New Economics Papers
on Agricultural Economics
Issue of 2007‒12‒08
fifteen papers chosen by

  1. what is missing between agricultural growth and infrastructure development ? cases of coffee and dairy in Africa By Smith, James Wilson; Iimi, Atsushi
  2. Why have some Indian states lagged behind the others in improving agriculture sector performance? By Ahuja Vinod; Bhamoriya Vaibhav; Lalit Dipti
  3. Comparing Organic Urban Consumers in Developing and Developed Countries: First Results in Brazil and France By Sirieix, L.; Santiago de Abreu, L.; Aico Watanabe, M.; Kledal, P.R.
  4. Ground Water Management: Need for Sustainable Approach By Menon, Sudha Venu
  6. Evaluating the effects of farm programs: Results from propensity score matching By Andrea Pufahl; Christoph Weiss
  7. Towards a More Holistic Understanding of American Support for Genetically Modified Crops: An Examination of Influential Factors Using a Binomial Dependent Variable By Josephine, Faass; Michael, Lahr
  9. Perceptions of environmental risks in Mozambique : implications for the success of adaptation and coping strategies By Schroter, Dagmar; Patt , Anthony G.
  10. Do Small Farmers Borrow Less when the Lending rate Increases? The Case of Rice Farming in the Philippines By Briones, Roehlano
  11. Cost stickiness revisited: Empirical aplication for farms By Josep Maria Argiles Bosch; Josep Garcia Blandon
  12. Coordinating to Eradicate Animal Disease, and the Role of Insurance Markets By Hennessy, David A.
  13. Labor Supply Decisions of Rural Low-Income Mothers By Sheila Mammen; Daniel Lass; Sharon B. Seiling
  14. When and Why Does it Pay to be Green? By Paul Lanoie; Stefan Ambec; Iain Scott
  15. Meta-Functional Benefit Transfer for Wetland Valuation: Making the Most of Small Samples By Klaus Moeltner; Richard T. Woodward

  1. By: Smith, James Wilson; Iimi, Atsushi
    Abstract: Although it is commonly believed that aggregate economic growth must be associated with public infrastructure stocks, the possible infrastructure needs and effects are different from industry to industry. The agriculture sector is typical. Various infrastructures would affect agriculture growth differently depending on the type of commodity. This paper finds that a general transport network is essential to promote coffee and cocoa production, perhaps along with irrigation facilities, depending on local rainfall. Conversely, along with the transport network, the dairy industry necessitates rural water supply services as well. In some African countries, a 1 percent improvement in these key aspects of infrastructure could raise GDP by about 0.1-0.4 percent, and by possibly by several percent in some cases.
    Keywords: Transport Economics Policy & Planning,Economic Theory & Research,Crops & Crop Management Systems,Food & Beverage Industry,Rural Development Knowledge & Information Systems
    Date: 2007–11–01
  2. By: Ahuja Vinod; Bhamoriya Vaibhav; Lalit Dipti
    Abstract: While India has sustained annual GDP growth rate of over 6 percent over the last more than two decades, the distribution of this growth across various regions of the country has been highly uneven with significant year-to-year variations. Improving agricultural performance is critical to sustaining future economic growth and continued poverty reduction. As the country moves forward towards identifying newer ways of improving farm competitiveness, it is important to recognize that agriculture in India is extremely heterogeneous and the trajectory for agricultural development will be significantly influenced by area specific (i) natural endowments, (ii) access to markets, and (iii) overall policy and institutional environment. In the light of that motivation, this paper examines the differences in above sets of variables across four different categories of states ranked by per capita income and attempts to outline the strategic options to address these constraints. The paper argues that the challenge of accelerating agricultural growth in these poor states can not be met without public investment in irrigation, research and extensions, enhanced credit flow and improved delivery systems for improved seeds. It is further argued that while paying careful attention to public investment in agriculture, it must also be understood that the problems of agriculture will not be solved only through on-farm investment. Non-farm activity is essential for farmer prosperity. Non-farm activities tend to have the greater proportional impact on the income of poorest members of the village. But, this requires adequate social and physical infrastructure to ensure that the rural non-farm sector has the capacity to adjust and modernize in response to conditions brought about by increasing competition, and changing demands from consumers. Broadly, therefore, agricultural growth strategy has to work towards (i) establishing a healthy investment climate to encourage entrepreneurial action in commodities and value chains, (ii) support human resource development through improved quality and access to social services, and (iii) strengthen agricultural technology support services.
    Date: 2007–12–03
  3. By: Sirieix, L.; Santiago de Abreu, L.; Aico Watanabe, M.; Kledal, P.R.
    Abstract: Despite numerous studies reporting on sustainable consumption or organic consumer profiles, there is a gap in thorough understanding of organic consumers in different places, since most of studies only investigate organic consumption in most developed countries. The goal of this paper is thus to compare French and Brazilian organic consumers, so as to know if people think and behave differently or similarly in different places. Individual interviews were conducted in each country, with consumers in organic producers market in Brazil, and consumers who buy organic products from farmers markets or local organic food network in France. Products were selected to cover examples of different choice situations such as imported organic products that compete with comparable products of local origin, or organic local products in supermarkets that compete with similar products from other distribution outlets. Results show common consumer concerns such as quality or personal and family health, and common preference for local and organic products but for different reasons. However, results also shed light on different patterns related to environmental concerns or commitment to supporting small or local farmers. The impacts of the findings of this study relate to a diversity of topics such as social mobilization for sustainable agriculture, local organic food networks and environmental concerns. ...French Abstract : De nombreuses recherches portent sur la consommation durable et le profil des consommateurs de produits biologiques, mais ces recherches portent sur la consommation dans les pays développés, et ne permettent pas de savoir s'il existe des différences de consommation entre pays développés et pays en développement. Le but de cet article est de comparer le comportement de consommateurs de produits biologiques en France et au Brésil, sur la base d'entretiens individuels permettant de comparer plusieurs situations de choix : produits biologiques importés en concurrence avec des produits locaux comparables, produits biologiques locaux disponibles en supermarché ou d'en d'autres circuits de distribution,... Les résultats mettent en évidence des attentes communes, comme la qualité ou la santé, et des préférences partagées pour les produits biologiques et locaux, mais pour des raisons différentes dans les deux échantillons. Les résultats montrent également que l'importance accordée aux préoccupations environnementales et au soutien aux petits producteurs locaux n'est pas la même dans les deux échantillons. Cette recherche conduit à des pistes de réflexion portant sur la mobilisation des consommateurs pour la consommation durable, les réseaux de production et consommation de produits biologiques et les préoccupations environnementales des consommateurs.
    JEL: D1 D8 M31 Q01
    Date: 2007
  4. By: Menon, Sudha Venu
    Abstract: Groundwater constitutes about 89% of the total fresh water resources in the planet. But in recent years, due to over exploitation of ground water and erratic nature of monsoon, there has been depletion of ground water across the world. Depletion of ground water has reached to the extent that it is virtually impossible to get the water table back. Even though there is a possibility of recharge of water from the other areas, the process is very slow and may take one year to replenish one meter. In view of this management of ground water has become one of the most significant issues in recent times. Added to it, there are also environmental problems such as aqua for mining, salt water intrusion, stream base flow reduction etc. For several reasons the efficient management of ground water resources through market mechanism has become difficult. Against this context the present article attempts to analyze the need for sustainable ground water management in India. The article also briefly discusses the concept of sustainable ground water management, factors affecting ground water availability, different approaches towards developing and using available ground water with out adversely affecting the hydro-geological balance. Further, the paper highlights strategies for sustainable groundwater management, including development of aquifers, rainwater harvesting and artificial recharge methods. The article offers some relevant policy recommendations for sustainable groundwater management in India.
    Keywords: Ground water; India; Water
    JEL: Q25
    Date: 2007–10–15
  5. By: Dr. Adya Prasad Pandey, Adya Prasad Pandey
    Abstract: Indian sugar industry, second largest agro-based processing industry afte the cotton textiles industry in country, has a lion's share in accelerating industrialization process and bringing socio-economic changes in under developed rural areas. Sugar industry covers around 7.5% of total rural population and provides employment to 5 lakh rural people. About 4.5 crore farmers are engaged in sugarcane cultivation in Inda. Sugar mills (cooperative, private, and public) have been instrumental in initiating a number of entrepreneurial activities in rural India. Present paper is an attempt as to review progress of sugar industry in India, understand it's problems and challenges in context of ongoing liberalization process. Indian sugar industry can be a global leader provided it comes out of the vicious cycle of shortage and surplus of sugarcane, lower sugarcane yield, lower sugar recovery, ever increasing production costs and mounting losses. It needs quality management at all levels of activity to enhance productivity and production. Attention is required on cost minimization and undertaking by product processing activities.
    Keywords: Indian Sugar industry ; Sugar ; Adya Prasad Pandey
    JEL: A1 A10
    Date: 2007–12–03
  6. By: Andrea Pufahl (Federal Agricultural Research Center, Institute of Rural Studies, Braunschweig, Germany); Christoph Weiss (Department of Economics, Vienna University of Economics & B.A.)
    Abstract: The paper applies a non-parametric propensity score matching approach to evaluate the effects of two types of farm programs (agri-environment (AE) programs and the less favoured area (LFA) scheme) on input use and farm output of individual farms in Germany. The analysis reveals a positive and significant treatment effect of the LFA scheme for farm sales and the area under cultivation. Participants in AE schemes are found to significantly increase the area under cultivation (in particular grassland), resulting in a decrease of livestock densities. Furthermore, participation in AE programs significantly reduced the purchase of farm chemicals (fertilizer, pesticide). We also find substantial differences in the treatment effect between individual farms (heterogeneous treatment effects). Farms which can generate the largest benefit from the program are most likely to participate.
    JEL: Q12 Q18 C21
    Date: 2007–11
  7. By: Josephine, Faass; Michael, Lahr
    Abstract: This paper is an investigation into the relative importance of a wide variety of factors in influencing whether members of the American public support or oppose the use of biotechnology in agriculture and food production. To accomplish this end, as well as to facilitate the examination of a large number of independent variables simultaneously, several statistical methods, including factor analyses, instrumental variables analysis, and probit and logistic regressions were performed. It was determined that people’s perceptions of risks and moral acceptability were important contributors to opinion formation in this regard. The effects of expected benefits, feelings of trust in information, and knowledge about biotechnology and genetics, were also investigated and found to exert varying levels of influence depending on the identity of the expected beneficiary or information source, as well as the kind of knowledge under consideration. The roles of religious and political party affiliation were also examined and determined to be significant.
    Keywords: genetically modified foods; biotechnology; public opinion
    JEL: H0 Q18
    Date: 2007–02–06
  8. By: Dr. Adya Prasad Pandey, Adya Prasad Pandey; Shivesh , Shivesh
    Abstract: In a predominantly agricultural country like India, women play distinctive role in rural economic activities in earning a livelihood for the family. Except in the case of rich landowners and the upper castes, women of other categories are engaged in both the production and marketing of products of agriculture and handicrafts, women of these categories also combine household work with these activities. Because of the complexities of the role of women in different types of work, it is very difficult to examine the women’s contribution to family income through available employment statistics. There are almost intractable problems of definition as to what constitutes ‘employment’ and ‘work’ and as to who is as out to be over-simplistic and does not reflect the complexities of the situation. Until employment statistics relating to women are made more refined and meaningful, we are left with no option but to do the best we can with the available ones. In order to examine gender dimensions within and income earnings in India, the context of gendered participation of female labour supplies in its entirety needs to the accounted for. The dimensions affecting pre-entry conditions that influence capabilities, human capital traits and labour supply characteristics; aspects of in-market discriminations and gender biases against women in terms of hiring, promotion, segregation, gender relations and remunerations; and factors influencing women’s work time distribution among paid and unpaid activities, own and hired labour, extended activi8ties of household maintenance, care-giving, socially derived, traditional roles and sexual division of labour that influences the different agents of the labour markets have to be explored to understand the nature of gender-based wage differentials in India. The present paper highlights the wage and income differentials on the basis of gender in the Indian agriculture.
    Keywords: wage; Income differential ;gender; india Agriculture income diffrentials
    JEL: Q1
    Date: 2007–12–12
  9. By: Schroter, Dagmar; Patt , Anthony G.
    Abstract: Policies to promote adaptation climate risks often rely on the willing cooperation of the intended beneficiaries. If these beneficiaries disagree with policy makers and programme managers about the need for adaptation, or the effectiveness of the measures they are being asked to undertake, then implementation of the policies will fail. A case study of a resettlement programme in Mozambique shows this to be the case. Farmers and policy-maker disagreed about the seriousness of climate risks, and the potential negative consequences of proposed adaptive measures. A project to provide more information about climate change to farmers did not change their beliefs. The results highlight the need for active dialog across stakeholder groups, as a necessary condition for formulating policies that can then be successfully implemented.
    Keywords: Hazard Risk Management,Environmental Economics & Policies,Climate Change,Population Policies,Rural Poverty Reduction
    Date: 2007–11–01
  10. By: Briones, Roehlano
    Abstract: The new generation of credit programs directed at small borrowers emphasizes financial sustainability. Based on anecdotal information (especially from microfinance experiences), proponents of cost recovery claim that raising formal lending rates would have a minimal impact on borrowing. Rigorous evidence for this conjecture is however sparse. This study conducts an econometric test of this conjecture using data from a survey of small rice farmers from the Philippines. Alternative regression techniques tend to reject the conjecture; in particular, a regression that controls for selection effects shows a unitary elastic response of formal borrowing to the lending rate.
    Keywords: credit demand; interest elasticity; rural credit; credit policy; Philippines; Asia
    JEL: O16 Q14
    Date: 2007
  11. By: Josep Maria Argiles Bosch; Josep Garcia Blandon (Universitat de Barcelona)
    Abstract: This article reviews previous research regarding cost stickiness and performs an empirical analysis applied to a sample of farms. It recognizes that modelization of cost stickiness is a particular case of representation of cost variations as a function of output variations. It also discusses methodological issues and analyses cost stickiness for all registered farm costs and opportunity costs of family work. Costs exhibit a considerable level of rigidity. Even for variable costs, a decrease in activity involves a lower decrease in costs than the amounts involved when activity increases. While registered indirect costs slightly decrease when activity decreases, opportunity costs always increase. The study provides empirical evidence that cost stickiness is significantly reduced with better management decision practices.
    Keywords: cost stickiness, cost behavior, farm management accounting
    JEL: M10 M40 M41
    Date: 2007
  12. By: Hennessy, David A.
    Abstract: Farmed animal production has traditionally been a dispersed sector. Biosecurity actions relevant to eradicating infectious diseases are generally non-contractible, and might involve inordinately high transactions costs if they were contractible. If an endemic disease is to be eradicated within a region, synchronized actions need to be taken to reduce incidence below a critical mass so that spread can be contained. Using a global game model of coordination under public and private information concerning the critical mass required, this paper characterizes the success probability in an eradication campaign. As is standard in global games, heterogeneity in private signals can support a unique equilibrium. Partly because of strategic interactions, concentrated production is found to facilitate eradication whenever unit participation costs are decreasing. Policies to manipulate the critical mass have both a direct effect and a strategic coordination effect. Policies to manipulate information can have subtle and non-intuitive consequences. A program to keep disease out can be modeled similarly. It is shown, too, that coordination problems may lead to multiple equilibria in animal disease insurance markets, so that these markets may complicate a disease eradication program by creating opportunities for multiple inefficient equilibria. The presence of private insurance markets may facilitate coordination and, for good or ill, can seal the fate of a program.
    Keywords: biosecurity, coordination failure, disease insurance, endemic disease, global games, market access, public information, veterinary public health.
    Date: 2007–11–30
  13. By: Sheila Mammen (Department of Resource Economics, University of Massachusetts Amherst); Daniel Lass (Department of Resource Economics, University of Massachusetts Amherst); Sharon B. Seiling (Department of Consumer Sciences, Ohio State University)
    Abstract: Labor force participation is crucial to the economic well-being of low-income rural families. This study identified the factors that influence two decisions that low-income rural mothers make regarding their employment: labor force entry and number of hours supplied to employment. The sample consisted of 412 rural low-income mothers who participated in a multi-state study. The logistic regression model correctly predicted 80 percent of their work participation decisions. Employed rural mothers appeared to be older, better educated, and less likely to suffer from depression compared to those not working. Additionally, they were more likely to have an employed partner, a driver’s license, child care assistance, and Earned Income Tax Credit from the previous year. The estimated labor supply function explained 33 percent of the variation in hours worked by the 208 employed rural mothers. Higher wages, availability of health insurance, and overtime benefits predicted the number of hours that these employed mothers were willing to work.
    Keywords: Rural Low-income Mothers, Labor Force Participation, Women’s Labor Supply, Welfare Reform
    JEL: D13 I38 J24 R29
    Date: 2007–11
  14. By: Paul Lanoie; Stefan Ambec; Iain Scott
    Abstract: <P>According to widely held beliefs, environmental protection is associated with an increase in costs for businesses imposed by the government. Over the last decade, this view has been challenged by a number of analysts. They have identified many possibilities, from a conceptual or theoretical point of view, whereby firms could offset the costs of sustaining the environment with higher profits.<br>First, a better environmental performance can lead to an increase in revenues through the following channels: i) a better access to certain markets; ii) the possibility to differentiate products, and iii) the possibility to sell pollution-control technology. Second, a better environmental performance can lead to cost reductions in the following categories: iv) regulatory costs; v) cost of material, energy and services; vi) cost of capital, and vii) cost of labour.<br>The purpose of this report is to provide empirical evidence supporting the existence of these opportunities and to assess their magnitude. For each of the seven possibilities identified above, we provide a discussion of the mechanisms involved and a systematic view of the empirical evidence available. The objective of this paper is not to show that a reduction of pollution is always accompanied by a better financial performance, it is rather to argue that the expenses incurred to reduce pollution can sometimes be partly or completely compensated by gains made elsewhere. Through a systematic examination of all the possibilities, we want to identify the circumstances most likely to lead to a “winwin” situation, i.e., better environmental and financial performance.
    Date: 2007–11–01
  15. By: Klaus Moeltner (Department of Resource Economics, University of Nevada, Reno); Richard T. Woodward (Department of Agricultural Economics, Texas A&M University)
    Abstract: This study applies functional Benefit Transfer via Meta-Regression Modeling to derive valuation estimates for wetlands in an actual policy setting of proposed groundwater transfers in Eastern Nevada. We illustrate how Bayesian estimation techniques can be used to overcome small sample problems notoriously present in Meta-functional Benefit Transfer. The highlights of our methodology are (i) The hierarchical modeling of heteroskedasticity, (ii) The ability to incorporate additional information via refined priors, and (ii) The derivation of measures of model performance with the corresponding option of model-averaged Benefit Transfer predictions. Our results indicate that economic losses associated with the disappearance of these wetlands can be substantial and that primary valuation studies are warranted.
    Keywords: Bayesian Model Averaging; t-Error Regression Model; Meta-Analysis; Benefit Transfer; Wetland Valuation
    JEL: C11 C15 Q51
    Date: 2007–12

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