIO (CSIC-UPV)-Universidad Politécnica de Valencia, Valencia, Spain); Zofío, José Luis (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: We rely on efficiency analysis to evaluate the Spanish R&D public policy based on financial incentives, and investigate to what extent this instrument has been able to promote a multidimensional research output mix, contributing to the articulation of a successful Spanish Food Innovation System. Introducing the use of the generalized distance function within DEA techniques, we assess whether this policy has encouraged the creation, strengthening and promotion of efficient public research units, whose activities present a balanced and comprehensive production of complementary research outputs −personnel training, science and technology results, and socio-economic collaboration with the private sector. Characterizing the alternative ways in which the different research units have been participating in the Spanish Food Technology Program, and hence their role within the innovation system, we conclude that R&D policy efforts have not succeeded in orienting research units toward a balanced output research mix due to wrong incentives and the lack of a sustained budget that would enable the consolidation of emerging research units. Furthermore, we observe that the majority of research units channel their efforts toward achieving science-technology results related to publications and submitted patents, instead of increasing socio-economic results that would strengthen the articulation and efficiency of the innovation system.
    Keywords: Innovation System Management; Research Efficiency; Data Envelopment Analysis
    JEL: C61 D78
    Date: 2007–03

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