nep-agr New Economics Papers
on Agricultural Economics
Issue of 2007‒08‒14
seventeen papers chosen by
Angelo Zago
University of Verona

  1. Assessing the economic impacts of climate change on agriculture in Egypt : a ricardian approach By Eid, Helmy M.; El-Marsafawy, Samia M.; Ouda, Samiha A.
  2. Assessment of the economic impacts of climate change on agriculture in Zimbabwe : a ricardian approach By Mano, Reneth; Nhemachena, Charles
  3. Yield impact of irrigation management transfer : story from the Philippines By Bandyopadhyay, Sushenjit; Shyamsundar, Priya; Xie, Mei
  4. Actual crop water use in project countries : a synthesis at the regional level By Wahaj, Robina; Maraux, Florent; Munoz, Giovanni
  6. The impact of climate change on African agriculture : a ricardian approach By Maddison, David; Manley, Marita; Kurukulasuriya, Pradeep
  7. Organic food marketing and distribution in the European Union By Maurizio Canavari; Roberta Centonze; Gianluca Nigro
  8. The impacts of climate change on regional water resources and agriculture in Africa By Strzepek, Kenneth; McCluskey, Alyssa
  9. Crop selection : adapting to climage change in Africa By Kurukulasuriya, Pradeep; Mendelsohn, Robert
  10. The perception of and adaptation to climate change in Africa By Maddison, David
  11. An empirical economic assessment of impacts of climate change on agriculture in Zambia By Jain, Suman
  12. Off- and On-Farm Labour Participation in Italian Farm Households By Alessandro Corsi; Cristina Salvioni
  13. Sensitivity of cropping patterns in Africa to transient climate change By Lotsch, Alexander
  14. A ricardian analysis of the impact of climate change on African cropland By Kurukulasuriya, Pradeep; Mendelsohn, Robert
  15. Comparing the Travel Cost Method and the Contingent Valuation Method – An application of Convergent Validity Theory to the Recreational Value of Irish Forests By Karen Mayor; Susan Scott; Richard S.J. Tol
  16. Toward Farsightedly Stable International Environmental Agreements By Dritan Osmani; Richard S.J. Tol
  17. Fair Trade By Martin Richardson; Frank Staehler

  1. By: Eid, Helmy M.; El-Marsafawy, Samia M.; Ouda, Samiha A.
    Abstract: This study employed the Ricardian approach to measure the economic impacts of climate change on farm net revenue in Egypt. Farm net revenue were regressed against climate, soil, socioeconomic and hydrological variables to determine which factors influence the variability of farm net revenues. 900 households from 20 governorates were interviewed. The standard Ricardian model was applied, in addition to three other models, each representing an adaptation option that could be used to reduce the harmful effects of temperature stress. A further adaptation strategy was tested: raising livestock on the farm to cope with the harmful effects of climate change. Besides this, the effects of two climate change scenarios (using MAGICC/SCENGEN and GCMs-General Circulation Models) were considered. The results from the two climate change scenarios showed that high temperatures will constrain agricultural production in Egypt. Irrigation and technology are therefore the recommended adaptation options. However, warming may also affect water resources and that would pose another problem for agricultural production. A policy should be developed to cope with the adverse effects of climate change on agriculture. It should focus on three areas: crop management, water management, and land management. The favored option for adapting to increased temperatures is irrigation. Some farmers adjust their crop sowing dates to avoid the expected high temperatures. To adjust to shortages in rainfall, farmers use crop varieties with high water use efficiency and early maturing varieties.
    Keywords: Climate Change,Environmental Economics & Policies,Crops & Crop Management Systems,Rural Development Knowledge & Information Systems,Water Supply a nd Sanitation Governance and Institutions
    Date: 2007–07–01
  2. By: Mano, Reneth; Nhemachena, Charles
    Abstract: This study uses the Ricardian approach to examine the economic impact of climate change on agriculture in Zimbabwe. Net farm revenue is regressed against various climate, soil, hydrological and socio-economic variables to help determine the factors that influence variability in net farm revenues. The study is based on data from a survey of 700 smallholder farming households interviewed across the country. The empirical results show that climatic variables (temperature and precipitation) have significant effects on net farm revenues in Zimbabwe. In addition to the analysis of all farms, the study also analyzes the effects on dryland farms and farms with irrigation. The analysis indicates that net farm revenues are affected negatively by increases in temperature and positively by increases in precipitation. The results from sensitivity analysis suggest that agricultural production in Zimbabwe ' s smallholder farming system is significantly constrained by climatic factors (high temperature and low rainfall). The elasticity results show that the changes in net revenue are high for dryland farming compared to farms with irrigation. The results show that farms with irrigation are more resistant to changes in climate, indicating that irrigation is an important adaptation option to help reduce the impact of further changes in climate. An overview of farmer adaptation to changing climate indicates that farmers are already using some adaptation strategies-such as dry and early planting, growing drought resistant crops, changing planting dates, and using irrigation-to cushion themselves against further anticipated adverse climatic conditions. An important policy message from the empirical findings is that there is a need to provide adequate extension information services to ensure that farmers receive up-to-date information about rainfall patterns in the forthcoming season so that they make well-informed decisions on their planting dates. Policies that increase farmer training and access to credit and aid facilities and help farmers acquire livestock and other important farm assets can help improve net farm performance. Ensuring the availability and accessibility of fertilizers and crop seeds before the onset of the next cropping season can also significantly improve net farm performance across households.
    Keywords: Climate Change,Environmental Economics & Policies,Crops & Crop Management Systems,Agriculture & Farming Systems,Rural Development Knowledge & Information Systems
    Date: 2007–07–01
  3. By: Bandyopadhyay, Sushenjit; Shyamsundar, Priya; Xie, Mei
    Abstract: Irrigation management transfer is an important strategy among donors and governments to strengthen farmer control over water and irrigation infrastructure. This study seeks to understand whether irrigation management transfer is meeting the promise of its commitments. The authors use data from a survey of 68 irrigator associations and 1,020 farm households in the Philippines to estimate the impact of irrigation management transfer on irrigation association performance and on rice yields. They also estimate a stochastic frontier production function to assess contributions to technical efficiency. There are three main results. First, the presence of irrigation management transfer is associated with an increase in maintenance activities undertaken by irrigation associations. Second, by increasing local control over water delivery, the presence of irrigation management transfer is associated with a 2-6 percent increase in farm yields. Rice production in irrigation management transfer areas is greater even after controlling for various differences among rice farmers in transfer and non-transfer areas. Third, irrigation management transfer is, at a minimum, poverty-neutral, and may even give the asset-poor a small boost in terms of rice yields. The authors speculate that this boost may be a result of increased timeliness of water delivery and better resolution of conflicts related to illegal use.
    Keywords: Irrigation and Drainage,Water Supply and Systems,Agricultural Irrigation and Drainage,Water Use,Rural Poverty Reduction
    Date: 2007–08–01
  4. By: Wahaj, Robina; Maraux, Florent; Munoz, Giovanni
    Abstract: This report aims to synthesize the results of a crop water use study conducted by country teams of the GEF/World Bank project, Regional Climate, Water, and Agriculture: Impacts on and Adaptation of Agro-ecological Systems in Africa. It also presents the results of the second phase of the study based on climate change scenarios, conducted by the South Africa country team. The actual evapotranspiration of five commonly grown crops-maize, millet, sorghum, groundnuts, and beans-in t wo selected districts were analyzed by six country teams. In addition, two country teams also analyzed other crops grown in the districts. The regional analysis shows that the actual yield of the different crops-specifically of maize and groundnuts-improves with an increase in actual evapotranspiration, although the gap remains wide between actual and potential yield and actual and maximum evapotranspiration, especially for the rainfed crops. This highlights the importance of improved water management if agriculture is to play an important role as a source of food security and better livelihoods. The report highlights the vulnerability of maize to water stress and the increased risks to the viability of rainfed farming systems based on this crop. The results of the second phase of analysis show that a 2°C increase in the temperature and a doubling of carbon dioxide concentration in the atmosphere will shorten the growing period of maize, which will result in decreased crop water requirement and use. The authors recommend extending this type of analysis to other crops as well as to other countries to develop a clearer picture of the changing pattern in crop water use of the major crops grown in the project countries.
    Keywords: Water Supply and Sanitation Governance and Institutions,Crops & Crop Management Systems,Water Conservation,Water Supply and Systems,Town Water Supply and Sanitation
    Date: 2007–07–01
  5. By: Maria Berrittella; Katrin Rehdanz; Richard S.J. Tol (Economic and Social Research Institute, Dublin, Ireland); Jian Zhang
    Abstract: We used that GTAP-W model – GTAP5 with water resources added – to estimate the impact of hypothetical Doha-like liberalization of agricultural trade on water use. Three conclusions emerge. First, the change in regional water use is less than 10%, even if agricultural tariffs are reduced by 75%. Second, patterns are non-linear. Water use may go up for partial liberalization, and down for more complete liberalization. This is because different crops respond differently to tariff reductions, but also because trade and competition matter too. Third, trade liberalization tends to reduce water use in water scarce regions, and increase water use in water abundant regions, even though there no water markets in most countries.
    Keywords: Computable General Equilibrium, Trade Liberalization, Water Policy, Water Scarcity
    JEL: D58 F13 Q17 Q25
    Date: 2007–08
  6. By: Maddison, David; Manley, Marita; Kurukulasuriya, Pradeep
    Abstract: This paper uses the Ricardian approach to examine how farmers in 11 countries in Africa have adapted to existing climatic conditions. It then estimates the effects of predicted changes in climate while accounting for whatever farmer adaptation might occur. This study differs from earlier ones by using farmers ' own perceptions of the value of their land. Previous research, by contrast, has relied on either observed sale prices or net revenues, sometimes aggregated over geographically large tracts of terrain. The study also makes use of high resolution data describing soil quality and runoff. Furthermore, it tackles the challenges involved in modeling the effect of climate on agriculture in a study that includes countries in the northern and southern hemispheres, as well as the tropics. The study confirms that African agriculture is particularly vulnerable to climate change. Even with perfect adaptation, regional climate change by 2050 is predicted to entail production losses of 19.9 percent for Burkina Faso and 30.5 percent for Niger. By contrast, countries such as Ethiopia and South Africa are hardly affected at all, suffering productivity losses of only 1.3 percent and 3 percent, respectively. The study also confirms the importance of water supplies as measured by runoff, which, being affected by both temperature and precipitation, may itself be highly sensitive to climate change.
    Keywords: Environmental Economics & Policies,Climate Change,Common Property Resource Development,Rural Development Knowledge & Information Systems,Global Environment Facility
    Date: 2007–08–01
  7. By: Maurizio Canavari (Alma Mater Studiorum University of Bologna); Roberta Centonze (Alma Mater Studiorum University of Bologna); Gianluca Nigro (Alma Mater Studiorum University of Bologna)
    Abstract: The paper discusses the European organic agricultural sector from a socio-economical point of view and from a EU perspective. In the 1990s organic agriculture has known a strong development and today it is considered as a stable sector and with a certain economic importance inside agricultural sector. If originally organic food was the result of an ideological choice and was set inside the alternative culture in opposition to current models of economic development and social organisation, today it has the feature of an entrepreneurial phenomenon, belonging to a life style and to a finally acknowledged cultural model which is able to attract human and financial resources on its own, to produce profit and to satisfy a steadily increasing market. A description of the data obtained by the main available sources on organic food markets in Europe is provided, trying to analyse the present scenario for organic agriculture with the lenses of the 4Ps marketing management paradigm. The analysis may be useful to shed light on the several facets of the organic sector in Europe, and as a basis for further studies on the topic.
    Keywords: organic food, distribution, marketing, communication, brand
    JEL: Q13 Q17
    Date: 2007–01
  8. By: Strzepek, Kenneth; McCluskey, Alyssa
    Abstract: This paper summarizes the methods and findings of the hydrological assessment component of the project studying likely impacts of climate change on water resources and agriculture in Africa. The first phase of the study used a version of a conceptual rainfall-runoff model called WatBal (Water Balance) applied to gridded data to simulate changes in soil moisture and runoff across the whole continent of Africa rather than to any particular catchment or water resource system. The model inputs were the climate variables of the 1961-90 climatology and physiological parameters (such as soil properties and land use) derived from global datasets for each of the 0.5o latitude/longitude cells across the continent. The primary model output comprised a time series (monthly time step) of simulated runoff for all the grid cells for each of the districts in the countries of interest. The second phase of the study extended the hydrology analyses to update the above hydroclimatic series to the year 2000 using updated input data. To ascertain the possible impacts of climate change within the districts being investigated this study used synthetic or GCMbased clima te change scenarios as input to the WatBal model. The WatBal model was used to determine the impact of these different scenarios on runoff and actual evaporation and hence flow in the districts under study. The generated hydroclimatic series and scenario analyses were used as inputs into various Ricardian regressions in other analyses measuring likely impacts of climate change on the agricultural economies of Africa.
    Keywords: Wetlands,Climate Change,Water Supply and Systems,Global Environment Facility,Common Property Resource Development
    Date: 2007–07–01
  9. By: Kurukulasuriya, Pradeep; Mendelsohn, Robert
    Abstract: This paper examines whether the choice of crops is affected by climate in Africa. Using a multinomial logit model, the paper regresses crop choice on climate, soils, and other factors. The model is estimated using a sample of more than 7,000 farmers across 11 countries in Africa. The study finds that crop choice is very climate sensitive. For example, farmers select sorghum and maize-millet in the cooler regions of Africa; maize-beans, maize-groundnut, and maize in moderately warm regions ' and cowpea, cowpea-sorghum, and millet-groundnut in hot regions. Further, farmers choose sorghum, and millet-groundnut when conditions are dry; cowpea, cowpea-sorghum, maize-millet, and maize when medium wet; and maize-beans and maize-groundnut when wet. As temperatures warm, farmers will shift toward more heat tolerant cro ps. Depending on whether precipitation increases or decreases, farmers will also shift toward drought tolerant or water loving crops, respectively. There are several policy relevant conclusions to draw from this study. First, farmers will adapt to climate change by switching crops. Second, global warming impact studies cannot assume crop choice is exogenous. Third, this study only examines choices across current crops. Future farmers may well have more choices. There is an important role for agronomic research in developing new varieties more suited for higher temperatures. Future farmers may have even better adaptation alternatives with an expanded set of crop choices specifically targeted at higher temperatures.
    Keywords: Crops & Crop Management Systems,Climate Change,Agriculture & Farming Systems,Renewable Energy,Global Environment Facility
    Date: 2007–08–01
  10. By: Maddison, David
    Abstract: The objective of this paper is to determine the ability of farmers in Africa to detect climate change, and to ascertain how they have adapted to whatever climate change they believe has occurred. The paper also asks farmers whether they perceive any barriers to adaptation and attempts to determine the characteristics of those farmers who, despite claiming to have witnessed climate change, have not yet responded to it. The study is based on a large-scale survey of agriculturalists in 11 African countries. The survey reveals that significant numbers of farmers believe that temperatures have already increased and that precipitation has declined. Those with the greatest experience of farming are more likely to notice climate change. Further, neighboring farmers tell a consistent story. There are important differences in the propensity of farmers living in different locations to adapt and there may be institutional impediments to adaptation in some countries. Although large numbers of farmers perceive no barriers to adaptation, those that do perceive them tend to cite their poverty and inability to borrow. Few if any farmers mentioned lack of appropriate seed, security of tenure, or market accessibility as problems. Those farmers who perceive climate change but fail to respond may require particular incentives or assistance to do what is ultimately in their own best interests. Although experienced farmers are more likely to perceive climate change, it is educated farmers who are more likely to respond by making at least one adaptation.
    Keywords: Climate Change,Rural Poverty Reduction,Environmental Economics & Policies,Agricultural Knowledge & Information Systems,Rural Development Knowledge & Information Systems
    Date: 2007–08–01
  11. By: Jain, Suman
    Abstract: This report assesses the economic impacts of climate change on agriculture in Zambia, using the Ricardian method. A multiple linear regression model with net revenue per hectare as response variable has been fitted with climate, hydrological, soil, and socioeconomic variables as explanatory variables. There is one main cropping season in Zambia, lasting from November to April. Crop production in this period depends solely on rains. Considering crop progression in three stages-germination, growing, and maturing, which requi re different amounts of water and temperature-the climate variables included in the model are long-term averages of the temperature and wetness index for the periods November to December, January to February, and March to April. Assuming a nonlinear relationship of farm revenue with the climate variables, quadratic terms for climate variables were also included in the model. The results indicate that most socioeconomic variables are not significant, whereas some climate variables and the corresponding quadratic variables are significant in the model. Further findings are that an increase in the November-December mean temperature and a decrease in the January-February mean rainfall have negative impacts on net farm revenue, whereas an increase in the January-February mean temperature and mean annual runoff has a positive impact.
    Keywords: Climate Change,Crops & Crop Management Systems,Global Environment Facility,Common Property Resource Development,Economic Theory & Research
    Date: 2007–07–01
  12. By: Alessandro Corsi; Cristina Salvioni
    Abstract: Most farms are family business, both in developed and developing countries. Labour allocation choices of farm household members are therefore relevant both for production choices in the farm and for rural labour markets. In particular, off-farm work and combination of on- and off-farm work (pluriactivity) are viewed as an efficient allocation of household labour resources. Moreover, labour choice of the children of the farm household are relevant for farm succession. In this paper we extend previous literature by estimating in an unified framework labour participation choices both for on- and off-farm work for operators, spouses, and their eldest children in working age, using a five-equation multivariate probit.
    Keywords: off-farm labour participation, on-farm labour participation, farm household, multivariate probit
    JEL: J22 J43 Q12
    Date: 2006–12
  13. By: Lotsch, Alexander
    Abstract: The detailed analysis of current cropping areas in Africa presented here reveals s ignificant climate sensitivities of cropland density and distribution across a variety of agro-ecosystems. Based on empirical climate-cropland relationships, cropland density responds positively to increases in precipitation in semi-arid and arid zones of the sub-tropics and warmer temperatures in higher elevations. As a result, marginal increases in seasonal precipitation lead to denser cropping areas in arid and semi-arid regions. Warmer temperatures, on the other hand, tend to decrease the probability of cropping in most parts of Africa (the opposite is true for increases in rainfall and decreases in temperatures relative to current conditions). Despite discrepancies and uncertainties in climate model output, the analysis suggests that cropland area in Africa is likely to decrease significantly in response to transient changes in climate. The continent is expected to have lost on average 4.1 percent of its cropland by 2039, and 18.4 percent is likely to have disappeared by the end of the century. In some regions of Africa the losses in cropland area are likely to occur at a much faster rate, with northern and eastern Africa losing up to 15 percent of their current cropland area within the next 30 years or so. Gains in cropland area in western and southern Africa due to projected increases in precipitation during the earlier portions of the century will be offset by losses later on. In conjunction with existing challenges in the agricultural sector in Africa, these findings demand sound policies to manage existing agricultural lands and the productivity of cropping systems.
    Keywords: Climate Change,Crops & Crop Management Systems,Global Environment Facility,Common Property Resource Development,Rural Poverty Reduction
    Date: 2007–07–01
  14. By: Kurukulasuriya, Pradeep; Mendelsohn, Robert
    Abstract: This study examines the impact of climate change on cropland in Africa. It is based on a survey of more than 9,000 farmers in 11 countries: Burkina Faso, Cameroon, Egypt, Ethiopia, Ghana, Kenya, Niger, Senegal, South Africa, Zambia, and Zimbabwe. The study uses a Ricardian cross-sectional approach in which net revenue is regressed on climate, water flow, soil, and economic variables. The results show that net revenues fall as precipitation falls or as temperatures warm across all the surveyed farms. In addition to examining all farms together, the study examined dryland and irrigated farms separately. Dryland farms are especially climate sensitive. Irrigated farms have a positive immediate response to warming because they are located in relatively cool parts of Africa. The study also examined some simple climate scenarios to see how Africa would respond to climate change. These uniform scenarios assume that only one aspect of climate changes and the change is uniform across all of Africa. In addition, the study examined three climate change scenarios from Atmospheric Oceanic General Circulation Models. These scenarios predicted changes in climate in each country over time. Not all countries are equally vulnerable to climate change. First, the climate scenarios predict different temperature and precipitation changes in each country. Second, it is also important whether a country is already hot and dry. Third, the extent to which farms are irrigated is also important.
    Keywords: Climate Change,Environmental Economics & Policies,Global Environment Facility,Common Property Resource Development,Crops & Crop Management Systems
    Date: 2007–08–01
  15. By: Karen Mayor (Economic and Social Research Institute (ESRI)); Susan Scott (Economic and Social Research Institute (ESRI)); Richard S.J. Tol (Economic and Social Research Institute (ESRI))
    Abstract: The purpose of this study is to check the monetary value of the recreational use of Irish forests using two different valuation methods on the one dataset – the Travel Cost Method and the Contingent Valuation Technique – and in doing so test convergent validity, i.e. whether they are consistent with each other. It is found that convergence cannot be established with this data. The Willingness-to-Pay for entrance responses are stationary and tend to cluster around IR£1 per adult equivalent per trip. The TCM results of consumer surplus, which should be the same as WTP, are more variable depending on which sample is analysed and range between IR£2.38 and IR£5.95 per adult equivalent per trip. No correlation between these two variables was found. It seems that there are problems in getting people to state their true WTP. This is possibly due to a misinterpretation of the question by respondents as well as a tendency to revert to a common number. It is also likely that respondents used their WTP answers to make a political statement against the expansion of forestland using agricultural land. Finally, forests in Ireland are regarded as public goods and consequently there exists a stance among users that access to them should be free of charge, which might explain the large number of protest bids.
    Keywords: Contingent Valuation, Travel Cost Model, Forest Recreation.
    Date: 2007–04
  16. By: Dritan Osmani; Richard S.J. Tol (Economic and Social Research Institute, Dublin, Ireland)
    Abstract: The stability of International Environmental Agreements (IEA) is analyzed by using game theory. The integrated assessment model FUND provides the cost-bene¯t payo® functions of pollution abatement for sixteen di®erent world regions. The farsighted stability concept of Chwe (1994) is used and solved by combinatorial algorithms. The farsighted stability con- cept captures the perfect foresight of the players and predicts which coalitions can be formed when players are farsighted. All farsightedly stable coalitions are found as well as their im- provement to environment and welfare. The farsightedly stable coalitions are re¯ned further to the preferred farsightedly stable coalitions. The d'Aspremont stable coalitions are very shortly presented in order to compare with farsighted stable ones. The stability concept of d'Aspremont et al. (1983) assumes that players are myopic and consider only single-player movements.
    Keywords: game theory, integrated assessment modeling, farsighted stability, coalition formation, d'Aspremont stability
    JEL: C72 Q54
    Date: 2007–07
  17. By: Martin Richardson; Frank Staehler
    Abstract: This paper deals with the behavior of fair trade organizations in an oligopolistic setting in which the vertically integrated fair trade firm produces a commodity which is a weak substitute for another commodity. Profit-maximizing oligopolists are vertically disintegrated and produce for both markets and the fair trade firm can charge a premium to consumers due to a "warm glow effect" that depends on the wage paid to fair trade producers. We show that trade integration will unambiguously increase the size of the fair trade firm. However, the relative size compared to oligopolists shrinks with integration. The effect of a change in substitutability between the two commodities on markets shares depends on the relative market potential. Furthermore, we show that the warm glow effect does not support an expansion of the volume of fair trade.
    JEL: F12
    Date: 2007–06

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