New Economics Papers
on Agricultural Economics
Issue of 2008‒01‒05
fifteen papers chosen by

  1. Optimal Taxation with Joint Production of Agriculture and Rural Amenities By Casamatta, Georges; Rausser, Gordon; Simon, Leo K
  2. Diversities and Disparities among Female-Headed Households in Rural Malawi By Takane, Tsutomu
  3. Farmland Conservation in The Netherlands and British Columbia, Canada: A Comparative Analysis Using GIS-based Hedonic Pricing Models By Geerte Cotteleer; Tracy Stobbe; G. Cornelis van Kooten
  4. Challenges for Less Developed Countries: Agricultural Policies in the EU and the US By Paul Schure; G. Cornelis van Kooten; Yichuan Wang
  5. Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications By Lence, Sergio H.; Marette, Stephan; Hayes, Dermot J.; Foster, William
  6. Land rental markets in the process of rural structural trans formation : productivity and equity impacts in China By Jin, Songqing; Deininger, Klaus
  7. Impact of the South Korea-U.S. Free Trade Agreement on the U.S. Livestock Sector By Jacinto F. Fabiosa; Dermot J. Hayes; Fengxia Dong
  8. Land reforms, poverty reduction, and economic growth : evidence from India By Nagarajan, Hari K.; Jin, Songqing; Deininger, Klaus
  9. Bayesian Model Averaging in the Context of Spatial Hedonic Pricing: An Application to Farmland Values By Geerte Cotteleer; Tracy Stobbe; G. Cornelis van Kooten
  10. Land Titles and Rice Production in Vietnam By Katleen Van den Broeck; Carol Newman; Finn Tarp
  11. Where to sell ? market facilitie s and agricultural marketing By Umali-Deininger, Dina; Shilpi, Forhad
  12. Intra-Industry Trade, Multilateral Trade Integration and Invasive Species Risk By Anh Thuy Tu; John Beghin
  13. Challenges to Strengthening Agricultural Innovation Systems: Where Do We Go From Here? By Hall, Andy
  14. Securing property rights in transition: lessons from implementation of China ' s rural land contracting law By Jin, Songqing; Deininger, Klaus
  15. Coordinating to Eradicate Animal Disease, and the Role of Insurance Markets By David A. Hennessy

  1. By: Casamatta, Georges; Rausser, Gordon; Simon, Leo K
    Abstract: We show that, when there is joint production of an agricultural good and rural amenities, the first-best allocation of resources can be implemented with a tax on the agricultural good and some subsidies on the production factors (land and labour). The use of a subsidy on the agricultural good can only be explained by the desire of the policymaker to redistribute income from the consumers to the farmers.
    Keywords: joint production; rural amenities
    JEL: H21 H23 Q10
    Date: 2007–12
  2. By: Takane, Tsutomu
    Abstract: Using data obtained from a survey carried out in six villages in various parts of rural Malawi, this paper examines some of the main characteristics of female-headed households. In the study villages, most female-headed households are in a disadvantageous position relative to their male counterparts in terms of labour endowment, farm size, and agricultural productivity. The high cost of inputs, especially of fertilizer, prevents resource-poor female-headed households from improving maize self-sufficiency through increased productivity and from engaging in high-return agriculture such as tobacco production. The paper also shows that there are marked disparities within the category of female-headed households. Factors that enable some female-headed households to achieve high income include the availability of high-return nonfarm income opportunities, use of social networks to obtain labour and income opportunities, land acquisition through flexible applications of inheritance rules, and the existence of informal tobacco marketing. Livelihood diversification is adopted by both male- and female-headed households, but many of the female-headed households engage in low-return and low-entry-barrier activities such as agricultural wage labour. On the other hand, the high off-farm income in the wealthier female-headed households enables them to purchase fertilizer for own-farm production, contributing to an improvement in productivity and resultant increases in their total income.
    Keywords: Gender, Livelihoods, Farm income, Off-farm income, Poverty, Malawi, Africa, Household, Women, Agriculture
    JEL: Q12
    Date: 2007–10
  3. By: Geerte Cotteleer; Tracy Stobbe; G. Cornelis van Kooten
    Abstract: As a result of urban development farmland in many countries is under pressure. Reasons to preserve farmland are related to cultural heritage, food safety, open space, the environment, but also slowing and restricting development is a reason. To protect farmland countries use different land use policies. This paper will look specifically at two jurisdictions: The Netherlands and a particularly rich farming area in British Columbia, Canada. For these areas we will investigate how the institutions and laws present in these jurisdictions contribute to agricultural land preservation. We will analyse farmland values in a GIS-based hedonic pricing framework to answer this question. This combination enables us to analyse direct impacts of laws and regulations within the hedonic pricing framework. Moreover, we can use farm values to analyse farm survivability, and the level of speculation on farmland in the urban-rural fringe, where farmland is under urban pressure.
    Keywords: Hedonic pricing models, zoning policies, Geographical Information System, agricultural land values at the urban fringe
    JEL: Q10 Q15 R52
    Date: 2007–11
  4. By: Paul Schure; G. Cornelis van Kooten; Yichuan Wang
    Abstract: Agricultural policies adopted by developed countries are considered distortional and detrimental to less developed countries (LDCs). This paper discusses the adverse impacts on less developed countries of the agricultural support regimes of the European Union (EU) and the United States (US). Despite the fact that the budget for agriculture in these constituencies has the same order of magnitude, we find that the EU relies much more heavily on agricultural support than does the US. Specifically, the EU provides agricultural producers with an amount of support that is about two-and-a-half times that of the US, and for most commodities a larger share of farmers’ income stems from support measures as well. While the composition of producer support differs between the EU and US, the per-dollar negative impact of the policies on farmers in LDCs is about equal. Finally, we analyse the medium-term impact of the 2003 reform of common agricultural policy in the EU. We estimate the reform will lead to a reduction of EU producer support of 20 percent by 2013 and will reduce the per-dollar negative impact on LDCs of the policy as well.
    Keywords: agricultural support, European Union, US, developing countries, least-developed countries
    JEL: Q14 Q17 Q18
    Date: 2007–12
  5. By: Lence, Sergio H.; Marette, Stephan; Hayes, Dermot J.; Foster, William
    Abstract: We examine the incentives of atomistic producers to differentiate and collectively market products. We analyze market and welfare effects of alternative producer organizations, discuss circumstances under which they will evolve, and describe implications for the ongoing debate between the EU and the United States. As fixed costs of development and marketing increase and the anticipated market size falls, it becomes essential to increase the producer organization's ability to control supply to cover the fixed costs associated with the introduction of differentiated products. Counterintuitively, stronger property right protection for producer organizations may enhance welfare even after a differentiated product has been developed.
    Keywords: agricultural products, collective promotion, geographic indications, supply control, quality
    JEL: Q1
    Date: 2007–03–20
  6. By: Jin, Songqing; Deininger, Klaus
    Abstract: The importance of land rental for overall economic development has long been recognized in theory, yet empirical evidence on the productivity and equity impacts of such markets and the extent to which they realize their potential has been scant. Representative data from China ' s nine most important agricultural provinces illustrate the impact of rental markets on households ' economic strategies and welfare, and the productivity of land use at the plot level. Although there are positive impacts in each of these dimensions, transaction costs constrain participation by many producers, thus preventing rental markets from attaining their full potential. The paper identifies factors that increase transaction costs and provides a rough estimate of the productivity and equity impacts of removing them.
    Keywords: Banks & Banking Reform,Political Economy,Economic Theory & Research,Rural Development Knowledge & Information Systems,Labor Policies
    Date: 2007–12–01
  7. By: Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Dermot J. Hayes (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Fengxia Dong (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI))
    Abstract: The recently signed Korea-U.S. Free Trade Agreement (KORUS FTA) grants the U.S. livestock industry with preferential access to South Korea's import market. This study evaluates the likely impacts of the KORUS FTA on the U.S. livestock sector. Using the Food and Agricultural Policy Research Institute's modeling system, we find that livestock prices increase by 0.5% to 3.8% under the agreement. And together with an expansion by 381 to 883 million pounds in meat exports, the value of U.S. exports increase by close to U.S.$2 billion, or a 15.2% increase. Because of differential baseline starting market shares and differential rates and staging specifications, the beef sector results are primarily driven by trade diversion impacts, while a combination of trade diversion and trade creation characterizes the results in pork and poultry sectors.
    Keywords: dairy, free trade agreement, livestock, poultry, trade creation and diversion.
    Date: 2007–11
  8. By: Nagarajan, Hari K.; Jin, Songqing; Deininger, Klaus
    Abstract: Recognition of the importance of institutions that provide security of property rights and relatively equal access to economic resources to a broad cross-section of society has renewed interest in the potential of asset redistribution, including land reforms. Empirical analysis of the impact of such policies is, however, scant and often contradictory. This paper uses panel household data from India, together with state-level variation in the implementation of land reform, to address some of the deficiencies of earlier studies. The results suggest that land reform had a significant and positive impact on income growth and accumulation of human and physical capital. The paper draws policy implications, especially from the fact that the observed impact of land reform see ms to have declined over time.
    Keywords: Rural Poverty Reduction,Political Economy,Rural Development Knowledge & Information Systems,Municipal Housing and Land,Rural Land Policies for Poverty Reduction
    Date: 2007–12–01
  9. By: Geerte Cotteleer; Tracy Stobbe; G. Cornelis van Kooten
    Abstract: Since 1973, British Columbia created an Agricultural Land Reserve to protect farmland from development. In this study, we employ GIS-based hedonic pricing models of farmland values to examine factors that affect farmland prices. We take spatial lag and error dependence into explicit account. However, the use of spatial econometric techniques in hedonic pricing models is problematic because there is uncertainty with respect to the choice of the explanatory variables and the spatial weighting matrix. Bayesian model averaging techniques in combination with Markov Chain Monte Carlo Model Composition are used to allow for both types of model uncertainty.
    Keywords: Bayesian model averaging, Markov Chain Monte Carlo Model Composition, spatial econometrics, hedonic pricing, GIS, urban-rural fringe, farmland fragmentation
    JEL: R11 R15 C50 R14
    Date: 2007–11
  10. By: Katleen Van den Broeck (Department of Economics, University of Copenhagen); Carol Newman (Department of Economics, Trinity College Dublin); Finn Tarp (Department of Economics, University of Copenhagen)
    Abstract: In most of the empirical literature on land titling, the household is regarded as unitary, and land rights are found to have ambiguous effects on land allocation, investment and productivity. Using data from 12 provinces in Vietnam, we diversify land titles, and show in a household fixed effects analysis of plot level rice yields that land titles are indeed important. Only exclusively held titles have the expected positive effects, and the positive effect on yields is found in male headed households. Furthermore, a household level rice yield function reveals that exclusive user rights are inefficiency decreasing, while jointly held user rights have no efficiency effects. Finally, once the gender of the head of household is controlled for, exclusively held female titles have a greater positive effect on the efficiency of the household than that of male held titles.
    Date: 2007–12
  11. By: Umali-Deininger, Dina; Shilpi, Forhad
    Abstract: This paper analyzes the effect of facilities and infrastructure available at the market place on a farmer ' s decision to sell at the market using a comprehensive survey of farmers, markets and villages conducted in Tamil Nadu, India in 2005. The econometric estimation shows that the likelihood of sales at the market increases significantly with an improvement in market facilities and a decrease in travel time from the village to the market. The results suggest that wealth reduces a farmer ' s cost of accessing market facilities more than it increases her/his opportunity cost of leisure. The wealthy farmers are able to capture a disproportionate share of the benefits of facilities available at congested markets. The policy simulation, however, shows that the marginal benefits from an improvement in market facilities will favor poorer farmers in the context of India.
    Keywords: Markets and Market Access,Transport Economics Policy & Planning,Debt Markets,Access to Markets,Housing & Human Habitats
    Date: 2007–12–01
  12. By: Anh Thuy Tu (Department of Economics, Foreign Trade University, Hanoi, Vietnam); John Beghin (Department of Economics at Iowa State University)
    Abstract: We analyze the linkage between protectionism and invasive species (IS) hazard in the context of two-way trade and multilateral trade integration, two major features of real-world agricultural trade. Multilateral integration includes the joint reduction of tariffs and trade costs among trading partners. Multilateral trade integration is more likely to increase damages from IS than predicted by unilateral trade opening under the classic Heckscher-Ohlin-Samuelson (HOS) framework because domestic production (the base susceptible to damages) is likely to increase with expanding export markets. A country integrating its trade with a partner characterized by relatively higher tariff and trade costs is also more likely to experience increased IS damages via expanded domestic production for the same reason. We illustrate our analytical results with a stylized model of the world wheat market.
    Keywords: Invasive species, Exotic pest, Trade protection, Trade cost, Trade integration, Two-way trade, Intra-industry trade, Liberalization
    Date: 2007
  13. By: Hall, Andy (UNU-MERIT)
    Abstract: This paper was prepared to present at the Farmer First Revisited: 20 Years On conference at IDS, University of Sussex, UK, December 2007. Its focus is the challenge of strengthening agricultural innovation systems. The paper prefaces this discussion by reflecting on an apparent paradox. While agricultural innovation has never been better studied and understood, many of our ideas about innovation have failed to fundamentally change the institutional and policy setting of public and private investment intended to promote innovation for development. The paper asks "students of innovation" why a virtual spiral of innovation practice and policy learning hasn't emerged. The paper then locates the current interest in innovation systems in the evolving and contested approaches to agricultural development, noting that this is characterised by a long history of false dichotomies. The contingencies of the emerging agricultural scenario will demand the more networked modes of collective intelligence and innovation that are embodied in the innovation systems concept. The paper argues, however, that the innovation systems idea should be view as a metaphor for innovation diversity, rather than another competing innovation narrative. The way forward, it is suggested, is to create a united front of different collective intelligence-based innovation narratives to kick-start the virtuous spiral of innovation practice and policy learning. This is needed to strengthen agricultural innovation systems and so achieve developmental goals. The paper argues that it is the responsibly of all us "students of innovation" to argue for this space for diversity to flourish and to help consolidate and promote what is known about agricultural innovation. If we aren't more successful in stimulating institutional and policy change we will still be debating these issues 20 years hence.
    Keywords: Agricultural innovation systems, institutional and policy change, space for diversity, innovation narratives, collective intelligence, self-reflection.
    JEL: O2 O13 Q16 Q18 O43 D02 D78
    Date: 2007
  14. By: Jin, Songqing; Deininger, Klaus
    Abstract: This paper is motivated by the emphasis on secure property rights as a determinant of economic development in recent literature. The authors use village and household level information from about 800 villages throughout China to explore whether legal reform increased protection of land rights against unauthorized reallocation or expropriation with below-average compensation by the state. The analysis provides nation-wide evidence on a sensitive topic. The authors find positive impacts, equivalent to increasing land valu es by 30 percent, of reform even in the short term. Reform originated in villages where democratic election of leaders ensured a minimum level of accountability, pointing toward complementarity between good governance and legal reform. The paper explores the implications for situations where individuals and groups hold overlapping rights to land.
    Keywords: Common Property Resource Development,Municipal Housing and Land,Access to Finance,Political Economy,Land and Real Estate Development
    Date: 2007–12–01
  15. By: David A. Hennessy (Center for Agricultural and Rural Development (CARD))
    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.
    JEL: D8 H4 Q1
    Date: 2007–11

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