nep-agr New Economics Papers
on Agricultural Economics
Issue of 2007‒08‒27
twenty-one papers chosen by
Angelo Zago
University of Verona

  1. Modelling Organic Farming at Sector Level. An Application to the Reformed CAP in Austria By Erwin Schmid; Franz Sinabell
  2. How coupled are decoupled farm payments? A review of coupling mechanisms and the evidence By Bhaskar, Arathi; Beghin, John C.
  3. Creating a Geographically Linked Brand for High-Quality Beef: A Case Study By Bruce A. Babcock; Dermot J. Hayes; John D. Lawrence; Roxanne Clemens
  4. Economic evidence of willingness to pay for the National Animal Identification System (NAIS) in the U.S. By Resende-Filho, Moises; Buhr, Brian
  5. Do overlapping property rights reduce agricultural investment ? evidence from Uganda By Deininger, Klaus; Ali, Daniel Ayalew
  6. An emerging agricultural problem in high-performing Asian economies By Hayami, Yujiro
  7. Customary land tenure, inheritance rules, and smallholder farmers in Malawi By Takane, Tsutomu
  8. Efficiency and equity impacts of rural land rental restrictions : evidence from India By Nagarajan, Hari K.; Jin, Songqing; Deininger, Klaus
  9. Analysis of Increased Participation of Agriculture in the Brazilian GDP From 1960 to 2004 By Carlos Bacha; Ricardo Brugnaro
  10. Managing agricultural risk at the country level : the case of index-based livestock insurance in Mongolia By Skees, Jerry; Mahul, Olivier
  11. Market access asymmetry in food trade By Alessandro Olper; Valentina Raimondi
  12. Carbon Sequestration in Forest Ecosystems as a Strategy for Mitigating Climate Change By G. Cornelis van Kooten; Susanna Laaksonen-Craig; Yichuan Wang
  13. Issues of Dual Use and Reviewing Product Coverage of Environmental Goods By Joy A. Kim
  14. Publicness and Taken-for-granted Knowledge: A Case Study of Communal Land Formation in Rural Thailand By Shigetomi, Shin'ichi
  15. Determinants and consequences of land sales market participation : panel evidence from India By Nagarajan, Hari K.; Jin, Songqing; Deininger, Klaus
  16. Regional Differences in Food Consumption in Urban Mozambique: A Censored Demand System Approach By Mikkel Barslund
  17. Optimizing Franchisee Sales and Business Performance in Retail Food Sector By Rajagopal
  18. Economics of Forest Ecosystem Carbon Sinks: A Review By G. Cornelis van Kooten; Brent Sohngen
  19. Industrial Development and the Innovation System of the Ethanol Sector in Brazil By Ueki, Yasushi
  20. Social Values of Biodiversity Conservation for the Endangered Loggerhead Turtle and Monk Seal By Pamela Kaval; Mavra Stithou; Riccardo Scarpa
  21. Demand for dairy products in the EU By BOUAMRA-MECHEMACHE, Zohra; RÉQUILLART, Vincent; SOREGAROLI, Claudio; TREVISIOL, Audrey

  1. By: Erwin Schmid; Franz Sinabell (WIFO)
    Abstract: Organic farming practices have environmental benefits compared to conventional ones. Their adoption is the result of a complex interaction of intrinsic attitudes of farmers, their profit expectations and farm policy incentives. We use an agricultural sector model and develop an extended version of the Positive Mathematical Programming (PMP) method to differentiate organic farming from other management practices. Austria is chosen for the case study because 8 percent of its farmland are managed organically, and detailed data on alternative management practices are available. The results suggest that the agricultural policy reforms made organic farming more attractive for farmers.
    Keywords: Organic farming, Common Agricultural Policy, Program for Rural Development, Agricultural Sector Modelling
    Date: 2007–02–19
  2. By: Bhaskar, Arathi; Beghin, John C.
    Abstract: This survey paper explores the literature on decoupling of farm programs that has emerged in the last 10 years. The paper identifies and assesses the various channels of potential coupling of decoupled farm payments and provides taxonomy of coupling mechanisms found in theoretical and empirical papers. Coupling of decoupled payments is pervasive but effects when measurable are small, with the exception of the impact on land values. The paper points to unresolved issues on potential coupling mechanisms for further research.
    Keywords: Decoupling, decoupled payments, farm policy, agricultural trade policy, coupling, direct payments, CCP, PFC, SFP.
    JEL: Q1
    Date: 2007–08–22
  3. By: Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Dermot J. Hayes (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); John D. Lawrence; Roxanne Clemens (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC))
    Abstract: Worldwide, a segment of consumers can afford to pay substantial price premiums for very high quality agricultural products with attributes those consumers value. At the same time, many U.S. farmers are producing these high-quality products but are not using market mechanisms that allow them to take fullest advantage of price premiums. This paper describes a pilot program developed to commercialize an origin-based collective brand for very high quality beef. We hypothesize that, if successful, the program would create potential for cattle producers to take fuller advantage of price premiums often captured elsewhere in the marketing channel. Specifically, the pilot program analyzed two mechanisms for differentiating and marketing very high quality beef: a certification mark (a type of U.S. trademark that links products to their geographic origin) and a USDA Process Verification Program (a federal program that allows producers to provide documented assurances to their customers that a stated set of minimum production standards are met). This paper describes how we identified target markets, defined product specifications and determined potential supply, protected property rights using the U.S. trademark system, prepared documentation for a USDA process verification program, and attempted to commercialize Iowa-80 Beef. We also discuss the costs and feasibility of small firms or producer groups obtaining and maintaining a certification mark and a process verification program. Finally, we discuss the challenges and lessons learned from attempting to brand and commercialize very high quality beef.
    Keywords: certification mark, collective brands, consumer assurance, geographic origin, process verification.
    Date: 2007–08
  4. By: Resende-Filho, Moises; Buhr, Brian
    Abstract: This article investigates the willingness to pay for the National Animal Identification System (NAIS) in the US. We assume that with the NAIS in place, consumers’ concerns about Bovine Spongiform Encephalopathy (BSE) or mad cow disease will be reduced and by inference consumers will be willing to pay for the NAIS. To estimate this level of willingness to pay a generalized almost ideal demand system including beef, pork and poultry is estimated, including indexes of perception of BSE based on news coverage of BSE in the U.S. We found that while news indexes of BSE were not individually significant, that they were jointly significant in test of preferred models. Using the preferred model, we constructed three scenarios on the basis of hypothesized impacts of the NAIS on consumers' food safety concerns about meat. Our conclusion is that the impact of BSE on consumer demand for meat was in itself sufficient to cover previously estimated costs of implementing the NAIS. However, it does so at the expense of pork and poultry which lose consumption relative to beef if the NAIS reduces consumers concerns as assumed. Other disease and pathogen potential would be expected to further enhance its value.
    Keywords: Animal Identification System; Food Safety; System of Demand Equations; Meat Industry; USA
    JEL: Q18 Q11 Q13
    Date: 2006–09–01
  5. By: Deininger, Klaus; Ali, Daniel Ayalew
    Abstract: The need for land-related investment to ensure sustainable land management and increase productivity of land use is widely recognized. However, th ere is little rigorous evidence on the effects of property rights for increasing agricultural productivity and contributing toward poverty reduction in Africa. Whether and by how much overlapping property rights reduce investment incentives, and the scope for policies to counter such disincentives, are thus important policy issues. Using information on parcels under ownership and usufruct by the same household from a nationally representative survey in Uganda, the authors find significant disincentives associated with overlapping property rights on short and long-term investments. The paper combines this result with information on crop productivity to obtain a rough estimate of the magnitudes involved. The authors make suggestions on ways to eliminate such inefficiencies.
    Keywords: Wetlands,Labor Policies,Common Property Resource Development,,Municipal Housing and Land
    Date: 2007–08–01
  6. By: Hayami, Yujiro
    Abstract: Policies to tax farmers in low-income countries and policies to subsidize them in high-income countries have been identified as a major source of the disequilibrium of world agriculture. Recently, as many high-performing economies in Asia advanced from the low-income to the middle-income stage through successful industrialization, they have been confronted with the problem of a widening income gap between farm and non-farm workers corresponding to rapid shifts in comparative advantage from agriculture to manufacturing. In order to prevent this disparity from culminating in serious social and po litical instability, policies have been reoriented toward supporting the income of farmers. At the same time, governments in middle-income countries must continue to secure low-cost food for the urban poor who are still large in number. The need to achieve the two conflicting goals under the still weak fiscal capacity of governments tends to make agricultural policies in the middle-income stage tinkering and ineffective. Greater research inputs in this area are called for in order to prevent the growth momentum of high-performing economies in Asia from being disrupted by political crises.
    Keywords: Economic Theory & Research,Rural Poverty Reduction,,Emerging Markets,Labor Policies
    Date: 2007–08–01
  7. By: Takane, Tsutomu
    Abstract: Based on information derived from six villages in various parts of rural Malawi, this paper examines the interrelationship between smallholder strategies to obtain land on the one hand, and customary land tenure and inheritance rules on the other. The paper revealed that although the majority of land transactions followed customary land tenure systems and inheritance rules, in a good number of cases land transactions deviated from the basic rules. One factor behind such deviation was the unique personal relationships that were developed between original landholders and heirs. Another factor was the seemingly increasing cases of returning wives in patrilineal villages. Still another factor was the intensifying land scarcity that encouraged villagers to adopt strategies to obtain land from any source by any means. On the other hand, there were also some cases in which the same land-scarcity problem induced villagers to countercheck the practice of flexible land transfer to prevent their lineage land from being alienated to non-kin members. These facts suggest that, in a land scarce situation, an individual strategy to obtain land rights from any possible sources by deviating from customary rules may occasionally be in conflict with a lineage strategy to countercheck such tendency.
    Keywords: Land, Smallholder, Customary Tenure, Malawi, Africa, Land tenure, Farmers
    Date: 2007–05
  8. By: Nagarajan, Hari K.; Jin, Songqing; Deininger, Klaus
    Abstract: Recognition of the potentially deleterious implications of inequality in opportunity originating in a skewed asset distribution has spawned considerable interest in land reforms. However, little attention has been devoted to fact that, in the longer term, the measures used to implement land reforms could negatively affect productivity. Use of state level data on rental restrictions, together with a nationally representative survey from India, suggests that, contrary to original intenti ons, rental restrictions negatively affect productivity and equity. The restrictions reduce the scope for efficiency-enhancing rental transactions that benefit poor producers. Simulations suggest that, by doubling the number of producers with access to land through rental, from about 15 million currently, liberalization of rental markets could have far-reaching impacts.
    Keywords: Rural Development Knowledge & Information Systems,Municipal Housing and Land,Housing & Human Habitats,Climate Change,Land and Real Estate Development
    Date: 2007–08–01
  9. By: Carlos Bacha; Ricardo Brugnaro
    Abstract: According to international experience, the importance of agriculture in the gross domestic product (GDP) has a declining trend during the time. It has happening in all nations, including in Brazil from 1960 to 1993. However, starting in 1994 Brazil has experiencing an increasing in this variable, what has not being followed by most of the South American countries. This paper analyzes the factors that explain the increase of agriculture importance in the Brazilian gross domestic product during the last 11 years, comparing Brazilian experience with other South American and the most developed countries in the world. The methodology used is both organization of published dataset in graphs and tables as well as econometric analysis of these data. An accounting model is developed for explaining the main factors affecting the importance of agriculture in the GDP and an econometric model is adapted for estimating the accounting model. Using dataset from 1986 to 2004, our econometric findings suggest there is a structural change in the curve of agriculture share in the GDP, and the increase of agricultural production and productivity as well as the increase of (prices received/prices paid) ratio are the most important variables determining the increase of agriculture importance in the Brazilian GDP since 1994.
    Date: 2006–08
  10. By: Skees, Jerry; Mahul, Olivier
    Abstract: This paper describes the index-based livestock insurance program in Mongolia designed in the context of a World Bank lending operation with Government of Mongolia and implemented on a pilot basis in 2005. This program involves a combination of self -insurance by herders, market-based insurance, and social insurance. Herders retain small losses, larger losses are transferred to the private insurance industry, and extreme or catastrophic losses are transferred to the government using a public safety net program. A syndicate pooling arrangement protects participating insurance companies against excessive insured losses, with excess of loss reinsurance provided by the government. The fiscal exposure of Government of Mongolia toward the most extreme losses is protected with a contingent credit facility. The insurance program relies on a mortality rate index by species in each local region. The index provides strong incentives to individual herders to continue to manage their herds so as to minimize the impacts of major livestock mortality events; individual herders receive an insurance payout based on the local mortality, irrespective of their individual losses. This project offered the first opportunity to design and implement an agriculture insurance program using a country-wide agricultural risk management approach. During the first sales season, 7 percent of the herders in the three pilot regions purchased the insurance product.
    Keywords: Insurance & Risk Mitigation,Insurance Law,Hazard Risk Management,Debt Markets,Banks & Banking Reform
    Date: 2007–08–01
  11. By: Alessandro Olper; Valentina Raimondi
    Abstract: Using a bilateral trade equation derived from a monopolistic competition model, we investigated market access reciprocity in food trade among the US, Canada, the EU and Japan. We explore country and industry–specific market access asymmetry through the border effect approach, re-challenging the underlying main explanations. Our findings reveal marked asymmetry in reciprocal trade openness; indeed, access to the food markets of the US and Japan appears significantly easier than reciprocal access to both Canada and, especially, the EU. Policy trade barriers, firstly in the forms of NTBs, the degree of product differentiation and ‘home bias’ in preferences, are all important factors in explaining border effects. Moreover, several stylized facts suggest that border effect interpretation should also be based on political economy arguments.
    Keywords: gravity, market access, asymmetry, food trade, NTBs
    JEL: F13 F14 Q17
    Date: 2007
  12. By: G. Cornelis van Kooten; Susanna Laaksonen-Craig; Yichuan Wang
    Abstract: Under Kyoto, forestry activities can be used to create CO2 offset credits, which are earned by storing carbon in forest ecosystems and wood products. CO2 emissions could also be mitigated by delaying deforestation, which accounts for one-quarter of anthropogenic CO2 emissions. Non-permanent carbon offsets from forest activities are difficult to compare with each other and with mitigation strategies because they differ in how long they prevent CO2 from entering the atmosphere. We expand in comprehensive fashion on earlier work comparing carbon mitigation activities according to how long they lower atmospheric CO2 levels. The duration problem is modeled and meta-regression analysis with 1047 observations from 68 studies is used to determine whether duration leads to inconclusive results between uptake costs and carbon sequestration. Regression results are used to estimate potential costs of carbon uptake via forestry activities for various scenarios. It turns out that forestry activities are competitive with emissions reduction in tropical and, perhaps, boreal regions, but certainly not in Europe.
    Keywords: climate change, carbon offset credits from forestry activities, meta-regression analysis
    JEL: Q54 R15 Q23 Q27
    Date: 2007–07
  13. By: Joy A. Kim
    Abstract: Importing "environmental" goods which are also used for other than environmental purposes and ensuring that they represent the most appropriate technology for a particular environmental problem are key concerns to be addressed in the approaches currently being discussed under paragraph 31(iii) of the Doha Agenda. By drawing lessons from experiences with WTO sectoral agreements such as the Agreements on Information Technology (ITA), Trade in Pharmaceutical Products and Trade in Civil Aircraft as well as relevant national schemes, this paper explores possible options to address these two issues.
    Keywords: WTO, environmental goods
    Date: 2007–03–29
  14. By: Shigetomi, Shin'ichi
    Abstract: The lack of public-mindedness can cause problems in the social order of people’s daily lives, such as the tragedy of the commons and the problem of free riders. Some scholars such as Habermas assert that communicative rationality is the solution, expecting that individuals will communicate with each other to reach a consensus without being bounded by aspects of social background. Other scholars advocate the revitalization of traditional community culture. These arguments, however, are not based on reality. By using the case of communal land formation in rural Thailand, the author shows that collective action is neither a revival of tradition nor a result of communication free from social constraints. Rather, cooperation emerges because the people rationally respond to their present needs and have built, through daily social interactions, taken-for-granted knowledge about how they should behave for cooperation.
    Keywords: Local organization, Rural development, Thailand, Public sphere, Community forest, Communal land, Community, Forest
    JEL: O18 Q15 Q23 Z13
    Date: 2007–06
  15. By: Nagarajan, Hari K.; Jin, Songqing; Deininger, Klaus
    Abstract: Although opinions on impacts of land market transfers are sharply divided, few studies explore the welfare and productivity effects of land markets on a larger scale. This paper uses a large Indian panel spanning almost 20 years, together with a climatic shock (rainfall) indicator, to assess the productivity and equity effects of market-mediated land transfers (sale and purchase) compared with no n-market ones (inheritance). The analysis shows that frequent shocks increase land market activity, an effect that is mitigated by the presence of safety nets and banks. Land sales markets improved productivity and helped purchasers, many of whom were formerly landless, to accumulate non-land assets and significantly enhance their welfare.
    Keywords: Banks & Banking Reform,Markets and Market Access,Municipal Housing and Land,,Real Estate Development
    Date: 2007–08–01
  16. By: Mikkel Barslund (Department of Economics, University of Copenhagen)
    Abstract: A nationwide household survey for Mozambique is used to estimate a large censored food demand system with 12 food groups for the sample of urban households. Using the translog indirect utility approach, the censored nature of the data is addressed by estimating a system of Tobit equations with a recently suggested quasi maximum likelihood estimator. Augmenting the system with demographic and geographical variables in a theoretically consistent way, I find that differences in elasticities between regions are significant. The results show that regional variation has to be taken into account when evaluating policies or employing CGE models. Further, the approach employed here can be applied to a number of developing countries with varying geographic conditions.
    Keywords: censored demand system; elasticities; Mozambique; food demand; regional differences
    JEL: D12 O12 O18
    Date: 2007–08
  17. By: Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: This paper aims at identifying attributes of players in franchising process that contribute in delivering satisfaction in purchasing and operating the outlets in Mexico. The discussion also focuses the impact of cultural diversities in franchisee selection, outlet management and achieving high performance. Franchisee relationship has been evaluated in reference to principal determinants attributing to the enhancement of satisfaction and strengthening franchisor-franchisee ties. It has been observed in the study that performance of franchisee outlets is a function of outlet attraction, supply and manufacturing management, quality, price, and promotional strategies as functional factors. Besides, relational variables including personalized customer services, leisure support and customer convenience also influence the performance of outlets.
    Keywords: Franchising, performance measurement, market demand, sales management, retailing, store organization, pricing, promotional strategies, customer value and business growth
    JEL: C51 D23 L81 M31
    Date: 2007–08
  18. By: G. Cornelis van Kooten; Brent Sohngen
    Abstract: Carbon terrestrial sinks are seen as a low-cost alternative to fuel switching and reduced fossil fuel use for lowering atmospheric CO2. In this study, we review issues related to the use of terrestrial forestry activities to create CO2 offset credits. To gain a deeper understanding of the confusing empirical studies of forest projects to create carbon credits under Kyoto, we employ meta-regression analysis to analyze conditions under which forest activities generate CO2-emission reduction offsets at competitive ‘prices’. In particular, we examine 68 studies of the costs of creating carbon offsets using forestry. Baseline estimates of costs of sequestering carbon are some US$3–$280 per tCO2, indicating that the costs of creating CO2-emission offset credits through forestry activities vary wildly. Intensive plantations in the tropics could potentially yield positive benefits to society, but in Europe similar projects could cost as much as $195/tCO2. Indeed, Europe is the highest cost region, with costs in the range of $50-$280 per tCO2. This might explain why Europe has generally opposed biological sinks as a substitute for emissions reductions, while countries rush to finance forestry sector CDM projects. In Canada and the U.S., carbon sequestration costs range from a low of about $2 to nearly $80 per tCO2. One conclusion is obvious: some forestry projects to sequester carbon are worthwhile undertaking, but certainly not all.
    Keywords: climate change, Kyoto Protocol, meta-regression analysis, carbon-uptake costs, forest sinks
    JEL: Q2 Q25 H43 C19
    Date: 2007–04
  19. By: Ueki, Yasushi
    Abstract: The purpose of this paper is to analyze innovations and the innovation system and its dynamics in the ethanol sector in the State of São Paulo. More specifically, this paper focuses on the development process in the sector, the public policies taken to promote the sector, and the organizations and key players involved in these policies and their responses to unforeseeable changes in economic, social and technological environments. To this end, this paper takes an historical perspective and reviews data on the cultivation of sugar cane, the production of ethanol, and on sugar cane yields as indicators of the innovations achieved in the sector. The geographical distribution of these indicators is also examined. Next, several cases in Piracicaba and Campinas in the State of São Paulo are presented; these give us a more concrete idea of the processes involved in innovation and technology transfer. Based on these observations, the ethanol cluster and the innovation system of the State of São Paulo are discussed from the viewpoint of the flowchart approach to industrial cluster policy.
    Keywords: Industrial Agglomeration, Innovation, Sugar Cane, Sugar, Ethanol, Brazil, Technological innovations, Fuel, Research & development, Technology transfer
    JEL: Q16 Q42 R12
    Date: 2007–06
  20. By: Pamela Kaval (University of Waikato); Mavra Stithou (University of Stirling); Riccardo Scarpa (University of Waikato)
    Abstract: The Mediterranean monk seal (Monachus monachus) and the loggerhead turtle (Caretta caretta) are two species on the priority list for conservation in Greece due to their dwindling populations worldwide. Hence the issue of estimating willingness to pay for their conservation is germane to any protection initiative. Zakynthos Island in Greece has created a marine park for the conservation of such species. We report the results of a survey of visitors and residents of this island who were asked about making one-time donations in the form of either a tax for residents or a plane landing fee for tourists. We find that all people were willing to pay to protect these species; however, residents were willing to pay more than tourists. We then tested whether there was a sequence or ordering effect if the seal questions came before the turtles as well as if the turtle questions came before the seals. Such effect was found when turtle questions were presented first, but not when seal questions were presented first. Due to the extensive interest, it is recommended that an increase in the airplane landing fee to Zakynthos could be used to contribute towards funds for loggerhead turtle and monk seal protection.
    Keywords: biodiversity conservation; Zakynthos; contingent valuation; ordering effect; Monk seal; Loggerhead turtle.
    JEL: Q2 Q34
    Date: 2006–08–20
    Date: 2007

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