New Economics Papers
on Agricultural Economics
Issue of 2007‒05‒19
eleven papers chosen by

  1. Diversification and agrarian change under environmental constraints in rural China: Evidence from a poor township of Beijing municipality By Sylvie Demurger; Martin Fournier; Yang Weiyong
  2. Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets By Simla Tokgoz; Amani Elobeid; Jacinto F. Fabiosa; Dermot J. Hayes; Bruce A. Babcock; Tun-Hsiang (Edward) Yu; Fengxia Dong; Chad E. Hart; John C. Beghin
  3. Land Cover in a Managed Forest Ecosystem: Mexican Shade Coffee By Blackman, Allen; Albers, Heidi J.; Ávalos Sartorio, Beatriz; Crooks, Lisa
  4. Towards Reform of Land Acquisition Framework in India By Morris Sebastian; Pandey Ajay
  5. Decentralization and Environmental Quality: An International Analysis of Water Pollution By Hilary Sigman
  6. Forest management policies and resource balance in China: an assessment of the current situation By Sylvie Demurger; Hou Yuanzhao; Yang Weiyong
  7. Growth and Direction of the Biodiesel Industry in the United States, The By Nick D. Paulson; Roger G. Ginder
  8. Is a Voluntary Approach an Effective Environmental Policy Instrument? A Case for Environmental Management Systems By Arimura, Toshi; Hibiki, Akira; Katayama, Hajime
  9. Technology integration and seed market organization: The case of GM Cotton diffusion in Jiangsu Province (China) By Michel Fok; Naiyin Xu
  10. A Game Theoretical Model of Land Contract Choice By Américo M. S. Carvalho Mendes
  11. Should Credit be a Right ? By Marek Hudon

  1. By: Sylvie Demurger (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Martin Fournier (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Yang Weiyong (University of International Business and Economics - [University of International Business and Economics])
    Abstract: This article illustrates the impact of changes related to market reforms and environmental policies on the economic structure in rural China by providing a comparative analysis of several villages in a poor township in Beijing municipality. Two main concomitant phenomena are affecting agricultural and non-agricultural choices in the studied area. First, the introduction of market mechanisms is encouraging local population to engage in new activities that are closer to local comparative advantages. Second, rural households are facing new constraints in the form of environmental protection measures, which have weakened traditional insurance channels provided by forest resources and cattle stock. Drawing on household-level survey data and interviews with village heads conducted in ten villages of Labagoumen township in December 2003, this article analyzes households decisions in response to market reforms and environmental constraints. We find large disparities both between villages and households in the diversification process and discuss the reasons of observed inertia in the region, most households still heavily relying on corn production.
    Keywords: agrarian change ; Environmental protection ; Income-source diversification ; rural China
    Date: 2007–05–07
  2. By: Simla Tokgoz (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Amani Elobeid (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Dermot J. Hayes (Center for Agricultural and Rural Development (CARD)); Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Tun-Hsiang (Edward) Yu; Fengxia Dong (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Chad E. Hart (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); John C. Beghin (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI))
    Abstract: Projections of U.S. ethanol production and its impacts on planted acreage, crop prices, livestock production and prices, trade, and retail food costs are presented under the assumption that current tax credits and trade policies are maintained. The projections were made using a multi-product, multi-country deterministic partial equilibrium model. The impacts of higher oil prices, a drought combined with an ethanol mandate, and removal of land from the Conservation Reserve Program (CRP) relative to baseline projections are also presented. The results indicate that expanded U.S. ethanol production will cause long-run crop prices to increase. In response to higher feed costs, livestock farmgate prices will increase enough to cover the feed cost increases. Retail meat, egg, and dairy prices will also increase. If oil prices are permanently $10-per-barrel higher than assumed in the baseline projections, U.S. ethanol will expand significantly. The magnitude of the expansion will depend on the future makeup of the U.S. automobile fleet. If sufficient demand for E-85 from flex-fuel vehicles is available, corn-based ethanol production is projected to increase to over 30 billion gallons per year with the higher oil prices. The direct effect of higher feed costs is that U.S. food prices would increase by a minimum of 1.1% over baseline levels. Results of a model of a 1988-type drought combined with a large mandate for continued ethanol production show sharply higher crop prices, a drop in livestock production, and higher food prices. Corn exports would drop significantly, and feed costs would rise. Wheat feed use would rise sharply. Taking additional land out of the CRP would lower crop prices in the short run. But because long-run corn prices are determined by ethanol prices and not by corn acreage, the long-run impacts on commodity prices and food prices of a smaller CRP are modest. Cellulosic ethanol from switchgrass and biodiesel from soybeans do not become economically viable in the Corn Belt under any of the scenarios. This is so because high energy costs that increase the prices of biodiesel and switchgrass ethanol also increase the price of corn-based ethanol. So long as producers can choose between soybeans for biodiesel, switchgrass for ethanol, and corn for ethanol, they will choose to grow corn. Cellulosic ethanol from corn stover does not enter into any scenario because of the high cost of collecting and transporting corn stover over the large distances required to supply a commercial-sized ethanol facility.
    Keywords: biofuels, corn acreage, crop prices, ethanol production, food prices.
    Date: 2007–05
  3. By: Blackman, Allen (Resources for the Future); Albers, Heidi J.; Ávalos Sartorio, Beatriz; Crooks, Lisa
    Abstract: Managed forest ecosystems—agroforestry systems in which crops such as coffee and bananas are planted side-by-side with woody perennials—are being touted as a means of safeguarding forests along with the ecological services they provide. Yet we know little about the determinants of land cover in such systems, information needed to design effective forest conservation policies. This paper presents a spatial regression analysis of land cover in a managed forest ecosystem—a shade coffee region of coastal Mexico. Using high-resolution land cover data derived from aerial photographs along with data on the geophysical and institutional characteristics of the study area, we find that plots in close proximity to urban centers are less likely to be cleared, all other things equal. This result contrasts sharply with the literature on natural forests. In addition, we find that membership in coffee-marketing cooperatives, farm size, and certain soil types are associated with forest cover, while proximity to small town centers is associated with forest clearing.
    Keywords: deforestation, managed forest ecosystem, agroforestry, shade-grown coffee, Mexico, spatial econometrics, land cover
    JEL: O13 Q15 Q23
    Date: 2007–05–16
  4. By: Morris Sebastian; Pandey Ajay
    Abstract: We bring out the fundamental and more important problems with the current framework of land acquisition in India, regulations on land and the functioning of land markets. We argue that reform is overdue and the current framework would be unsustainable in a democracy that is India. Current land prices are highly distorted owing largely to regulatory constraints and the process of takings. Land acquisition more than any other factor is the most important constraint on development and especially in infrastructure development. We bring out the core elements of the reform – the need to define “public purpose” ex-ante for compulsory acquisition of land, the measures that would allow the market price of land to play its correct role, and the approach to valuation. We also argue for an independent valuer when compulsory taking is involved and methods of valuation to ensure that the land owner including the farmer gets the correct value for this land in both compulsory acquisition and in voluntary sale. We also argue the need for a parallel non-compulsory framework for acquisition and develop the key elements of the same. We also bring out alternatives to physical acquisition of land especially in the context of infrastructure development in central places.
    Keywords: Land-Acquisition, Eminent-Domain, Public Purpose, Takings, Rehabilitation, Law, Valuation, Central Places, Land-Use, Regulation, India
    JEL: K2
    Date: 2007–05–08
  5. By: Hilary Sigman
    Abstract: Many arguments about decentralization in public goods provision have testable implications for the relationship between decentralization and the level and spatial variability of public goods. This paper explores the empirical relationship between decentralization and environmental public good, water quality in rivers at monitoring stations around the world. It examines pollution levels and spatial variability of pollution within a country for both a local and a regional pollutant. The results suggest higher pollution levels with greater decentralization when fixed effects are included; the evidence is strongest for the regional pollutant, where it might result from interjurisdictional free riding. Federalism is associated with greater spatial variability in pollution within a country, consistent with the traditional view that decentralization allows policies more tailored to local conditions.
    JEL: H77 Q5
    Date: 2007–05
  6. By: Sylvie Demurger (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Hou Yuanzhao (Chinese Academy of Forestry - [Chinese Academy of Forestry]); Yang Weiyong (University of International Business and Economics - [University of International Business and Economics])
    Abstract: Using the latest forest inventory, this paper provides a comprehensive analysis of China's forest sector by focusing on new forest trends, forest policy changes and challenges to achieve a sustainable forest management. We analyze the dynamics of forest resources and provide an impact assessment of forest policies on China's forestry development over the last decades. Moreover, the analysis of the forest market highlights substantial disequilibria marked by a limited domestic supply potential and a growing demand for forest products satisfied by increasing imports. Internal and external solutions are explored and their implications for China and supplying countries are assessed.
    Keywords: China ; Forest management ; Forest resources
    Date: 2007–05–07
  7. By: Nick D. Paulson; Roger G. Ginder
    Abstract: The biodiesel industry in the United States has realized significant growth over the past decade through large increases in annual production and production capacity and a transition from smaller batch plants to larger-scale continuous producers. The larger, continuous-flow plants provide operating cost advantages over the smaller batch plants through their ability to capture co-products and reuse certain components in the production process. This paper uses a simple capital budgeting model developed by the authors along with production data supplied by industry sources to estimate production costs, return-on-investment levels, and break-even conditions for two common plant sizes (30 and 60 million gallon annual capacities) over a range of biodiesel and feedstock price levels. The analysis shows that the larger plant realizes returns to scale in both labor and capital costs, enabling the larger plant to pay up to $0.015 more per pound for the feedstock to achieve equivalent return levels as the smaller plant under the same conditions. The paper contributes to the growing literature on the biodiesel industry by using the most current conversion rates for the production technology and current price levels to estimate biodiesel production costs and potential plant performance, providing a useful follow-up to previous studies.
    Keywords: biodiesel, biofuels, feedstock, production costs, return on investment.
    Date: 2007–05
  8. By: Arimura, Toshi (Resources for the Future); Hibiki, Akira; Katayama, Hajime
    Abstract: Using Japanese facility-level data from an Organisation for Economic Co-operation and Development survey, we estimate the effects of implementation of ISO14001 and publication of environmental reports on the facilities’ environmental performance. While most previous studies focused on an index of emissions toxicity, this study examines three areas of impacts, none of which have been explored in the literature: natural resource use, solid waste generation, and wastewater effluent. The study is also unique in that the effectiveness of ISO14001 is considered in relation to environmental regulations. Our findings are summarized as follows. First, both ISO14001 and report publication help reduce all three impacts; the former appears more effective in all areas except wastewater. Second, environmental regulations do not weaken the effect of ISO14001. Third, assistance programs offered by local governments—a voluntary approach—promote facilities’ adoption of ISO14001. These findings suggest that governments can use command-and-control and voluntary approaches concurrently.
    Keywords: environmental management systems, ISO14001, environmental reports, voluntary actions, governmental assistance programs, environmental impacts, discrete choice model, endogeneity, GHK simulator
    JEL: C35 Q53 Q58
    Date: 2007–05–16
  9. By: Michel Fok (UPR10 - Systèmes cotonniers en petits paysannats - [CIRAD]); Naiyin Xu (RIIC - Research Institute of Industrial Crops - [Jiangsu Academy of Agricultural Sciences])
    Abstract: Plusieurs articles ont contribué à faire passer l'idée selon laquelle les avantages spécifiques du coton-Bt sont responsables du succès de la diffusion du coton génétiquement modifié en Chine. L'efficience du coton-Bt varie cependant entre les régions cotonnières du pays. Dans la Province du Jiangsu, le long de la Vallée du Fleuve Yangtze, il n'y a pas d'augementation de rendement, la réduction de l'utilisation des insecticides est faible et il n'y a pas de gain de rendement associé spécifiquement à l'utilisation du coton-Bt. <br />L'utilisation du coton-Bt est néanmoins quasi générale. Une approche plus globale, en ne se focalisant pas seulement sur les effets spécifiques du coton-Bt, permet de comprendre ce paradoxe apparent. Dans la Province du Jiangsu, la diffusion du coton-Bt a bénéficié de son intégration dans les cultivars hybrides qui sont parfaitement adaptés à la technique de transplantation. Ce cas chinois indique que l'évaluation de l'utilisation du coton-Bt dans les autres pays devrait considérer le degré de compatibilité avec les techniques existantes de production.<br />En Chine, la commercialisation du coton-Bt a induit la modernisation du marché des semences . Les paysans ont d'abord bénéficié de ce processus avant de pâtir des effets négatifs des stratégies de commercialisation des semences au prix élevé. Si le coton-Bt doit donner plus aux paysans qu'il ne leur retire, une certaine regulation du marché des semences est souhaitable.
    Keywords: Agriculture, Biotechnologies, Industrie des semences, variétés, concurrence, marketing des semences
    Date: 2007–05–06
  10. By: Américo M. S. Carvalho Mendes (Faculdade de Economia e Gestão, Universidade Católica Portuguesa (Porto))
    Abstract: In most of the land tenancy literature the type of contract is exogenous. Also even though these contracts vary a lot among farms, between regions and over time, the theoretical literature has not always acknowledged this idiosyncrasy. Building on the strategic bargaining theory initiated by Rubinstein, this model not only makes the type of contract endogenous, but also provides the surplus sharing rules and the conditions giving rise to each type of contract, showing how the type and terms of the contract are tailored to fit the characteristics of the parties and their economic environment. Pairwise bargaining is embedded into a market context by putting “competitive pressure” on the players through the opportunity they have to break up bargaining and look for alternative partners. Because of this threat of opting out, the outcome of the bargaining process depends not only on the characteristics of the players, but also on events outside their match and the information they have about them. The model departs from price-taking assumptions. Type and terms of the contract result from negotiation and are shaped by the “relative bargaining powers” of the players whose relevant components are identified in a precise way in the model.
    Keywords: land tenancy, sharecropping, land contract choice, game theory
    JEL: C7 D8
    Date: 2007–04
  11. By: Marek Hudon (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and Harvard University, Boston.)
    Abstract: Access to credit is today a main constrain for many entrepreneurs. This article studies the question of a right to credit. If access to financial services is so crucial and too many hurdles stop the very poor citizens to benefit from the opportunities the markets can offer, one can consider, as Nobel Prize Laureate M. Yunus, that a specific right should be established. Nevertheless, the use of credit is still controversial and does not always lead to economic development. Hence, rather than a loose right to credit, we argue for a right in a goal-right system. This system could take into account the important elements necessary to the positive impact of credit.
    Keywords: human right, credit, justice, microfinance
    JEL: B0 O16 Q14
    Date: 2007–05

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