nep-agr New Economics Papers
on Agricultural Economics
Issue of 2007‒06‒11
seventeen papers chosen by
Angelo Zago
University of Verona

  1. Poverty in Rural Cambodia: The Differentiated Impact of Linkages, Inputs and Access to Land By Engvall, Anders; Sjöberg, Örjan; Sjöholm, Fredrik
  2. FAPRI 2007 U.S. and World Agricultural Outlook By FAPRI Staff
  3. Credit Market Imperfections and the Distribution of Policy Rents: The Common Agricultural Policy in the New EU Member States By Pavel Ciaian; Johan F.M. Swinnen
  4. Technology Supply Chain or Innovation Capacity?: Contrasting Experiences of Promoting Small Scale Irrigation Technology in South Asia By Hall, Andy; Clark, Norman; Naik, Guru
  5. SEED Paper 6: Encouraging Revegetation in Australia with a Groundwater Recharge Credit Scheme By Wendy Proctor; Jeffery D. Connor; John?Ward; Darla Hatton MacDonald
  6. Consumer trust and willingness to pay for certified animal-friendly products By Giuseppe Nocella; Lionel Hubbard; Riccardo Scarpa
  7. Estimating the Value of Water Use Permits: A hedonic approach applied to farmland in the southeastern US By Ragan A. Petrie; Laura O. Taylor
  8. The origins and implications of using innovation systems perspectives in the design and implementation of agricultural research projects: Some personal observations By Hall, Andy
  10. Decomposing Partial Factor Productivity in the Presence of Input-Specific Technical Inefficiency: A Self-Dual Stochastic Production Frontier Approac By Konstantinos Chatzimichael; Vangelis Tzouvelekas
  11. A Multi-Factorial Risk Prioritization Framework for Food-Borne Pathogens By Spencer J. Henson; Julie Caswell; John A. L. Cranfield; Aamir Frazil; Valerie J. Davidson; Sven M. Anders; Claudia Schmidt
  12. CONSUMER PREFERENCES FOR QUALITY CHARACTERISTICS ALONG THE COWPEA VALUE CHAIN IN NIGERIA, GHANA AND MALI By Fulgence Joseph Mishili; Joan Fulton; Mustafa Jamal; J. Lowenberg-DeBoer; Musa Shehu; Saket Kushwaha; Kofi Marfo; Alpha Chergna
  14. Property Rights Imperfections, Asset Allocation, and Welfare: Co-Ownership in Bulgaria By Liesbet Vranken; Karen Macours; Nivelin Noev; Johan Swinnen
  15. The formation of a market mechanism in Tokugawa Japan By Yasuo Takatsuki
  16. Does Gibrat’s law hold amongst dairy farmers in Northern Ireland? By Kostov, Philip; Patton, Myles; Moss, Joan; McErlean, Seamus
  17. Minimum Safety Standard, Consumers' Information, and Competition, The By Stephan Marette

  1. By: Engvall, Anders (Stockholm School of Economics); Sjöberg, Örjan (Stockholm School of Economics); Sjöholm, Fredrik (Research Institute of Industrial Economics (IFN))
    Abstract: Cambodia has been growing rapidly over the past few years but still remains one of the poorest countries in East Asia. In particular, poverty is widespread in rural Cambodia. This paper examines rural poverty in Cambodia with a view to furthering our understanding of the factors that might explain its occurrence and persistence. Setting out from the existing literature, it appears that reduced rural poverty in Cambodia would have to rest on two pillars. Firstly, improvements in agricultural productivity are necessary. Secondly, other income earning opportunities for the rural population have to be established. Using the 2004 Cambodian Socio-Economic Survey, and focusing on the binding constraints to development and poverty alleviation, we add detail to this picture. Our econometric results show that the main causes to poverty differ between landowners and landless and between different regions. Inputs to agriculture are critical to the landowning poor whereas linkages with the rest of the economy, while also essential to landowners, are of vital importance to the landless poor if their lot is to be improved.
    Keywords: Asia; Cambodia; Poverty; Rural; Agriculture; Linkages
    JEL: O12 O13 O18
    Date: 2007–05–26
  2. By: FAPRI Staff
    Date: 2007–05
  3. By: Pavel Ciaian; Johan F.M. Swinnen
    Abstract: This article analyses how credit market imperfections affect the impacts of subsidies by analyzing the effects of agricultural subsidies in the new Eastern Member States of the European Union with a partial equilibrium model which integrates credit and land market imperfections. We show that credit constraints have important implications for the distribution of policy rents. Credit market imperfections may induce very different effects of direct payments and lump-sum transfers.
    Keywords: agricultural policy, imperfect credit markets, land market, policy rents.
    Date: 2007
  4. By: Hall, Andy (UNU-MERIT); Clark, Norman (CGIAR, ACTS and Open University UK); Naik, Guru (Livelihood Solutions)
    Abstract: The most effective approach to agricultural technology promotion and innovation is still a source of considerable debate, and nowhere more so than in the context of agricultural engineering hardware. Contemporary perspective on agricultural innovation stress the importance of institutional change and give emphasis to the need to develop innovation capacity in systems terms rather address limitations of technology transfer mechanisms. This paper illustrates using the case of manual irrigation technology - treadle pumps -- in Bangladesh and India. It identifies 5 elements of this capacity: (i) A sector coordination mechanism; (ii) a developmental rather than technical organising principle for sector development; (iii) habits and practices (institutions) of key organisations; (iv) Interaction as a learning and knowledge transmission mechanism (v) Market demand as key an incentive for innovation; and (vi) Policies and institutional innovations to ensure adequate stakeholder participation. The paper concludes by suggesting that identifying new sources of institutional innovation is the most presses task for initiatives that seek to make more effective use of knowledge and technology in development.
    Keywords: Agricultural Technology, Innovation Systems, Innovation Capacity, Agricultural Research, Poverty Reduction, Small Scale Irrigation, Supply Chains
    JEL: Q16 O31 I38 Q21 O32
    Date: 2007
  5. By: Wendy Proctor; Jeffery D. Connor; John?Ward; Darla Hatton MacDonald (CSIRO Land and Water, Australia)
    Abstract: This paper describes a comprehensive method to design, test and then implement a Payments for Ecosystem Services (PES) framework to combat the environmental consequences of extensive native vegetation clearance in Australia. Clearing of vegetation, primarily due to the expansion of farming areas, has often resulted in regional dryland and irrigation salinity. The market based approach adopted ? a groundwater recharge credit trading scheme ? was designed using empirical data from a social survey and experimental economics. The objective of the trial is to test the cost effectiveness of an incentive based recharge credit trade scheme designed to engage landholders in establishing and managing deep rooted pasture and woody perennials to reduce these adverse salinity impacts. The scheme, based on a voluntary ?cap and trade? approach, allows farmers to meet recharge obligations by land management actions or by trading credits. Assessment of the scheme so far suggests that an incentive for aggregate group outcome achievement included in the design may have motivated higher enrollment rates than would have otherwise resulted. A schedule has been developed relating land management practices and recharge credits. The audited performance based payment system, has provided increased motivation to manage for environmental outcomes compared to the previous policy.
    Keywords: Payments for Ecosystem Services (PES), market based instrument, cap and trade, salinity credit, revegetation, experimental economics
    JEL: Q57
    Date: 2007–05
  6. By: Giuseppe Nocella (University of Bologna); Lionel Hubbard (University of Newcastle); Riccardo Scarpa (University of Waikato)
    Abstract: Increasing animal welfare standards requires changes along the supply chain which involve several stakeholders: scientists, farmers and people involved in transportation and slaughtering. The majority of researchers agree that compliance with these standards increases costs along the livestock value chain, especially for monitoring and certifying animal-friendly products. Knowledge of consumer willingness to pay (WTP) in such a decision context is paramount to understanding the magnitude of market incentives necessary to compensate all involved stakeholders. The market outcome of certification programs is dependent on consumer trust. Particularly, there is a need to understand to what extent consumers believe that stakeholders operating in the animal-friendly supply chain will respect certification standards. We examine these issues using a contingent valuation survey administered in five economically dominant EU countries. The implied WTP estimates are found to be sensitive to robust measures of consumer trust for certified animal-friendly products. Significant differences across countries are discussed.
    Keywords: Animal welfare ; Certification ; Consumer trust ; Contingent Valuation ; Willingness to Pay ; Budget approach ;
    JEL: Q26 H41 C25
    Date: 2007–05–28
  7. By: Ragan A. Petrie; Laura O. Taylor
    Abstract: In the State of Georgia, agricultural irrigation permits in the Flint River Basin had been routinely granted until a moratorium was placed on permit issuance in 1999. This research exploits this policy change within a hedonic pricing framework to estimate the value of irrigation rights in the Southeast US. While the value of irrigation rights has been studied extensively in the western US, differences in property rights and legal regimes, as well as a lack of established water-rights markets in the East, leave us with little information regarding the value of irrigation rights in this setting.
  8. By: Hall, Andy (UNU-MERIT)
    Abstract: In recent years the there has been an increasing recognition of the potential of the innovation systems concept to provide new ways of making more effective use of agricultural research and improve its impact on socially desirable outcomes. This paper documents the experiences of a group of researchers in India who experimented with this framework and tried to operationalise its principles in project design. The paper comments on some of the implications of using this approach and the challenges it presents for implementers of agricultural research projects in developing countries.
    Keywords: Innovation Systems, Agricultural Research, Development Practice, Poverty Reduction, Research Projects, Project Design
    JEL: I38 O2 O31 O32 Q16
    Date: 2007
  9. By: Vanessa E. Daniel (Department of Spatial Economics, Vrije Universiteit); Raymond J.G.M. Florax (Department of Agricultural Economics, Purdue University); Piet Rietveld (Department of Spatial Economics, Vrije Universiteit)
    Abstract: Climate change, the ‘boom and bust’ cycles of rivers, and altered water resource management practice have caused significant changes in the spatial distribution of the risk of flooding. Hedonic pricing studies, predominantly for the US, have assessed the spatial incidence of risk and the associated implicit price of flooding risk. Using these implicit price estimates and their associated standard errors, we perform a meta-analysis and find that houses located in the 100-year floodplain have a –0.3 to –0.8% lower price. The actual occurrence of a flooding event or increased stringency in disclosure rules causes ex ante prices to differ from ex post prices, but these effects are small. The marginal willingness to pay for reduced risk exposure has increased over time, and it is slightly lower for areas with a higher per capita income. We show that obfuscating amenity effects and risk exposure associated with proximity to water causes systematic bias in the implicit price of flooding risk.
    Keywords: Manufactured Housing; valuation, environmental risk, meta-analysis, hedonic pricing
    JEL: D81 Q51 Q54
    Date: 2007
  10. By: Konstantinos Chatzimichael (Dept of Economics, University of Crete, Greece); Vangelis Tzouvelekas (Department of Economics, University of Crete, Greece)
    Abstract: The present paper provides a theoretical framework for the decomposition of partial factor productivity in the presence of input-specific technical inefficiency. Based on Kuroda’s dual approach and using the theoretical foundations developed by Kopp, we decompose the growth rate of partial factor productivity into five sources, namely, changes in input-specific technical efficiency, substitution effect, technical change, the effect of scale economies and a homotheticity and input biased technological effect. The empirical model is based on a generalized self-dual Cobb-Douglas stochastic production frontier and on the methodological approach for measuring orthogonal input-specific technical efficiency suggested by Reinhard, Lovell and Thijssen. The model is applied to a panel data set of 723 cereal farms in Greece observed during the 1994-2003 cropping period obtained from FADN. The empirical results suggest that the labor productivity of cereal farms has been increased by 2.89 per cent annually. Technical change was found to be the main source of labor productivity (70.4%), while changes in technical efficiency also contributed significantly over the period analyzed (34.7%). On the other hand, substitution effect was found to affect negatively the rate of labor productivity (-14.2%).
    Keywords: partial factor productivity, stochastic production frontier, input-specific technical efficiency, Greek cereal farms
    JEL: C23 D24 J24 Q16
    Date: 2007–05–29
  11. By: Spencer J. Henson (Department of Food, Agricultural and Resource Economics, University of Guelph, Ontario Canada); Julie Caswell (Department of Resource Economics, University of Massachusetts, Amherst, MA); John A. L. Cranfield (Department of Food, Agricultural and Resource Economics, University of Guelph, Ontario Canada); Aamir Frazil (Public Health Agency of Canada, Guelph, Ontario Canada); Valerie J. Davidson (School of Engineering, University of Guelph, Ontario Canada); Sven M. Anders (Department of Rural Economy, University of Alberta, Edmonton Canada); Claudia Schmidt (Department of Food, Agricultural and Resource Economics, University of Guelph, Ontario Canada)
    Abstract: To lower the incidence of human food-borne disease, experts and stakeholders have urged the development of a science- and risk-based management system in which food-borne hazards are analyzed and prioritized. A literature review shows that most approaches to risk prioritization developed to date are based on measures of health outcomes and do not systematically account for other factors that may be important to decision making. The Multi-Factorial Risk Prioritization Framework developed here considers four factors that may be important to risk managers: public health, consumer risk perceptions and acceptance, market-level impacts, and social sensitivity. The framework is based on the systematic organization and analysis of data on these multiple factors. The basic building block of the information structure is a three-dimensional cube based on pathogen-food-factor relationships. Each cell of the cube has an information card associated with it and data from the cube can be aggregated along different dimensions. The framework is operationalized in three stages, with each stage adding another dimension to decision-making capacity. The first stage is the information cards themselves that provide systematic information that is not pre-processed or aggregated across factors. The second stage maps the information on the various information cards into cobweb diagrams that create a graphical profile of, for example, a food-pathogen combination with respect to each of the four risk prioritization factors. The third stage is formal multi-criteria decision analysis in which decision makers place explicit values on different criteria in order to develop risk priorities. The process outlined above produces a ‘List A’ of priority food-pathogen combinations according to some aggregate of the four risk prioritization factors. This list is further vetted to produce ‘List B’, which brings in feasibility analysis by ranking those combinations where practical actions that have a significant impact are feasible. Food-pathogen combinations where not enough is known to identify any or few feasible interventions are included in ‘List C’. ‘List C’ highlights areas with significant uncertainty where further research may be needed to enhance the precision of the risk prioritization process. The separation of feasibility and uncertainty issues through the use of ‘Lists A, B, and C’ allows risk managers to focus separately on distinct dimensions of the overall prioritization. The Multi-Factorial Risk Prioritization Framework provides a flexible instrument that compares and contrasts risks along four dimensions. Use of the framework is an iterative process. It can be used to establish priorities across pathogens for a particular food, across foods for a particular pathogen and/or across specific food-pathogen combinations. This report provides a comprehensive conceptual paper that forms the basis for a wider process of consultation and for case studies applying the framework.
    Keywords: risk analysis, risk prioritization, food-borne pathogens, benefits and costs
    JEL: I18 L51 Q00 K32 H11
    Date: 2007–05
  12. By: Fulgence Joseph Mishili; Joan Fulton; Mustafa Jamal; J. Lowenberg-DeBoer (Department of Agricultural Economics, College of Agriculture, Purdue University, USA); Musa Shehu (Department of Agricultural Economics and Extension, Bayero University, Nigeria); Saket Kushwaha (Agricultural Economics and Extension Programme, Abubakar Tafawa Balewa University, Nigeria); Kofi Marfo (Crops Research Institute, Kumasi, Ghana); Alpha Chergna (Institute for Rural Economics, Mali)
    Abstract: The production and trade of cowpea (Vigna Uniculata), called “blackeyed peas” in the US, are a growing business for farmers and merchants serving the rapidly expanding urban areas of West and Central Africa. Cowpea fits the needs of the urban poor. It is an inexpensive source of protein that does not require refrigeration. A better understanding of consumer preferences for cowpea is essential to market development. The main objective of the study was to determine the cowpea grain quality characteristics that command a price premium or provoke a discount in Ghanaian, Malian and Nigerian markets. Specifically, the study looked at the impact of the grain size, texture, color, eye color, and bruchid-damaged grains on cowpea market prices. The data for the study were collected from six markets in Ghana; four markets were in the capital city of Accra and two markets in Kumasi. In Mali, two markets were surveyed, Marché de Sabalibougou and Marché Medine. In Nigeria three markets were surveyed, Iddo in Lagos; Monday, in Maiduguri; and Dawanau in Kano. Hedonic pricing methods provide a statistical estimate of premiums and discounts. The results of the study indicated that cowpea consumers in Ghana, Mali and Nigeria are willing to pay a premium for large cowpea grains. Cowpea consumers discount grains with storage damage from the very first bruchid hole. The impact of price on other cowpea quality characteristics such as skin color and texture, and eye color varies locally. Implications for development of the cowpea value chain include: 1) breeders and cowpea production researchers should identify cost-effective ways to increase cowpea grain size because larger grain size is almost universally preferred, and 2) entomologists and storage experts should develop and transfer improved storage technologies to reduce damage discounts, and 3) serving local markets requires a portfolio of grain skin color, eye color and skin texture combinations.
    Keywords: Cowpeas market chains, consumer preference, hedonic price analysis
    JEL: D12 Q13
    Date: 2007
  13. By: Brigitte S. Waldorf (Department of Agricultural Economics, College of Agriculture, Purdue University)
    Abstract: This paper— part of a comprehensive project on industry clusters and rural competitiveness— explores the role of industrial specialization and rurality on economic performance for counties in the continental United States. Regression models are estimated that evaluate the impact of industry cluster-specific employment shares on per capita income growth overall, as well as in a sequence of different contextual settings. Overall, the results suggest that economic disparities across U.S. counties will diminish. The results also suggest that economic specialization “per se” is not a guarantee for economic growth. Instead, economic growth very much depends on the type of specialization and the contextual setting, with distinct differences between, for example, the metropolitan sphere, the rural sphere, and the rural-metro interface.
    Keywords: Manufactured Housing;Economic Growth, Industry Clusters, Rural America
    JEL: O18 O51 R11
    Date: 2007
  14. By: Liesbet Vranken; Karen Macours; Nivelin Noev; Johan Swinnen
    Abstract: This paper analyzes how imperfections of property rights affect allocation of assets and welfare, using micro-survey data from Bulgaria. Co-ownership of assets is widespread in many countries due to inheritance. Central and Eastern Europe offers an interesting natural experiment to assess the effects of such rights imperfections because of the asset restitution process in the 1990s. Bulgaria is particularly interesting because of the prominence of the co-ownership problem (about half of all land plots are co-owned), because of the strong fragmentation of land, and because of legislation providing an instrument to separate out chosen (endogenous) versus forced (exogenous) forms of co-ownership. We find that land in co-ownership is much more likely to be used by less efficient farm organizations or to be left abandoned, and that it leads to significant welfare losses.
    Date: 2007
  15. By: Yasuo Takatsuki (Graduate School of Economics, Tokyo University)
    Abstract: This paper examines the efficiency of the Dojima Rice Market established in 1730 in Osaka, and closed in 1869 due to the collapse of Tokugawa Shogunate. It had already been shown that there existed the price mechanism in Dojima. However, the most significant question: Whether the world first commodity futures market was efficient or not, remains to be unanswered. Before applying the empirical analyses, this paper first introduces the daily price index constructed from the original historical document, "Yorozu Souba Nikki (Daily memorandum of commodity price indices)," written by the contemporary rice merchant who dealt in the rice. From this memorandum, we can construct the daily price index both in the futures and the spot market during the period from 1798 to 1856. Based on this price index, the test of unbiasedness hypothesis and the classic measure of market efficiency; "weak-form efficiency" were applied to Dojima Rice Market, and it is shown that there existed these types of efficiency.
    JEL: G14 L11 N25
    Date: 2007–06
  16. By: Kostov, Philip; Patton, Myles; Moss, Joan; McErlean, Seamus
    Abstract: This paper tests whether the Law of Proportionate Effects (Gibrat, 1931), which states that farms grow at a rate that is independent of their size, holds for the dairy farms in Northern Ireland. Previous studies have tended to concentrate on testing whether the law holds for all farms. The methodology used in this study permits investigation of whether the law holds for some farms or all farms according to their size. The approach used avoids the subjective splitting of samples, which tends to bias results. Additionally we control for the possible sample selection bias. The findings show that the Gibrat law does hold except in the case of small farms. This is in accordance with previous findings that Gibrat’s law tends to hold when only larger farms are considered, but tends to fail when smaller farms are included in the analysis. Implications and further extensions, as well as some alternatives to the proposed methodology are discussed.
    Keywords: law; quantile regression; Integrated conditional moments test
    JEL: O49 C14 C12
    Date: 2006–10–02
  17. By: Stephan Marette (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI))
    Abstract: This paper explores the effects of a standard influencing care choice. Firm(s) may increase the probability of offering safe products by incurring a cost. Under duopoly, they compete either in prices or in quantities. Under perfect information about safety for consumers, the selected standard that corrects a safety underinvestment is always compatible with competition. Safety overinvestment only emerges under competition in quantities and relatively low values of the cost. Under imperfect information about safety for consumers, the standard leads to a monopoly situation. However, for relatively large values of the cost, a standard cannot impede the market failure coming from the lack of information.
    Keywords: information, market structure, safety, standard. JEL Classification: C L1, L5
    Date: 2007–02

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