New Economics Papers
on Agricultural Economics
Issue of 2008‒01‒12
eight papers chosen by

  1. The territorial dimension of the Common Agricultural and Rural Development policy (CAP) and its relation to cohesion objectives By Dax, Thomas; Hovorka, Gerhard
  2. Who are the net food importing countries ? By Aksoy, M. Ataman; Ng, Francis
  3. Who Does Bear the Costs of Compliance with Sanitary and Phytosanitary Measures in Poor Countries? By Shafaeddin, Mehdi
  4. Deforestation, Growth and Agglomeration Effects: Evidence from Agriculture in the Brazilian Amazon By Danilo Igliori
  5. Does Micro-credit Program in Bangladesh Increase Household’s Ability to Deal with Economic Hardships? By Hoque, Serajul
  6. (UN)Bundling public-private partnership contracts in the water sector : competition in auctions and economies of scale in operation By Iimi, Atsushi
  7. BSE crisis and food safety regulation: a comparison of the UK and Germany. By Beck, Matthias; Kewell, Beth; Asenova, Darinka
  8. Attitudes towards Italian wine of practitioners in the Chinese distribution By Sergio Marchesini; Huliyeti Hasimu; Maurizio Canavari; Alessandro Farneti

  1. By: Dax, Thomas; Hovorka, Gerhard
    Abstract: An increasing focus on rural development issues has characterised the discussion of Common Agricultural Policy (CAP) reform. This reflects new societal demands for tasks and services provided by agriculture particularly in mountain and less-favoured areas (LFA). The regional distribution of CAP and Rural Development support underpins the argument that the territorial dimension implied by CAP reforms has not yet been taken sufficiently into account. The regional variation in the distribution of the LFA scheme between member states testifies this imbalance and underscores country specific priorities. LFAs will have to prove that they are more than a compensation measure, but already providing a range of multifunctional tasks.
    Keywords: territorial impact; rural development; less-favoured areas; LFA scheme; CAP reform
    JEL: Q01 R5
    Date: 2007–11–08
  2. By: Aksoy, M. Ataman; Ng, Francis
    Abstract: The purpose of this paper is to update the information on net food importing countries, using different definitions of food, separating countries by their level of income, whether they are in conflict and whether they are significant oil exporters. The study also estimates the changes in net food importing status of these countries over the last two and a half decades, and, most important, the study measures the relative importance of these net food imports in the import basket of the countries. Our results show that while many low-income countries are net food importers, the importance and potential impact of the net food importing status has been highly exaggerated. Many low-income countries that have larger food deficits are either oil exporters or countries in conflict. Food deficits of most low-income countries are not that significant as a percentage of their imports. Our results also show that only 6 low-income countries have food deficits that are more than 10 percent of their imports. Last two decades have seen a significant improvement in the food trade balances of low-income developing countries. SSA low-income countries are an exception to this trend. On the other hand, there are a g roup of countries which are experiencing civil conflicts which are large importers of food, and these countries can not meet their basic needs. They also need special assistance in the distribution of food within their boundaries. Therefore, one should modify the WTO Ministerial Declaration, and focus on these conflict countries rather than the broad net food importers.
    Keywords: Food & Beverage Industry,Emerging Markets,Currencies and Exchange Rates,Economic Theory & Research,
    Date: 2008–01–01
  3. By: Shafaeddin, Mehdi
    Abstract: Abstract This article is a part of a twin study. Drawing on the available evidence, in this paper the author examines the cost of compliance with Sanitary and Phytosanitary (SPS) measures for poor countries with reference to Africa. He shows that the burden of cost of compliance is entirely on the exporters despite the fact that their capacity for the compliance is limited. He further indicate that that, in fact, the literature often disregards the cost of loss of exports, or rejection of products at the border of an importing country, let alone the cost of reorganization of the supply chain; the existing organization of supply chain in poor countries would result in the lack of export expansion. The purpose of the paper is not to have an exhaustive literature survey, but to draw on the scanty evidence related to the main argument of the study. More specifically, it is shown that the main characteristics of the SPS Agreement and the related measures applied by main importing countries are such that they require a complex, difficult and high cost “SPS” system. Such a system involves regulatory measures, policy re-orientation, and development of the necessary infrastructure, re-organization of the supply chain, enhanced capacity building and a forward looking strategy, particularly for exports. The preparation for the compliance is also difficult for the poor countries as it is knowledge intensive, requires a learning period, training and a close cooperation between the public and private sector in various stages of the supply chain. Yet the socio-economic cost of the lack of compliance is enormous. Generally speaking, the operational cost, alone, of compliance is estimated to be between 2 to 11 percent of value of export in the case of Africa; in each case it depends, however, on the type of product, the destination of exports, the capacity of the country for the compliance and the size of farm holdings and exporting enterprises and the organization of the supply chain. Further, the investment cost can be colossal; in some cases (e.g Mozambique) exceeding the total food exports of the country. The available studies provide estimates for the administrative cost of control, inspection, testing and certification at the border; but disregard more important costs such as the costs of delays in exportation or rejection at the port of importing countries. Thus they downplay the need for taking preventive measures and the related cost of reorganization of the supply chain. In a separate paper the author proposes alternative organization of the supply chain for reducing the cost of compliance while increasing its benefits (Shafaeddin, 2007). 2
    Keywords: SPS; Agricultural development; food policy; economic development; export expansion; trade; Ethiopia
    JEL: Q1 O1 Q0 F1 I1
    Date: 2007–03
  4. By: Danilo Igliori (Department of Land Economy, University of Cambridge, UK)
    Abstract: The role of population growth and migration has been emphasized as a key variable to explain deforestation and land conversion in developing countries. The spatial distribution of human population and economic activities is remarkably uneven. At any geographical scale we find that different forms of agglomerations are pervasive. On the one hand, in central countries or regions, agglomeration is reflected in ‘large varieties of cities. On the other, less developed regions faces a dynamic process where new agglomerations form and develop as a result of frontier expansion. The recent literature on spatial economics has emphasized the role of agglomeration and clustering of economic activities as fundamental causes of an enhanced level of local economic performance, creating externalities that cause firms to grow faster and larger than they otherwise would do. However, very little has been done to examine the presence of agglomeration economies on economic performance of agricultural activities. In this paper we empirically examine whether an initial level of agglomeration impacts the subsequent economic growth and deforestation rates in the Brazilian Amazon. The regression estimates indicate that there is a significant non-linear association between the initial intensity of agglomeration with both growth and land conversion in subsequent periods.
    Keywords: Deforestation, Agglomeration, Growth, Brazilian Amazon, Land-use change, development, conservation, spatial econometrics
    JEL: Q2 Q4 R4
    Date: 2008
  5. By: Hoque, Serajul
    Abstract: It is often argued that micro-credit program intervention at the grassroots level increases the ability of the poor to deal with crises. This paper examines the relationship between households’ involvement in micro-credit programs and their capacities to deal with economic hardships by focussing on BRAC, one of the largest micro-credit providers in Bangladesh. Using RAND data collected in one region of rural Bangladesh, the paper addresses a key question: Do micro-credit programs increase the ability of the poor to deal with crises? The findings in this paper indicate that BRAC’s micro-credit program in Bangladesh may increase participating households’ abilities to cope with economic hardships but further research to much more systematic information needs to be conducted about micro-credit program before conclusive results can be reached.
    Keywords: Micro-credit; Economic Hardships; Rural Bangladesh.
    JEL: I31 I38
    Date: 2008–01–10
  6. By: Iimi, Atsushi
    Abstract: In public-private partnership transactions in the water sector, one of the alleged concerns is that there is little market competition at the auction stage. This paper casts light on a tradeoff between the competition effect at the auction level and potential economies of scale in service operation. If the authorities design a large-scale public-private partnership water transaction, it is expected to exploi t operational scale economies. But the competition effect may have to be sacrificed. The paper shows a risk that the selection of the contract size could be a very restrictive condition that excludes many prospective bidders. Moreover, the paper quantifies the optimal size of public-private partnership contracts in the sector by estimating a cost function. The analysis shows that economies of scale exist but tend to diminish quickly as production increases. When the amount of water sold exceeds about 40 million m3, the statistical significance of economies of scale disappears. And there is no rationale for auctioning the water operation with annual water delivery of more than 400 million m3 under a single contract.
    Keywords: Town Water Supply and Sanitation,Water Supply and Sanitation Governance and Institutions,Water and Industry,Water Conservation,Urban Water Supply and Sanitation
    Date: 2008–01–01
  7. By: Beck, Matthias; Kewell, Beth; Asenova, Darinka
    Abstract: The BSE crisis represents one of the worst policy disasters experienced by a UK government in recent years. In material terms, it led to the slaughter of 3.3 million cattle and an estimated economic loss of £3.7 billion. In administrative terms, the crisis led to the dissolution of the Ministry of Agriculture, Fisheries and Food (MAFF), an institution that was heavily criticised by the Phillips Inquiry for its lack of openness and transparency. Although far less severe in terms of its economic impact, with estimated losses of between Euro 0.8 and 1.05 billion, the German BSE crisis resulted in extensive political fallout, leading, inter alia, to the resignation of two government ministers. This paper compares the handling of the crisis in the UK and Germany and the regulation put in place in its aftermath. It explores the reasons for the failure of both governments to manage this crisis in a credible, timely and proactive fashion. Examining the institutional contexts in which decisions about scientific evidence on BSE were made, the paper argues that, in both countries, a centralised system, in which government agencies controlled “science for government”, was vulnerable to expert-interest group alliances which undermined the potential for a credible assessment of public health and safety risks. Looking at the policies adopted in the aftermath of these crises, the paper notes that, although being far less affected by BSE, Germany paradoxically adopted far more rigorous measures for the prevention of future incidents, which included the strict administrative separation of the risk assessment and management functions. Our paper concludes that the extent of administrative reforms which are initiated in response to crises is more likely to correspond to that general receptiveness of the political environment to these reforms, than the ‘objective’ impact of the crisis itself.
    Date: 2007–03
  8. By: Sergio Marchesini (Alma Mater Studiorum University of Bologna); Huliyeti Hasimu (Alma Mater Studiorum University of Bologna); Maurizio Canavari (Alma Mater Studiorum University of Bologna); Alessandro Farneti (Alma Mater Studiorum University of Bologna)
    Abstract: China’s economy has grown at an impressive rate after the integration into the global trading system (WTO) in 2001, a major turning point in the Chinese economic history. The opening policy has increased business opportunities for both local and foreign operators; however, in spite of the great appeal of such cooperation, many obstacles yet exist: language, culture, education, business practices, and industrial development. Food products supply and access to the market are mastered by a relatively small group of businessmen: international buyers, purchasing agents, retailers and representatives of large-scale distribution chains. The perception they have of a potential source country is a key factor for a successful market approach. The present study aims at understanding the attitudes of distribution practitioners in the Chinese market towards imported Italian quality wine, as well as the current communication, marketing, strategic and organizational advantages or deficiencies of Italian producers, compared to other European counterparts. The primary data were collected through personal interviews with key informants in Shanghai, Beijing and Guangzhou. Such information has been completed with an analysis of the existing literature, meetings with sector operators as well as with talks and presentations of experts attending the “International Workshop on Chinese Wine Market”, held in Beijing on August 8-10, 2007. The interviews have been administered as conversation-like dialogues, on the base of a semi-structured interview outline, providing also the framework for a qualitative content analysis. This paper is aimed at giving an insight on import and distribution of Italian wine in China, highlighting both positive and negative feedbacks on the effectiveness of marketing strategies of Italian wine trading companies.
    Keywords: wine, international trade, distribution, China, "Made in Italy"
    JEL: Q13 Q17
    Date: 2007–12

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