New Economics Papers
on Agricultural Economics
Issue of 2007‒09‒24
fourteen papers chosen by

  1. Evidence of slowing yield growth – the example of Swiss cereal yields By Finger, Robert
  2. Distortions to Agricultural Incentives in Australia Since World War II By Anderson, Kym; Lloyd, Peter J; Maclaren, Donald
  3. From shifting agriculture to sustainable rubber agroforestry systems (jungle rubber) in Indonesia: a history of innovations processes. By Eric Penot
  4. Non-traditional crops, traditional constraints : the adoption and diffusion of export crops among guatemalan smallholders By Davis, Benjamin; Winters, Paul; Kirk, Angeli; Carletto, Calogero
  5. Characterisation of biodiversity in improved rubber agroforests in West-Kalimantan, Indonesia. Real and Potential uses for spontaneous plants By S. Diaz-Novellon; E. Penot; M. Arnaud
  6. The Evolving Food Chain: Competitive Effects of Wal-Mart's Entry Into The Supermarket Industry By Michael Noel; Emek Basker
  7. Household Coping in war- and peacetime: cattle sales in Rwanda, 1991-2001 By Marijke Verpoorten
  8. A Malthusian Model for all Seasons: A Theoretical Approach to Labour Input and Labour Surplus in Traditional Agriculture By Paul Sharp; Jacob Weisdorf
  9. Why sharecropping? : explaining its presence and absence in Europe's vineyards, 1750-1950 By Juan Carmona; James Simpson
  10. The challenge of meeting the future food needs By HUBERT Marie-Hélène; MOREAUX Michel
  11. Estimating Environmental Benefits of Natural Hazard Mitigation with Benefit Transfer: Results from a Benefit-Cost Analysis of FEMA Hazard Mitigation Grants By John C. Whitehead; Adam Z. Rose
  12. Managing uncertainty: Hierarchies, Markets and "Networks" in the Russian Timber Industry. 1991-1998 By Lehmbruch, Barbara
  13. Bidding behavior in sequential cattle auctions By Christine Zulehner
  14. Sovereign natural disaster insurance for developing countries : a paradigm shift in catastrophe risk financing By Mahul, Olivier; Ghesquiere, Francis

  1. By: Finger, Robert
    Abstract: We analyze trends in yield growth and yield variability of barley, maize, oats, rye, triticale and wheat in Switzerland from 1961 to 2006. In contrast to linear trends in crop yield growth for most European countries we find significant trends of slowing yield growth for cereal yields in Switzerland. This is caused by the introduction of direct payment schemes that foster environmentally friendly crop farming practices in general and extensive cereal farming in particular. The recently introduced reform of common agricultural policy in the European Union will foster higher shares of reduced input, i.e. extensive, farming. Thus, the saturation of cereal yield growth in Switzerland might indicate future development of crop yields in the European Union.
    Keywords: cereal yields; cross-compliance; direct payments; robust regression; technological development; crop yield trends; crop yield variability
    JEL: Q56 Q28 Q16 Q18
    Date: 2007–09
  2. By: Anderson, Kym; Lloyd, Peter J; Maclaren, Donald
    Abstract: Australia’s lacklustre economic growth performance in the first four decades following World War II was in part due to an anti-trade, anti-primary sector bias in government assistance policies. This paper provides new annual estimates of the extent of those biases since 1946 and their gradual phase-out during the past two decades. In doing so it reveals that the timing of the sectoral assistance cuts was such as sometimes to improve but sometimes to worsen the distortions to incentives faced by farmers. Also, the changes increased the variation of assistance rates within agriculture during the 1950s and 1960s, reducing the welfare contribution of those programs in that period. While the assistance pattern within agriculture appears not to have been strongly biased against exporters, its reform has coincided with a substantial increase in export orientation of many farm industries. The overall pattern for Australia is contrasted with that revealed by comparable new estimates for other high-income countries.
    Keywords: agricultural assistance; Distorted incentives; manufacturing protection; trade policy reform
    JEL: F13 F14 Q17 Q18
    Date: 2007–08
  3. By: Eric Penot (INNOVATION - Changement technique, apprentissage et coordination dans l'agriculture et l'agroalimentaire - [CIRAD : UMR85])
    Abstract: The aim of this chapter is to describe changes in the Indonesian jungle rubber system from the angle of the production of innovation by farmers themselves (indigenous knowledge) and the process of integration of external technical innovations in an overall process of creation of innovation. In other words, the integration of indigenous knowledge at different stages of history with rubber has enabled, and continues to enable farmers to rely on the sustainable cropping and farming systems represented by agroforestry systems.
    Keywords: shifting agriculture ; complex agroforestry systems ; jungle rubber ; rubber ; adoption of innovations
    Date: 2007–09–19
  4. By: Davis, Benjamin; Winters, Paul; Kirk, Angeli; Carletto, Calogero
    Abstract: This paper uses a duration analysis based on adoption data spanning more than 25 years from six communities in the Central Highlands of Guatemala. The analysis explores how household characteristics and external trends play into both the adoption and diffusion processes of non-traditional exports among smallholders. Adoption was initially widespread and rapid, which led nontraditional exports to be hailed as a pro-poor success, reaching all but the smallest landholders. However, over time more than two-thirds of adopters eventually dropped out of production of nontraditional exports. Based on the analysis, production of nontraditional exports appears to have delivered less prosperity to adopters than initially promised. Although smallholders may be enticed into entering into nontraditional exports markets when conditions are favorable, they may lack the capacity to overcome the difficulties that inevitably arise in complex types of cultivations and in highly variable global agricultural markets. Governmental and non-governmental organizations can attempt to mitigate these difficulties, but market forces may overwhelm their efforts, with some adopters still unable to compete in global markets.
    Keywords: Access to Finance,Rural Development Knowledge & Information Systems,Economic Theory & Research,Markets and Market Access,Rural Poverty Reduction
    Date: 2007–09–01
  5. By: S. Diaz-Novellon (CNEARC - Centre national de recherche en agronomie des régions chaudes - [SUPAGRO IRC]); E. Penot (UMR 85 - Innovation - [CIRAD : UMR85] - [CNEARC]); M. Arnaud (UMR 85 - Innovation - [CIRAD : UMR85] - [CNEARC])
    Abstract: Since the introduction of rubber at the turn of the 20th century smallholders have developed an original complex agroforestry system called jungle rubber in which non selected young rubber trees (seedlings) are managed extensively alongside secondary forest re-growth. The issue of improving smallholder rubber productivity at affordable capital investments and levels of inputs while maintaining the environmental benefits of jungle rubber has been addressed by the Smallholder Rubber Agroforestry Project (SRAP: a joint project run by ICRAF, GAPKINDO and CIRAD). In 1995-1996, 27 trials (with a total of 100 plots) were set up in three provinces in Indonesia to assess the possibility of associating clonal rubber with agroforestry practices under smallholder conditions (Penot, 1997). Two RAS types were selected for this study: RAS n° 1 and n° 3. RAS n° 1 is basically improved jungle rubber using clonal planting material (see a description of RAS types in annexe 1). The rubber trees are in competition with spontaneous vegetation in the inter-row but results show that there are no negative consequences for rubber growth during the immature period. RAS n° 3 was designed for areas infested by Imperata cylindrica, with the establishment of shrubby leguminous cover crops and fast-growing tree species in the inter-rows with the aim of shading out weeds. The other type, RAS n° 2, is based on intercropping clonal rubber with various annual and perennial crops, including fruit and timber trees (Penot et al, 1994). In all cases, RAS have a planting density of 550 clonal rubber trees/ha and a variable number of associated fruit, timber or fast growing shade trees (from 92 to 256/ha). In addition to the RAS experimental plots, “RAS sendiri” (or “endogenous RAS”) are rubber agroforests improved by farmers without outside assistance. The district of Sanggau in the province of West Kalimantan was identified by SRAP as representative of traditional jungle-rubber-based local farming systems that have developed over the last 90 years. The district of Sanggau is located in the central area of the Kapuas river basin, between 1° N and 0°6’ S and 09°8’ W and 11°33’ E. The district covers 18 302 km2, i.e. 13 % of the province. The trial plots described in this study are located in the villages of Embaong, Engkayu, Kopar, and Trimulia (the last being in the transmigration area). Most soils in the province of West-Kalimantan are acrisoils associated with ferralitic soils. Such soils have relatively good physical characteristics but poor chemical value and become acid. Rubber is widely grown in this area as it can grow in poor soils. The landscape is dominated by logged-over forest, secondary forest and a mosaic of jungle rubber and fallow with secondary forest re-growth. Large scale logging activities took place from 1950s to the 1980s at the expense of primary forest. At present, forested areas are located in hilly or remote areas and are very limited in extent. Oil palm and Acacia mangium plantations developed exponentially in the 1990s increasing the conversion of degraded forest areas into Estates that cultivate perennial crops. The main objective of this study is to assess existing plant biodiversity in RAS systems compared to that of jungle rubber. The second objective is to review the current uses of certain plants and their market potential.
    Date: 2007–09–17
  6. By: Michael Noel (Department of Economics, University of California - San Diego); Emek Basker (University of Missouri)
    Abstract: We analyze the effect of Wal-Mart's entry into the grocery market using a unique stor-level price panel data set. We use OLS and two IV specifications to estimate the effect of Wal-Mart's entry on competitors' prices of 24 grocery items across several categories. Wal-Mart's price advantage over competitors for these products averages approximately 10%. On average, competitors' response to Wal-Mart's entry is a price reduction of 1-1.2%, mostly due to smaller-scale competitors: the response of the "big three" supermarket chains (Alberson's, Safeway, and Kroger) is less than half that size. We confirm our results using a falsification exercises, in which we test for Wal-Mart's 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,
    Date: 2007–06–01
  7. By: Marijke Verpoorten
    Abstract: The economic literature has given due attention to household coping strategies in peacetime. In contrast, little is known about such strategies in wartime. This paper studies the use of cattle as a buffer stock by Rwandan households during 1991-2001, a period characterized by civil war and genocide. It is found that the probability of selling cattle increases upon the occurrence of both peacetime and wartime covariant adverse income shocks. The peacetime cattle sales are largely explained by shifts in the household asset portfolio. In contrast, in 1994, the year of the genocide, almost half of the cattle sales were motivated by the need to buy food. However, we argue that the effectiveness of this coping strategy was severely reduced due to the wartime conditions. First, during the year of ethnic violence, cattle prices plummeted to less than half of their pre-genocide value. Second, we find that households most targeted in the violence did not sell cattle. We discuss several explanations for this latter finding.
    Keywords: Coping Strategies, Buffer Stock Model, Cattle, Violent Conflict, Rwanda
    JEL: D12 D91 O12
    Date: 2007
  8. By: Paul Sharp (Department of Economics, University of Copenhagen); Jacob Weisdorf (Department of Economics, University of Copenhagen)
    Abstract: It has become popular to argue (e.g. Clark 2007) that all societies were Malthusian until about 1800. At the same time, the phenomenon of surplus labour is well-documented for historical (as well as modern) pre-industrial societies. This study discusses the paradox of surplus labour in a Malthusian economy. Inspired by the work of Boserup (1965) and others, and in contrast to the Lewis (1954) approach, we suggest that the phenomenon of surplus labour is best understood through an acceptance of the importance of seasonality in agriculture. Boserup observed that the harvest season was invariably associated with labour shortages (the high-season bottleneck on production), although there might be labour surplus during the low season. We introduce the concept of seasonality into a stylized Malthusian model, and endogenize the extent of agricultural labour input, which is then used to calculate labour surplus and the rate of labour productivity. We observe the effects of season-specific technological progress, and find that technological progress in the low-season increases labour surplus and labour productivity whilst, perhaps surprisingly, technological progress in the high-season, by relaxing the high-season bottleneck, leads to work intensification and a drop in labour surplus and labour productivity.
    Keywords: Boserup; labour productivity; labour surplus; land productivity; Malthus; seasonality
    JEL: J22 N13 O10
    Date: 2007–09
  9. By: Juan Carmona; James Simpson
    Abstract: The traditional view that sharecropping was a cause of low productivity in European agriculture prior to the Second World War has been challenged by economic historians, and today the contact is often considered as efficient at reducing the monitoring costs associated with labour and allocation of risk between landowners and farmers, especially when capital markets were weak for working capital. Yet if sharecropping was a relatively efficient contract, why was it not found more often? This paper looks at the vine, a crop that was widespread in Europe and that has been central to the current debates. It argues that while the literature has been right to emphasise the importance of the high monitoring costs, it has ignored the equally important costs associated with dividing the harvest. These were sufficiently large to make the contract unattractive, except in the few cases where the landowner was prepared to be actively involved in wine making and its sale, such as was found in Beaujolais or Tuscany.
    Date: 2007–07
  10. By: HUBERT Marie-Hélène (LERNA, TSE); MOREAUX Michel (LERNA, TSE)
    Date: 2007–08
  11. By: John C. Whitehead; Adam Z. Rose
    Abstract: This paper summarizes methods, data, and results associated with the first major attempt to evaluate the environmental benefits of FEMA natural hazards mitigation grants. The study relied heavily on the refinement of benefit transfer methods. Categories of benefits include water quality for recreational and commercial fishing, drinking water, outdoor recreation, hazardous waste, wetlands and aesthetic, health and safety benefits. Environmental and historic benefits proved to be a very minor proportion of the total benefits in dollar terms. Only a very small percentage of earthquake and wind-related hazards yielded environmental benefits, while a sizeable percentage of flood hazard grants did so. We also discuss the prospects that environmental benefits might have been much greater had data been available to analyze more environmental impacts. Key Words: Natural Hazard Mitigation, Environmental Benefits
    Date: 2007
  12. By: Lehmbruch, Barbara (BOFIT)
    Abstract: The paper investigates institutional development in the Russian forestry sector after 1991. As it argues, while there has been a great degree of decentralization, original market-oriented reform blueprints for the industry were only partially implemented. The reasons for this can be found largely in the failure of weak state institutions to standardize and universalize transactions. Attempts to restore top-down, Moscow-centered branch administration in the form of a state committee have equally failed. The paper asks how best to describe the highly personalistic transactional landscape that has emerged from the failure of hierarchies and markets. It argues that there is little evidence of “clan”-style “directors’ networks” based on direct personal trust. Rather, economic actors prefer a two-pronged strategy of dealing with environmental uncertainty: While attempting to minimize environmental exposure by establishing forms of vertical integration, they also they hedge their exposure by maintaining multiple, often loose outside affiliations. This, it is argued, applies to both the horizontal, business-to-business level and to vertical clientelistic relations with state actors.
    Keywords: Russia; timber industry; organizations
    Date: 2007–09–14
  13. By: Christine Zulehner
    Abstract: The objectives of this study are to investigate the institutional speci¯cs of sequential cattle auctions and their role as determinants of prices. Institutional speci¯cs are the order of sale according to quality, a secret reserve price, bidders' multi-unit demand and di®erent types of bidders. Prices decline and bidders with a higher demand pay on average lower prices. The estimation results show that declining prices are caused by the order of sale according to quality and the secret reserve price. The results further show that bidders take the strategic e®ect of sequential auctions and multi-unit demand into account.
    JEL: D44 Q12
    Date: 2007–09
  14. By: Mahul, Olivier; Ghesquiere, Francis
    Abstract: Economic theory suggests that countries should ignore uncertainty for public investment and behave as if indifferent to risk because they can pool risks to a much greater extent than private investors can. This paper discusses the general economic theory in the case of developing countries. The analysis identifies several cases where the government ' s risk-neutral assumption does not hold, thus making rational the use of ex ante risk financing instruments, including sovereign insurance. The paper discusses the optimal level of sovereign insurance. It argues that, because sovereign insurance is usually more expensive than post-disaster financing, it should mainly cover immediate needs, while long-term expenditures should be financed through post-disaster financing (including ex post borrowing and tax increases). In other words, sovereign insurance should not aim at financing the long-term resource gap, but only the short-term liquidity need.
    Keywords: Debt Markets,Hazard Risk Management,Banks & Banking Reform,Insurance & Risk Mitigation,Natural Disasters
    Date: 2007–09–01

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