New Economics Papers
on Agricultural Economics
Issue of 2007‒10‒20
seventeen papers chosen by

  1. Formation of SEZ, Agricultural Productivity and Urban Unemployment By Chaudhuri, Sarbajit; Yabuuchi, Shigemi
  2. Credit Risk Models for Managing Bank’s Agricultural Loan Portfolio By Bandyopadhyay, Arindam
  3. The Value of Scarce Water: Measuring the Inefficiency of Municipal Regulations By Erin T. Mansur; Sheila M. Olmstead
  4. Environmental lobbying with imperfect monitoring of environmental quality By Beard, Rodney; Mallawaarachchi, Thilak; Salerno, Gillian
  5. Rent seeking, interest groups and environmental lobbying: Cane Farmers versus Great Barrier Reef Protectionists By Beard, Rodney
  6. Traditional Natural Resources Management Practices and Biodiversity Conservation in Ghana: A Review of Local Concepts and Issues on Change and Sustainability By Paul Sarfo-Mensah; W. Oduro
  7. Welfare and Distribution Effects of Water Pricing Policies By Arjan Ruijs
  8. The Rule of The Jungle in Pakistan: A Case Study on Corruption and Forest Management in Swat By Lorenzo Pellegrini
  9. Food Security and Biofuels Development: The Case of China By Fengxia Dong
  10. Gastos Públicos em Agricultura: retrospectiva e prioridades By José Garcia Gasques; Carlos Monteiro Villa Verde; Eliana Teles Bastos
  11. An Open Mind Wants More: Opinion Strength and the Desire for Genetically Modified Food Labeling Policy By Sonja Radas; Mario Teisl
  12. Long-Run Effects of BSE on Meat Consumption By Adam Bialowas; Lisa Farrell; Mark N. Harris; Cain Polidano
  13. Trip-Level Analysis of Efficiency Changes in Oregon’s Deepwater Trawl Fishery By David Tomberlin; Garth Holloway
  14. The global wine market in the decade to 2015 with a focus on Australia and Chile By Glyn Wittwer
  15. Overweight in Adolescents: Implications for Health Expenditures By Alan C. Monheit; Jessica P. Vistnes; Jeannette A. Rogowski
  16. The Impact of Tax Reforms Designed to Encourage a Healthier Grain Consumption By Nordström, Jonas; Thunström, Linda
  17. Rational Ignorance and Negative News in the Information Market By Jill McCluskey; Johan F.M. Swinnen

  1. By: Chaudhuri, Sarbajit; Yabuuchi, Shigemi
    Abstract: Formation of SEZ using agricultural land to promote industrialization has recently been one of most controversial policy issues in many developing economies including India. This paper critically theoretically evaluates the consequences of this policy in terms of a three-sector Harris-Todaro type general equilibrium model reasonable for a developing economy. It finds that agriculture and SEZ can grow simultaneously provided the government spends more than a critical amount on irrigation projects and other infrastructural development designed for improving the efficiency of land. Agricultural wage and aggregate employment in the economy may also improve.
    Keywords: Special economic zone; fiscal concessions; agricultural productivity; rural wage; urban unemployment.
    JEL: R14 H54 R13
    Date: 2007–10–11
  2. By: Bandyopadhyay, Arindam
    Abstract: In this paper, we have developed a credit scoring model for agricultural loan portfolio of a large Public Sector Bank in India and suggest how such model would help the Bank to mitigate risk in Agricultural lending. The logistic model developed in this study reflects major risk characteristics of Indian agricultural sector, loans and borrowers and designed to be consistent with Basel II, including consideration given to forecasting accuracy and model applicability. In this study, we have shown how agricultural exposures are typically can be managed on a portfolio basis which will not only enable the bank to diversify the risk and optimize the profit in the business, but also will strengthen banker-borrower relationship and enables the bank to expand its reach to farmers because of transparency in loan decision making process.
    Keywords: Credit Risk Modelling; Lending; Agriculture
    JEL: G21 C53 Q14
    Date: 2007–10–12
  3. By: Erin T. Mansur; Sheila M. Olmstead
    Abstract: Rather than allowing water prices to reflect scarcity rents during periods of drought-induced excess demand, policy makers have mandated command-and-control approaches, like the curtailment of certain uses, primarily outdoor watering. Using unique panel data on residential end-uses of water, we examine the welfare implications of typical drought policies. Using price variation across and within markets, we identify end-use specific price elasticities. Our results suggest that current policies target water uses that households, themselves, are most willing to forgo. Nevertheless, we find that use restrictions have costly welfare implications, primarily due to household heterogeneity in willingness-to-pay for scarce water.
    JEL: L51 L95 Q25 Q28 Q58
    Date: 2007–10
  4. By: Beard, Rodney; Mallawaarachchi, Thilak; Salerno, Gillian
    Abstract: In this paper we present a two stage game of political lobbying for policies designed to enhance environmental quality. Unlike previous work which has tended to assume perfect monitoring of environmental quality in lobbying games we allow for imperfect monitoring of environmental quality. We characterize perfect public (politico-economic) equilibria in the game for the case of both perfect and imperfect monitoring of environmental quality and compare these with imperfect private monitoring of environmental quality. Results are discussed with respect to farmer behaviour in the context of non-point source pollution and implications for the political consequences of farm extension programmes highlighted.
    Keywords: Game theory; public choice; imperfect public monitoring; imperfect private monitoring; non-point source pollution; agricultural extension and public education
    JEL: Q5 Q1 C73
    Date: 2007–02
  5. By: Beard, Rodney
    Abstract: In this paper an interest group model of rent seeking behaviour between sugarcane farmers and environmental protectionists is developed. The motivation for this scenario comes from the debate over fertilizer run-off and its possible impact on Queensland’s Great Barrier Reef. The paper takes Gordon Tullock’s rent-seeking model and applies it to the bargaining process over controls on fertilizer application in an effort to learn something about the likely political outcomes of this debate.
    Keywords: Public choice; Environmental economics; Agricultural policy
    JEL: Q18 Q58 Q53
    Date: 2007–10
  6. By: Paul Sarfo-Mensah (Kwame Nkrumah University of Science); W. Oduro (Wildlife and Range Management)
    Abstract: This paper reviews the importance of traditional natural resources management practices in Ghana. It highlights the roles of traditional beliefs, taboos and rituals in the management and conservation of key natural resources in the country. The paper is based on desk studies undertaken as part of anthropological studies conducted in the forest-savanna transitional agroecological zone of Ghana to study the spirituality of forests and conservation. Among the major conclusions of the paper is that although the potential of traditional natural resources management for biodiversity conservation in Ghana is enormous, the sustainability of these practices is seriously threatened. This stems from the rapid changes in the belief systems. Both biophysical and socio-economic factors were found to underlie these changes. The breakdown of traditional beliefs and associated taboos which underpin traditional natural resources management practices were found to be the greatest threat to the sustainability of these practices. The paper recommends that more anthropological research should investigate local perceptions of forest space and landscape, biodiversity conservation and traditional beliefs, and their significance for natural resources management. Such studies would provide valuable insights into the changing values of local people in relation to protected areas such as sacred groves and forest reserves and the management of other natural resources.
    Keywords: Forest –Savanna Transition, Sacred Groves, Traditional Beliefs, Biodiversity Conservation, Change and Sustainability
    JEL: Q2 Q57
    Date: 2007–09
  7. By: Arjan Ruijs (Wageningen University)
    Abstract: In this paper, distribution and welfare effects of changes in block price systems are evaluated. A method is discussed to determine, for a Marshallian demand function, equivalent variation in case of a block price system. The method is applied to analyze welfare and distribution effects of changing water prices in the Metropolitan Region of São Paulo. Results show that there is a trade off between average welfare and income distribution. A pro-poor price system may result in lower average welfare than a flat price system, but in higher individual welfare for the poor. Moreover, there is a trade off between revenues for the water company and income distribution. Even though pro-poor price systems may not be as good for average welfare as flat price systems, their direct effects on poverty are important. Introducing pro-poor price systems, however, may have financial consequences for the water companies.
    Keywords: Water Demand, Welfare Economics, Equivalent Variation
    JEL: D63 Q25 Q56
    Date: 2007–09
  8. By: Lorenzo Pellegrini (Institute of Social Studies (ISS))
    Abstract: Corruption in the forest sector of Swat, Pakistan is impairing the sustainable management of forest. We analyze corruption in a case study setting against the backdrop of the reform options that are most often cited as possible solutions. As we highlight in this study, the ‘crime and punishment’ approach is not feasibly implemented if the overall institutional environment is weak. Since countrywide overhaul of corruption through sweeping reform programs, the other reform approach, is a difficult and lengthy task, there is a need for an alternative kind of reform. In the case of a corruption-ridden centralised forest management regime, institutional reform should move away from enforcement of existing institutions and promote communal management of natural resources by locals.
    Keywords: Corruption, Forest Management, Environmental Policy, Institutional Reform
    JEL: D73 Q24 Q57
    Date: 2007–09
  9. By: Fengxia Dong (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI))
    Abstract: Biofuels production is expanding rapidly all over the world, driven by rising crude oil prices, the desire of countries to be energy independent, and concerns about climate change. As developed countries, especially the United States, are expanding biofuels production, developing countries are expanding their biofuels industries as well, to power their growing economies. However, developing countries must address the food security issue when they develop biofuels. As China is a developing country with rapid economic growth, population growth, significant demand for fuels, and food security concerns, it serves as a good example for studying the opportunities and challenges faced by developing countries under current conditions. This study analyzes the background, history, and current situation of biofuels development in China. Some implications for developing countries are also provided.
    Keywords: biofuels, food security, China.
    Date: 2007–10
  10. By: José Garcia Gasques; Carlos Monteiro Villa Verde; Eliana Teles Bastos
    Abstract: This paper aims to recast public expenditure on agriculture and the costs allocated to several aspects of agrarian organization, also indicating how the government has spent during 1980 and 2005 vis-à-vis trade, rural credit, agrarian politics, and research & development (R&D). Methodologically, we go over a series of public expenditure analyses presented in previous papers adopting the same methodology throughout the years. We conclude that expenditure was focused in a few secondary functions and in a reduced number of programs. In 2005, 88% of the total budget for agriculture was concentrated on only four programs. Several key programs on productivity, sustainability, training, and research, among others, received almost no funding. Estimates on governmental spending on farmers` debt renegotiation show overvalued costs in relation to what had been previously contracted. During 1988 and 2005, the Union`s expenditure with debt management amounted to R$ 22,60 billions. Also of note is that differently from other major countries that have progressively spent more on R&D in the last decades, Brazil has shown considerable reductions in spending in this area. During 2003 and 2005, Embrapa, the leading research center in agriculture in Brazil, has had a 14% cut in its total budget.
    Date: 2006–10
  11. By: Sonja Radas; Mario Teisl (The Institute of Economics, Zagreb)
    Abstract: There are two opposing viewpoints regarding consumers' acceptance of genetically modified (GM) foods and their desire for the labeling of these foods. Some suggest consumers are unconcerned and do not desire any GM labeling while others indicate the opposite. The mixed results may be because consumers are capable of making finer distinctions than surveys have called for, and appear to have evaluation schemes that are quite sensitive to information about the potential benefits and risks associated with GM foods. Using a mix of statistical approaches, we find consumers are quite different and nuanced in terms of their preferences for GM labeling policy. Consumers with less-defined views require mandatory labeling of the most stringent type and require the most amount of information to be placed on labels. In contrast, consumers with stronger viewpoints (either pro- or con-GM) are more relaxed in their labeling and information requirements.
    Keywords: labeling policy, cluster analysis
    JEL: Q18 M31
    Date: 2007–04
  12. By: Adam Bialowas; Lisa Farrell; Mark N. Harris; Cain Polidano
    Abstract: This paper considers the long-run effects of BSE on meat consumption in the United Kingdom using data from the Expenditure and Food Survey. We estimate a dynamic AIDS demand system of household food consumption, with long-run effects captured via an adstock index of adverse media coverage. The results suggest that there are long-run impacts on meat consumption that extend well beyond the period of the scare. In addition, press articles with pictures have a greater, and more long-lasting effect, on long-run consumption than articles with words alone.
    Keywords: Food health scares, Adstock, BSE, demand systems, meat demand
    JEL: Q10 Q18 D12
    Date: 2007–10
  13. By: David Tomberlin (National Marine Fisheries Service); Garth Holloway (University of Reading)
    Abstract: In 2003, an industry-financed, government-administered buyback of trawl fishing permits and vessels took place on the US West Coast, resulting in the retirement of about one-third of the limited-entry trawl fleet. The lack of cost data in this fishery precludes an analysis of how the buyback has affected profitability, but changes in technical efficiency can provide some insight into the program’s effects. This paper, the first of a planned series of analyses of the buyback’s effect on technical efficiency in the trawl fleet, applies stochastic frontier analysis to assess whether technical efficiency changed perceptibly after 2003. We adopt a hierarchical modeling approach estimated with Markov Chain Monte Carlo methods, and present results from both Cobb-Douglas and translog specifications. The analysis is limited to 13 boats active in Oregon’s deepwater ‘DTS’ fishery, which targets dover sole, thornyheads, and sablefish. The results suggest that the buyback has had little impact on trip-level technical efficiency in the study fishery. However, departures from the frontier are markedly bi-modal, indicating that a mixed-density approach to estimation may be more appropriate.
    Keywords: Fishery Buyback, Technical Efficiency, Stochastic Production Frontier, Bayesian Inference, Markov Chain Monte Carlo
    JEL: Q2 L5 C1
    Date: 2007–09
  14. By: Glyn Wittwer
    Abstract: The share of global wine supplied by New World producers has increased dramatically since the late 1980s. Australia and Chile have emerged as major exporters of wine. USA has also increased production sharply though its sales have grown mainly in the domestic rather than export markets. This paper uses the World Wine Model to project the wine markets of the world from 2005 to 2015. The model includes different types of wine, so as to distinguish the growing premium segment of the market from the non-premium segment. USA is set to become the largest consumer and importer of wine in the world. Hence, growth prospects for wine exporting nations will centre increasingly on the US market. The Chinese market is likely to follow the pattern set by the Japanese market, in which per capita consumption of wine has remained relatively low despite real income growth. Nevertheless, exports to China of non-premium wine will grow over the next decade. Paper prepared for a seminar in Chile in August 2007. Research funded by the Grape and Wine Research and Development Corporation (GWRDC) of Australia.
    Keywords: CGE modelling, wine consumption
    JEL: C68 Q13
    Date: 2007–07
  15. By: Alan C. Monheit; Jessica P. Vistnes; Jeannette A. Rogowski
    Abstract: We consider two compelling research questions raised by the increased prevalence of overweight among adolescents. First, what factors explain variation in adolescent bodyweight and the likelihood of being overweight? Next, do overweight adolescents incur greater health care expenditures compared to those of normal weight? We address the former question by examining the contribution of individual characteristics, economic factors, parental and family attributes, and neighborhood characteristics to variation in these bodyweight outcomes. For the second question, we estimate a two-part, generalized linear model of health spending. Using data from the Medical Expenditure Panel Survey, our econometric analyses indicate that adolescent bodyweight and the likelihood of being overweight are strongly associated with parental bodyweight, parental education, parental smoking behavior, and neighborhood attributes such as the availability of fresh food markets and convenience/snack food outlets, and neighborhood safety and material deprivation. Our expenditure model indicates that overweight females have annual expenditures that exceed those of normal weight by nearly $800 with part of the disparity explained by differences in mental health expenditures. We use both sets of empirical results to draw implications for policies to address adolescent overweight.
    JEL: I1
    Date: 2007–10
  16. By: Nordström, Jonas (Institute of Food and Resource Economics); Thunström, Linda (Department of Economics, Umeå University)
    Abstract: In this paper, we simulate the effects of taxes on products and/or nutrients aimed at encouraging a healthier grain consumption. To carry out the analysis, we use a rich data set on household consumption of grain products, combined with information about the nutritional content of the products. We estimate behavioural parameters that are used to simulate the impact on the average household of different types of tax reforms; entailing either a subsidy on commodities particularly rich in fibre or a subsidy of the fibre density in grain products. Our results suggest that to direct the fibre intake of the average household towards nutritional recommendations, reforms with a substantial impact on consumer prices are required. Our results also imply that subsidizing the fibre density is more cost-efficient than reducing the VAT on commodities rich in fibre. Regardless of the type of subsidy imposed, the increase in the fibre intake is accompanied by unwanted increases in nutrients that are often over consumed; fat, saturated fat, salt and sugar and added sugar. Funding the subsidies by taxing these nutrients, or less healthy commodities, prevents such developments.
    Keywords: Consumer economics; food; health; taxation
    JEL: D12 H23 I18
    Date: 2007–10–08
  17. By: Jill McCluskey; Johan F.M. Swinnen
    Abstract: While the availability of information has increased rapidly, the public is still considered poorly informed. This paper contributes to the emerging field of media economics by studying how the demand side of the media market affects news production and consumption. We show that consumers are likely to remain imperfectly informed on most issues and that negative news coverage is likely to dominate positive news stories because of demand side effects.
    Keywords: Media, bias, rational ignorance, negative news coverage
    JEL: L82 D83
    Date: 2007

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