New Economics Papers
on Agricultural Economics
Issue of 2007‒06‒23
nine papers chosen by

  1. Assessing the Response of Farm Households to Dairy Policy Reform in Israel By Kimhi, Ayal; Rubin, Ofir
  2. Economics of traceability for mitigation of food recall costs By Resende-Filho, Moises; Buhr, Brian
  3. The Land Use in Rural New Zealand Model Version 1 (LURNZv1: Model Description) By Joanna Hendy; Suzi Kerr; Troy Baisden
  4. Production Efficiency and Total Factor Productivity Growth in Turkish State Agricultural Enterprises By Ertugrul Deliktas; Mehmet Candemir
  5. Addressing the Food Aid Curse By Max Blouin; Stéphane Pallage
  6. The Evolving Food Chain: Competitive Effects of Wal-Marts Entry into the Supermarket Industry By Emek Basker; Michael Noel
  7. Are Standards Always Protectionist? By Marette, Stéphan; Beghin, John C.
  8. Vertical coordination, rent distribution, and development By Johan F.M. Swinnen; Anneleen Vandeplas
  9. Accessibility and Environmental Quality: Inequality in the Paris Housing Market By André de Palma; Kiarash Motamedi; Nathalie Picard; Paul Waddell

  1. By: Kimhi, Ayal; Rubin, Ofir
    Abstract: After nearly fifty years of stability and stagnation of dairy market regulations in Israel, a dramatic policy reform has been enacted in 1999. The reform enabled farm households, for the first time, to trade production quotas. In addition, the reform signaled to farmers that milk prices will gradually go down in real terms, and therefore only producers who expand and become more efficient will prevail. The reform allowed for generous financial support for investment in expansion, but also required the adoption of environmental regulations which could be costly to many farm families. This paper uses data from a census of small family-operated dairy enterprises that was conducted in 2001, in order to analyze the response of farm households to the reform. The results imply that the reform was particularly attractive for already strong producers. Weaker producers are less attracted by the reform and will likely fade away by default in the long run. Another finding is that intergenerational succession is an important element of decision making of milk producers. Hence, the response of farm households to changes in the economic environment cannot be disentangled from the occupational decisions of their offspring. These findings imply that the desired structural change in the family-farm milk production sector will take much longer than expected, essentially as long as the current generation of producers is around. This requires, perhaps, an extension of the reform period or a change in incentives in favor of the smaller and older producers.
    Keywords: milk policy reform; technology adoption; intergenerational succession.
    Date: 2007–06–13
  2. By: Resende-Filho, Moises; Buhr, Brian
    Abstract: Traceability of food products and particularly meats is increasingly advocated as a means to provide consumer confidence in credence attributes (e.g., range fed, organic, country of origin) as well as for improved quality control. In the case of food safety, where there are failures in testing and there is not likely to be zero failure rates, traceability may also improve the overall process efficiency and cost effectiveness of recalls. This study relies on case observations to develop a general conceptual model of traceability for food product recall. This conceptual model incorporates quality control in a vertical food supply chain and identifies key factors (e.g. the nature of contamination event and shelf-life of the product) that affect the cost-benefit of traceability in a risk context. Our conceptual model is adapted and parameterized for the context of a simulated recall due to E. coli in ground beef. The results of our simulations indicate that traceability might be valuable in terms of its return in saved recall costs. In addition, the effect of improved quality control measures on the traceability value is simulated and discussed. The simulated results indicate that improved quality controls and traceability seem to be substitutes. Despite this, we argue that traceability might improve information as to the source of quality control failure and therefore might play a complimentary role in achieving quality control improvements.
    Keywords: Food safety; quality control; recall; risk assessment; risk modeling; traceability
    JEL: L66 Q12 M11
    Date: 2007–06–19
  3. By: Joanna Hendy (Motu Economic and Public Policy Research); Suzi Kerr (Motu Economic and Public Policy Research); Troy Baisden (GNS Science)
    Abstract: This paper documents the first version of the Land Use in Rural New Zealand Model (LURNZv1). It describes the overall modelling approach, the database underlying the model, and the construction of each module within the model. The model is econometrically estimated from national time series data and spatially extrapolated using economic and geophysical variables. It is primarily a simulation model but is also set up to produce predictions based on future price scenarios. The model output includes projections of four types of rural land use under different scenarios and 25 ha grid maps of where land use, and changes in land use, are likely to occur.
    Keywords: simulation model, land use, dairy, sheep, beef, forestry, reverting indigenous forest
    JEL: C88 Q25 Q28 R14
    Date: 2007–06
  4. By: Ertugrul Deliktas (Department of Economics, Ege University); Mehmet Candemir (Odemis Vocational Studies, Ege University)
    Abstract: This paper examines the productivity performance of Turkish State Agricultural Enterprises using Data Envelopment Analysis approach. Regarding this, the paper mainly focuses on production efficiency or technical efficiency and total factor productivity growth of the enterprises over the 1999-2003 period. In the second stage of the study, we use a regression analysis to estimate the affects of potential factors influencing the production efficiency of the enterprises. The empirical results indicate that during this period, the agricultural enterprises experienced technical regress, on average, while the technical efficiency improved 1.5 percent. On the other hand,, the total factor productivity decreased 1.2 percent due to 2.7 percent technical regress over the study period. Also, the results of regression estimation indicate that irrigation rate, tractor as an indicator of existing technology, and the geographic regions of enterprises are important determinants of production efficiency.
    Keywords: State agricultural enterprises in Turkey, total factor productivity growth, data envelopment analysis
    JEL: C43 D24 Q12
    Date: 2007–04
  5. By: Max Blouin; Stéphane Pallage
    Abstract: In this paper, we build a model of agrarian economies in which a kleptocratic government taxes farmers to maximize its life-time utility. The model is a dynamic general equilibrium model in which the subsistence of farmers requires a minimum level of consumption. We analyze the effect that a benevolent food aid agency can have in such an environment. If it expects the food aid agency to intervene, the kleptocratic government will starve its farmers, in a clear case of the Samaritan's dilemma. We show that the likelihood of man-made famines, however, can be greatly reduced if the food aid agency intervenes with probability slightly lower than one. No aid agency devoted to saving lives, however, can commit to such policy. We propose a solution to this food aid curse.
    Keywords: Food aid, famines, commitment
    JEL: F35 D72 C72
    Date: 2007
  6. By: Emek Basker (Department of Economics, University of Missouri-Columbia); Michael Noel
    Abstract: We analyze the effect of Wal-Marts entry into the grocery market using a unique store-level price panel data set. We use OLS and two IV specifications to estimate the effect of Wal-Marts entry on competitors prices of 24 grocery items across several categories. Wal-Marts price advantage over competitors for these products averages approximately 10%. On average, competitors response to Wal-Marts entry is a price reduction of 11.2%, mostly due to smaller-scale competitors: the response of the big three supermarket chains (Albertsons, Safeway, and Kroger) is less than half that size. We confirm our results using a falsification exercises, in which we test for Wal-Marts effect on prices of services that it does not provide, such as movie tickets and dry cleaning services.
    Keywords: Wal-Mart, Retail Prices, Supermarkets, Price Competition
    JEL: L11 L13 L81
    Date: 2007–06–15
  7. By: Marette, Stéphan; Beghin, John C.
    Abstract: We analyze the effects of a domestic standard that reduces an externality associated with the consumption of the good targeted by the standard, using a model in which foreign and domestic producers compete in the domestic good market. Producers can reduce expected damage associated with the externality by incurring a cost that varies by source of origin. Despite potential protectionism, the standard is useful in correcting the consumption externality in the domestic country. Protectionism occurs when the welfare-maximizing domestic standard is higher than the international standard maximizing welfare inclusive of foreign profits. The standard is actually anti-protectionist when foreign producers are much more efficient at addressing the externality than are domestic producers. Possible exclusion of domestic or foreign producers arises with large standards, which may alter the classification of a standard as protectionist or non-protectionist. The paper provides important implications for the estimation and use of tariff equivalents of nontariff barriers.
    Keywords: externality, nontariff barriers, protectionism, safety, standard, tariff equivalent.
    Date: 2007–06–14
  8. By: Johan F.M. Swinnen; Anneleen Vandeplas
    Abstract: Vertical coordination has grown strongly in global supply chains. Local suppliers in developing countries engage in complex contracting with companies selling into high-income markets - either domestically or internationally. These contracts not only specify conditions for delivery and production processes, but also include the provision of inputs, technology, management advice etc. This paper analyzes how weak contract enforcement institutions and imperfect factor markets are affecting vertical coordination in development, and what the implications are for income creation and rent distribution.
    Keywords: Vertical coordination, contract enforcement, development, rent distribution
    JEL: C78 D23 O12 Q12
    Date: 2007
  9. By: André de Palma (University of Cergy-Pontoise and Ecole Nationale de Ponts et Chaussées, France); Kiarash Motamedi (University of Cergy-Pontoise, France); Nathalie Picard (University of Cergy-Pontoise, France); Paul Waddell (University of Washington, USA)
    Abstract: In this paper we examine empirically the market for local amenities in the Paris metropolitan region. We find first that there is considerable inequality in the spatial distribution of these local amenities, including accessibility, environmental and social indicators. We use a spatial representation and Lorenz curves to examine the degree of inequality in these amenities, and this provides evidence that some amenities (or disamenities) are much more inequitably distributed than others. The most extremely unequally distributed amenities are noise (due to its concentration near airports), “Redevelopment Areas”, presence of water (lakes and rivers) and forests, and presence of train and subway stations. Some indicators, such as the “Poulit accessibility” measure, were by contrast remarkably constant over the region. We recognize that local amenities should be capitalized into the housing market, and explore the willingness to pay of households for these amenities within the Paris region using alternative specifications of a location choice model. One of the core questions we examine is the spatial scale of the amenity effects and how this is captured in a location choice context. By estimating models at both a commune and at a grid cell level, we obtain new insights into how households in the Paris region trade off amenities against each other and against housing cost. We find that the residential location choice model fits the data moderately better at the smaller scale of the grid cell compared to the commune.
    Keywords: Inequality, efficiency, local public goods, residential location, integrated model, transportation modelling, Paris area.
    JEL: R23 R41
    Date: 2007

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