nep-agr New Economics Papers
on Agricultural Economics
Issue of 2007‒05‒12
sixteen papers chosen by
Angelo Zago
University of Verona

  1. Impact of High Crop Prices on Environmental Quality: A Case of Iowa and the Conservation Reserve Program By Secchi, Silvia; Babcock, Bruce A.
  2. The Impact of a Philippine-US FTA: The Case of Philippine Agriculture By Rodriguez, U-Primo; Cabanilla, Liborio S.
  3. Agricultural Trade Between the Philippines and the US: Status, Issues and Prospects By Cabanilla, Liborio S.
  4. FAPRI 2007 U.S. and World Agricltural 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. Boda-bodas Rule: Non-agricultural Activities and Their Inequality Implications in Western Kenya By Jann Lay; George Michuki M’Mukaria; Toman Omar Mahmoud
  6. Preferential Trading Agreements and Agricultural Liberalization in East and Southeast Asia By Pasadilla, Gloria
  7. Understanding the World Wool Market: Trade, Productivity and Grower Incomes. Part 5: Relative Returns to Australian Wool Producers of On- and Off-Farm Research By George Verikios
  8. Land Reform and Changes in Land Ownership Concentration: Evidence from Rice-Growing Villages in the Philippines By Ballesteros, Marife Magno; dela Cruz, Alma
  9. Using a Hedonic Model of Solar Radiation to Assess the Economic Effect of Climate Change: The Case of Mosel Valley Vineyards By Orley C. Ashenfelter; Karl Storchmann
  10. Alternative Use Systems for the Remaining Cloud Forest in Ethiopia and the Role of Arabica Coffee - A Cost-Benefit Analysis By Reichhuber, Anke; Requate, Till
  11. Agricultural Outputs and Conflict Displacement: Evidence from a Policy Intervention in Rwanda By Florence Kondylis
  12. Rural Poverty in China: Problem and Policy By Gregory C. Chow
  13. Review and Evaluation of Publicly Funded Research and Development in Agro Processing By de Leon, Augusto L.
  14. The European Union preferential trade with developing countries. Total trade restrictiveness and the case of sugar By Conforti, Piero; Ford, Deep; Hallam, David; Rapsomanikis, George; Salvatici, Luca
  15. Understanding the World Wool Market: Trade, Productivity and Grower Incomes. Part 1: Introduction By George Verikios
  16. Preferential trade agreements and agricultural trade liberalization in Asia and the Pacific By Mikic, Mia

  1. By: Secchi, Silvia; Babcock, Bruce A.
    Abstract: Growing demand for corn due to the expansion of ethanol has increased concerns that environmentally sensitive lands retired from agricultural production into the Conservation Reserve Program (CRP) will be cropped again. Iowa produces more ethanol than any other state in the United States, and it also produces the most corn. Thus, an examination of the impacts of higher crop prices on CRP land in Iowa can give insight into what we might expect nationally in the years ahead if crop prices remain high. We construct CRP land supply curves for various corn prices and then estimate the environmental impacts of cropping CRP land through the Environmental Policy Integrated Climate (EPIC) model. EPIC provides edge-of-field estimates of soil erosion, nutrient loss, and carbon sequestration. We find that incremental impacts increase dramatically as higher corn prices bring into production more and more environmentally fragile land. Maintaining current levels of environmental quality will require substantially higher spending levels. Even allowing for the cost savings that would accrue as CRP land leaves the program, a change in targeting strategies will likely be required to ensure that the most sensitive land does not leave the program.
    Keywords: agricultural markets, Conservation Reserve Program, environmental quality.
    Date: 2007–05–03
  2. By: Rodriguez, U-Primo; Cabanilla, Liborio S.
    Abstract: The paper examines the effect of an RP-US FTA in the Philippine agricultural sector. Using an Applied General Equilibrium (AGE) Model, it analyzes the impact of the removal of tariffs on imports from the US on the various commodities in agriculture and food processing. The simulation results suggest that most of the commodities in these sectors experience gains in output and employment following the removal of Philippine tariffs on its imports from the U.S. It also shows that the benefits of agriculture and food processing from the FTA are larger with a comprehensive removal of tariffs.
    Keywords: economic/development modelling, Philippine agriculture production, consumption and employment, foreign and domestic markets, tariff change and removal
    Date: 2006
  3. By: Cabanilla, Liborio S.
    Abstract: The paper describes the environment under which RP-US agricultural trade currently operates. It also highlights key issues affecting current trade flows between the Philippines and the US, and provides background information vital for future bilateral agricultural negotiations with the U.S. Further to this, it shows that two major factors will determine the prospective net effects of a RP-US FTA on Philippine agriculture. First, the effects on exports will depend on the extent of US reduction of NTBs, particularly on mangoes, carrageenan, and canned tuna. Second, Philippine imports from the US will depend on its willingness to reconsider position, particularly on rice and corn. On this count, it must be noted that rice is an important wage good, and corn is a key livestock feed ingredient. Moreover, the advent of an FTA with the US should be a good reason to get Philippine agriculture better organized, in terms of policy and institutional support.
    Keywords: liberalization, market access, agricultural trade, US agriculture support programs, domestic support programs, nontariff barriers, border controls
    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 2007 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. The outlook uses a macroeconomic forecast developed by Global Insight.
    Keywords: FAPRI Outlook
    Date: 2007–05–04
  5. By: Jann Lay (Kiel Institute for the World Economy, Germany); George Michuki M’Mukaria (GIGA German Institute of Global and Area Studies); Toman Omar Mahmoud (Kiel Institute for the World Economy, Germany)
    Abstract: Engagement in non-agricultural activities in rural areas can be classified into survival-led or opportunity-led. Survival-led diversification would decrease inequality by increasing the incomes of poorer households and thus reduce poverty. By contrast, opportunity-led diversification would increase inequality and have a minor effect on poverty, as it tends to be confined to non-poor households. Using data from Western Kenya, we confirm the existence of the differently motivated diversification strategies. Yet, the poverty and inequality implications differ somewhat from our expectations. Our findings indicate that in addition to asset constraints, rural households also face limited or relatively risky high-return opportunities outside agriculture.
    Keywords: Income diversification, non-agricultural activities, inequality, poverty, sub-Saharan Africa, Kenya
    JEL: Q12 O17 I31
    Date: 2007–04
  6. By: Pasadilla, Gloria
    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. Most of the growth in the intra-ASEAN trade had come from trade in industry; and if total agriculture trade had expanded, much of it was due to trade outside the region. The paper argues that AFTA, by original design, had not really been made to boost intraregional agriculture trade, but rather to facilitate the interindustry trade arising out of the vertically integrated network of manufacturing transnational corporations.
    Keywords: tariff, ASEAN, ASEAN Free Trade Area (AFTA), free trade agreement (FTA), regional trade liberalization, preferential trading arrangements, relative tariff ratios, agriculture
    Date: 2006
  7. By: George Verikios (UWA Business School, The University of Western Australia)
    Abstract: This is Chapter 5 of my PhD thesis Understanding the World Wool Market: Trade, Productivity and Grower Incomes, UWA, 2006. The full thesis is available as Discussion Papers 06.19 to 06.24. Here we apply WOOLGEM (the model outlined in Chapter 4) to analyse the effects of on- and off-farm research (and development) leading to productivity improvements in the multistage wool production system. In doing so, we focus on the relative returns to Australian wool producers of on- and off-farm research. The research question is motivated by the continued existence of significant wool industry levies used to fund, inter alia, research at different stages of the Australian wool production system. The levies amount to two per cent of revenue from sales of greasy wool and are used to fund both on and off-farm research (AWIL 2005). For the Australian wool industry, investing the levies on research in the production stage that provides the largest benefit to farmers is crucial for farm profitability in both the short and long term.
    Date: 2006
  8. By: Ballesteros, Marife Magno; dela Cruz, Alma
    Abstract: This paper examines the effect of land reform and land transfer actions of farmer beneficiaries on land ownership concentration. A case study of two rice-growing villages was used to track down ownership changes over a period of time. Land reform has succeeded in the break up of huge estates in rice-growing villages but has not effectively improved land ownership concentration due to evasions tactics of landlords who have retained a significant portion of lands to the family through land schemes that are apparently legitimate under the land reform laws. Land transfer actions of farmer beneficiaries have not necessarily worsen the current land ownership concentration but in the absence of progressive land tax, these actions can lead to widening land concentration.
    Keywords: land reform, land ownership concentration, land ownership consolidation
    Date: 2006
  9. By: Orley C. Ashenfelter (Princeton University); Karl Storchmann (Whitman College)
    Abstract: In this paper we provide a simple, credible method for assessing the effects of climate change on the quality of agricultural land and then apply this method using a rich set of data on the vineyards of the Mosel Valley in Germany. The basic idea is to use a simple model of solar radiation to measure the amount of energy collected by a vineyard, and then to establish the econometric relation between energy and vineyard quality. Coupling this hedonic function with the elementary physics of heat and energy permits a straightforward calculation of the impact of any climate change on vineyard quality (and prices). We show that the variability in vineyard quality in this region is due primarily to the extent to which each vineyard is able to capture radiant solar energy, so that these data provide a particularly credible “experiment” for identifying and measuring the appropriate hedonic equation. Our empirical results indicate that the vineyards of the Mosel Valley will increase in value under a scenario of global warming, and perhaps by a considerable amount. Vineyard and grape prices increase more than proportionally with greater ripeness, so that we estimate a 3°C increase in temperature would more than double the value of this vineyard area, while a 1°C increase would increase prices by about 20 percent.
    Date: 2006–07
  10. By: Reichhuber, Anke; Requate, Till
    Abstract: This paper presents a cost-benefit analysis of three different use systems for the remaining cloud forests in Ethiopia which at present are being depleted at a rate of 8% per year. These use systems are traditional conversion to crop land, sustainable management of the forest (e.g. by growing high-quality semi-forest coffee), and strict protection. We find that conversion to cropland yields the highest net present income value for the local population, and at discount rates of 10% is even in the best interests of the country. For discount rates of at 5% or lower, sustainable forest use is in the best interests of the country. Taking into account the global benefits of biodiversity conservation and carbon storage, sustainable forest management yields the highest total economic value.
    Keywords: cost-benefit analysis, biodiversity, coffee, Ethiopia
    Date: 2007
  11. By: Florence Kondylis (The Earth Institute at Columbia University)
    Abstract: In 1997 Rwanda introduced a re-settlement policy for refugees displaced during previous conflicts. We exploit geographic variation in the speed of implementation of this policy to investigate the impact of conflict-induced displacement and the re-settlement policy on household agricultural output and on skill spill-over mechanisms between returnees and stayers. We find that returns to onfarm labour are higher for returnees relative to stayers, although the evidence suggests that the policy contributed little additional effect to this differential. More speculatively, these differentials suggest that, upon return from conflict-induced exile, returnees are more motivated to increase their economic performance.
    Date: 2007–04
  12. By: Gregory C. Chow (Princeton University)
    Abstract: This paper describes the economic conditions of rural China regarding poverty. By dividing the problem of rural poverty into three components it explains why rural poverty is China’s No. 1 economic problem in spite of the significant improvement in the living standard of the rural population. After discussing the solution proposed by the Chinese government it raises two policy questions, one concerning a proposal to eliminate the operational functions of township governments in the streamlining of the local government structure and the second on the possibility of controlling the abuse of power by local party officials that infringes on the rights of the farmers. A comparison with the conditions in India is provided.
    Date: 2006–09
  13. By: de Leon, Augusto L.
    Abstract: This paper starts off with a review and evaluation of publicly funded agro research and development. It also discusses the role of public and private sectors in the management of research institutions. In addition, it identifies public research programs on specific agricultural commodities that will assist the private sector in the government’s research and development program.
    Keywords: research and development sector, research
  14. By: Conforti, Piero; Ford, Deep; Hallam, David; Rapsomanikis, George; Salvatici, Luca
    Abstract: Preferential trade agreements are a central issue in the multilateral trade liberalization process. The extent to which such agreements are effective in improving market access for developing and developed countries is important because trade liberalization results in eroding their value to the beneficiary countries, expressed as export revenue. This paper focuses on the estimation of a theoretically founded bilateral aggregated measure of trade restrictiveness, the Mercantilistic Trade Restrictiveness Index, by means of a general equilibrium model, in order to measure the effectiveness of preferences granted by the European Union. We also develop an empirical model structure, comprising a partial equilibrium model for the sugar market and a gravity model, in order to replicate least developed countries bilateral trade with Europe, and to estimate the erosion in the value of preferences granted to African, Caribbean and Pacific countries and to least developed countries brought about by changes in the Common Market Organization for sugar and the Everything but Arms initiative. The results highlight the importance of sugar in determining the degree of trade restrictiveness faced by developing countries. Sugar sector policy reform in Europe is expected to result in a significant reduction in the African Caribbean and Pacific countries’ export revenue, whilst the initial impact on least developed countries may be limited, but increasing in the medium run.
    Keywords: preferential trade, sugar, policy reform
    JEL: Q18 C23 C53 C68
    Date: 2007–04–26
  15. By: George Verikios (UWA Business School, The University of Western Australia)
    Abstract: This is the front matter and Chapter 1 of my PhD thesis Understanding the World Wool Market: Trade, Productivity and Grower Incomes, UWA, 2006. The full thesis is available as Discussion Papers 06.19 to 06.24. The core objective of this thesis is summarised by its title: “Understanding the World Wool Market: Trade, Productivity and Grower Incomes”. Thus, we wish to aid understanding of the economic mechanisms by which the world wool market operates. In doing so, we analyse two issues – trade and productivity – and their effect on, inter alia, grower incomes. To achieve the objective, we develop a novel analytical framework, or model. The model combines two long and rich modelling traditions: the partial-equilibrium commodity-specific approach and the computable-general-equilibrium approach. The result is a model that represents the world wool market in detail, tracking the production of greasy wool through five off-farm production stages ending in the production of wool garments.
    Date: 2006
  16. By: Mikic, Mia
    Abstract: The paper addresses preferential trade agreements in Asia and the Pacific with the objective of identifying their characteristics which can be useful in assessing the effects of their implementation. The paper relies mostly on the Asia-Pacific Trade and Investment Agreements Database (APTIAD) in sourcing data and information for analysis. On 26 February 2007 APTIAD was tracking 125 preferential trade agreements one party of which was a member of ESCAP. Eighty seven of those agreements of various types are in force, 62 of them being bilateral agreements, 11 regional trade agreements (RTAs), and 11 country-bloc agreements (the residual is made up of agreements of different scope, i.e. global and country-plurilateral.). The paper utilizes information on membership and coverage of agreements as well as statistical data on goods trade flows in discussing selected important aspects of preferential trade in Asia and the Pacific: (a) the rapid proliferation of preferential trade and revealed preference for bilateral links; (b) strong tolerance for engagement in multiple trade agreements with the same trading partner; and (c) reluctance to commit to full and quick liberalization in merchandise trade, or expose other than industrial goods trade areas to preferential liberalization. The extent of liberalization of trade in agricultural goods through the PTAs in the region is focus of a separate section which also briefly discusses “new” arguments for agricultural trade protectionism in developing countries. Penultimate section discusses the ways in which PTAs could be harnessed to work as complementary with the multilateral trading regime. Some policy recommendations are offered as well.
    Keywords: preferential trade; multilateral liberalization; bilateral trade agreements; regional trade agreements; agriculture trade; Asia; Pacific; APTIAD
    JEL: F53 F15 F14
    Date: 2007–03

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