New Economics Papers
on Agricultural Economics
Issue of 2007‒09‒16
nine papers chosen by

  1. Realizing the Gains From Trade: Export Crops, Marketing Costs, and Poverty By Jorge Balat; Irene Brambilla; Guido Porto
  2. The Impact of Climate Change on the Profitability of Site Specific Technologies By Finger, Robert; Gerwig, Claude N.
  3. Review of environmental, economic and policy aspects of biofuels By Zilberman, David; Rajagopal, Deepak
  4. Poor Household Participation in Payments for Environmental Services: Lessons from the Silvopastoral Project in Quindío, Colombia By Pagiola, Stefano; Rios, Ana R.; Arcenas, Agustin
  5. Forest management policies and resource balance in China: an assessment of the current situation By Sylvie Démurger; Yang Weiyong; Hou Yuanzhao
  6. Agro-biodiversity as natural insurance and the development of financial insurance markets By Stefan Baumgärtner; Martin F. Quaas
  7. Managing saline groundwater impacts from irrigation - Designing and testing emissions trading in Coleambally Irrigation Area By Stuart Whitten; Shahbaz Khan; D. Collins; D. Robinson; John Ward
  8. Beyond Economic Efficiency in Biodiversity Conservation By Franz Gatzweiler; Jörg Volkmann
  9. Climate Policy and the Optimal Extraction of High- and Low-Carbon Fossil Fuels By Edwin van der Werf; Sjak Smulders

  1. By: Jorge Balat; Irene Brambilla; Guido Porto
    Abstract: This paper explores the role of export costs in the process of poverty reduction in rural Africa. We claim that the marketing costs that emerge when the commercialization of export crops requires intermediaries can lead to lower participation into export cropping and, thus, to higher poverty. We test the model using data from the Uganda National Household Survey. We show that: i) farmers living in villages with fewer outlets for sales of agricultural exports are likely to be poorer than farmers residing in market-endowed villages; ii) market availability leads to increased household participation in export cropping (coffee, tea, cotton, fruits); iii) households engaged in export cropping are less likely to be poor than subsistence-based households. We conclude that the availability of markets for agricultural export crops help realize the gains from trade. This result uncovers the role of complementary factors that provide market access and reduce marketing costs as key building blocks in the link between the gains from export opportunities and the poor.
    JEL: F10 F14
    Date: 2007–09
  2. By: Finger, Robert; Gerwig, Claude N.
    Abstract: Site Specific Technologies (SST) can reduce environmental pollution caused by common agricultural practice. Using a case study for corn yields, we investigate the impact of climate change (CC) on profitability of SSTs. We find CC to increase spatial variability of soils with respect to optimal input application and yield variability. This leads, ceteris paribus, to higher incentives for SST adoption in the future.
    Keywords: Climate Change; Site Specific Technologies; Adaptation; Crop Production Function
    JEL: Q54 Q01 Q12 O13 O31
    Date: 2007–09
  3. By: Zilberman, David; Rajagopal, Deepak
    Abstract: The world is witnessing a sudden growth in production of biofuels, especially those suited for replacing oil like ethanol and biodiesel. This paper synthesizes what the environmental, economic, and policy literature predicts about the possible effects of these types of biofuels. Another motivation is to identify gaps in understanding and recommend areas for future work. The analysis finds three key conclusions. First, the current generation of biofuels, which is derived from food crops, is intensive in land, water, energy, and chemical inputs. Second, the environmental literature is dominated by a discussion of net carbon offset and net energy gain, while indicators relating to impact on human health, soil quality, biodiversity, water depletion, etc., have received much less attention. Third, there is a fast expanding economic and policy literature that analyzes the various effects of biofuels from both micro and macro perspectives, but there are several gaps. A bewildering array of policies - including energy, transportation, agricultural, trade, and environmental policies - is influencing the evolution of biofuels. But the policies and the level of subsidies do not reflect the marginal impact on welfare or the environment. In summary, all biofuels are not created equal. They exhibit considerable spatial and temporal heterogeneity in production. The impact of biofuels will also be heterogeneous, creating winners and losers. The findings of the paper suggest the importance of the role biomass plays in rural areas of developing countries. Furthermore, the use of biomass for producing fuel for cars can affect access to energy and fodder and not just access to food.
    Keywords: Energy Production and Transportation,Environmental Economics & Policies,Renewable Energy,Transport Economics Policy & Planning,Energy and Environment
    Date: 2007–09–01
  4. By: Pagiola, Stefano; Rios, Ana R.; Arcenas, Agustin
    Abstract: As the use of Payments for Environmental Services (PES) approaches in developing countries has grown, concern has arisen over the ability of poorer households to participate. This paper uses data from a PES project being implemented in Quindío, Colombia, to examine the extent to which poorer households that are eligible to participate are in fact able to do so. The project provides a strong test of the ability of poorer households to participate in a PES program as it requires participants to make substantial and complex land use changes. The results show that poorer households are in fact able to participate at levels that are broadly similar to those of better-off households. Moreover, their participation was not limited to the simpler, least expensive options. Transaction costs may be greater obstacles to the participation of poorer households than household-specific constraints.
    Keywords: Payments for Environmental Services (PES); poverty; silvopastoral; Colombia
    JEL: Q57 Q24 Q12
    Date: 2007–09–06
  5. By: Sylvie Démurger (GATE CNRS); Yang Weiyong (University of International Business & Economics, Beijing, China); Hou Yuanzhao (Chinese Academy of Forestry, Beijing, China)
    Abstract: Using the latest forest inventory, this paper provides a comprehensive analysis of China’s forest sector by focusing on new forest trends, forest policy changes and challenges to achieve a sustainable forest management. We analyze the dynamics of forest resources and provide an impact assessment of forest policies on China’s forestry development over the last decades. Moreover, the analysis of the forest market highlights substantial disequilibria marked by a limited domestic supply potential and a growing demand for forest products satisfied by increasing imports. Internal and external solutions are explored and their implications for China and supplying countries are assessed.
    Keywords: China - Forest management - Forest resources
    JEL: O13 O53 Q23 Q28
    Date: 2007–04
  6. By: Stefan Baumgärtner (Centre for Sustainability, University of Lüneburg); Martin F. Quaas (Department of Ecological Modelling, UFZ-Centre for Environmental Research Leipzig-Halle)
    Abstract: Agro-biodiversity can provide natural insurance to risk averse farmers. We employ a conceptual ecological-economic model to analyze the choice of agrobiodiversity by risk averse farmers who have access to financial insurance. We study the implications for individually and socially optimal agro-ecosystem managementand policy design when on-farm agro-biodiversity, through ecosystem processes at higher hierarchical levels, generates a positive externality on other farmers. We show that for the individual farmer natural insurance from agro-biodiversty and financial insurance are substitutes. While an improved access to financial insurance leads to lower agro-biodiversity, the eects on the market failure problem (due to the external benefits of on-farm agro-biodiversity) and on welfare are determined by properties of the agro-ecosystem and agro-biodiversity’s external benefits. We derive a specific condition on agro-ecosystem functioning under which, if financial insurance becomes more accessible, welfare in the absence of regulation increases or decreases.
    Keywords: agro-biodiversity, ecosystem services, agro-ecosystem management, insurance, risk-aversion, uncertainty
    JEL: Q1 Q57 H23 D62
    Date: 2007–09–12
  7. By: Stuart Whitten; Shahbaz Khan; D. Collins; D. Robinson; John Ward (CSIRO Sustainable Ecosystems, Australia)
    Abstract: Irrigated agriculture often leads to recharge to local and regional groundwater systems greater than what the systems can absorb, resulting in the development of shallow watertables causing salinity and waterlogging. Policy based on emissions trading offers one option for effective management of existing recharge externalities if effective property rights to diffuse emissions can be defined. In this paper we combine the conclusions drawn from biophysical research with economic principles underpinning emissions trading to present such a system. Allocation of net recharge contracts to irrigation farms will internalize the costs associated with saline aquifer impacts. Irrigators may reduce their compliance costs by creating or purchasing credits that reduce recharge through perennial vegetation, engineering solutions or crop rotation options. We discuss the economic impacts of adopting such a policy in the Coleambally Irrigation Area in southwestern New South Wales, Australia. We also demonstrate some of the conclusions drawn from our research using experimental economics.
    Keywords: salinity, irrigation, recharge, tradeable emissions, cap and trade, hydrologic-economic modelling, experimental economics
    JEL: Q57
    Date: 2007–09
  8. By: Franz Gatzweiler (Center for Development Research, University of Bonn, Walter-Flex-Str. 3, 53113 Bonn); Jörg Volkmann (Amber Foundation, Freiburg, Germany,)
    Abstract: This paper aims at explaining the importance of the democracy stance as compared to the efficiency stance in order to deal with complexity in biodiversity conservation. While the efficiency stance refers to the realm of relatively simple systems, individual rationality, and instrumental values, the complexity stance transcends these boundaries into the realm of complex systems, social rationality and intrinsic values. We argue that the task of biodiversity conservation is impossible to achieve in economically efficient ways, because (a) it is impossible to come to a (fully informed) complete account of all values, not only because it is costly but also because (b) moral values are involved which (by their nature) exclude themselves from being accounted for, and (c) biodiversity conservation can be regarded as an end in itself instead of only a means towards an end. The point we raise is, that in order to cope with biodiversity conservation we need to apply valuation methods which are from the complexity stance, take better account of intrinsic values and feelings, as well as consider social rationality. Economic valuation methods are themselves 'value articulating institutions' and as biodiversity conservation confronts us with the complexity of social-ecological systems, the choice of the 'value articulating institutions' needs to consider their ability to capture instrumental and intrinsic values of biodiversity. We demonstrate a method, based on cybernetics, which is able to take into account the issues raised.
    Keywords: Biodiversity conservation, efficiency, complexity, values, institutions
    JEL: B52 Q51 Q57
    Date: 2007–08
  9. By: Edwin van der Werf (Kiel Institute for the World Economy); Sjak Smulders (University of Calgary and Tilburg University)
    Abstract: We study how restricting CO2 emissions affects resource prices and depletion over time. We use a Hotelling-style model with two non-renewable fossil fuels that differ in their carbon content (e.g. coal and natural gas) and in addition are imperfect substitutes in final good production. We show that an economy facing a CO2 flow-constraint may substitute towards the relatively dirty input. As the economy tries to maximise output per unit of emissions it is not only carbon content that matters: productivity matters as well. With an announced constraint the economy first substitutes towards the less productive input such that more of the productive input is available when constrained. Preliminary empirical results suggest that it is cost-effective to substitute away from dirty coal to cleaner oil or gas, but to substitute from natural gas towards the dirtier input oil.
    Keywords: Climate Policy, Non-Renewable Resources, Input Substitution
    JEL: O13 Q31 Q43
    Date: 2007–08

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