New Economics Papers
on Agricultural Economics
Issue of 2008‒02‒16
thirteen papers chosen by

  1. A Malthusian model for all seasons? By Paul Sharp; Jacob L. Weisdorf
  2. MARKET SEGMENTATION PRACTICES OF RETAIL CROP INPUT FIRMS By Jay Akridge; Mike Boehlje; Allan Gray; Aaron Reimer
  3. Estimating the Impact of Climate Change on Crop Yields: The Importance of Nonlinear Temperature Effects By Wolfram Schlenker; Michael Roberts
  4. More Coffee, More Cigarettes? Coffee Market Liberalisation, Gender, and Bargaining in Uganda By Jennifer Golan; Jann Lay
  5. Food and oil prices By Katsushi Imai; Raghav Gaiha; Ganesh Thapa
  6. Methodological Proposals for a Qualitative Evaluation of Italian Durum Wheat Varieties By Massimo Alfonso Russo; Roberto Gismondi
  7. Impact of a Lower Oil Subsidy on Indonesian Macroeconomic Performance, Agricultural Sector and Poverty Incidences: a Recursive Dynamic Computable General Equilibrium Analysis By Rina Oktaviani; Dedi Budiman Hakim; Hermanto Siregar; Sahara Sahara
  8. A choice experiment on coca cropping By Ibanez, Marcela; Carlsson, Fredrik
  9. Contingent valuation of natural resources: a case study for Sicily By Pasquale Lucio Scandizzo; Marco Ventura
  10. Revisiting the environmental subsidy in the presence of an eco-industry By Maia David; Bernard Sinclair-Desgagné
  11. Weighing the relative importance of environmental regulation for industry location By Abay Mulatu
  12. The Economic Value of Iowa’s Natural Resources By Otto, Daniel; Monchuk, Dan; Jintanakul, Kanlaya; Kling, Catherine L.
  13. Using participating and financial contracts to insure catastrophe risk: Implications for crop risk management By Geoffroy Enjolras; Robert Kast

  1. By: Paul Sharp; Jacob L. Weisdorf
    Abstract: An issue often discussed in relation to agricultural development is the effect on agricultural labour productivity of more intensive land-use. Introducing aspects of seasonality into a stylized Malthusian model, we unify two diverging views by showing that labour productivity may go up or down with agricultural intensification, depending on whether technological progress emerges in relation to cultivation or harvesting activities. Our result rests on evidence reported by Boserup (1965) and others, which suggests that harvest seasons in traditional agriculture are characterized by severe labour shortage.
    Date: 2008
  2. By: Jay Akridge; Mike Boehlje; Allan Gray; Aaron Reimer (Department of Agricultural Economics, College of Agriculture, Purdue University)
    Abstract: While market segmentation and the associated idea of target marketing are not new, there are questions about how the strategy of market segmentation and target marketing is being used in retail agribusiness firms. Previous research has demonstrated that distinct groups of farmers/customers exist (Alexander). However, retail crop input firms tend to be of modest size and are geographically bound. Both lack of resources and confinement to a specific geographic market present challenges for successful implementation of a market segmentation/target marketing strategy (Stolp). In this study, market segmentation/target marketing practices were explored in two types of crop input retailers: independently owned and operated firms (9 firms) and agricultural cooperatives (11 firms). A number of questions related to market segmentation/target marketing strategy were assessed via a web-based survey and telephone interviews. Referencing Best's seven-step framework, market segmentation is compared and contrasted by firm type; gaps in market segmentation strategy execution are identified; and challenges to implementing a market segmentation strategy are considered. Results show that market segmentation/target marketing was employed by 85% of the crop input retailers in the sample. Key gaps identified in market segmentation strategy execution include measuring market segment attractiveness; evaluating market segment profitability; developing a product-price positioning strategy for a tailored offering; expanding the positioning strategy to include promotional and sales elements of the marketing-mix; and evaluating the progress/success with each target market segment. Addressing these key gaps will aid industry professionals as they work to serve the needs of a continuously evolving farmer/customer base.
    Keywords: market segmentation, target marketing, crop inputs, distribution channel, retailer
    Date: 2007
  3. By: Wolfram Schlenker; Michael Roberts
    Abstract: The United States produces 41% of the world's corn and 38% of the world's soybeans, so any impact on US crop yields will have implications for world food supply. We pair a panel of county-level crop yields in the US with a fine-scale weather data set that incorporates the whole distribution of temperatures between the minimum and maximum within each day and across all days in the growing season. Yields increase in temperature until about 29C for corn, 30C for soybeans, and 32C for cotton, but temperatures above these thresholds become very harmful. The slope of the decline above the optimum is significantly steeper than the incline below it. The same nonlinear and asymmetric relationship is found whether we consider time series or cross-sectional variation in weather and yields. This suggests limited potential for adaptation within crop species because the latter includes farmers' adaptations to warmer climates and the former does not. Area-weighted average yields given current growing regions are predicted to decrease by 31-43% under the slowest warming scenario and 67-79% under the most rapid warming scenario by the end of the century.
    JEL: C23 Q54
    Date: 2008–02
  4. By: Jennifer Golan; Jann Lay
    Abstract: Focusing on intra-household allocation, we investigate the effects of coffee market liberalisation in Uganda. As coffee has traditionally been a male domain, higher income from this activity might increase gender disparities. In addition, gender-related inefficiency in household production might undermine the positive impact of improved incentives. Using data from three household surveys conducted between 1992 and 2006, we estimate Engel curves, coffee yield and labour input equations incorporating bargaining proxies. We find that income from coffee is increasingly pooled and therefore shared more equally among household members. Yet, we can only detect partial improvements in production efficiency: bargaining still appears to constraint output efficiency and the distribution of household resources continues to follow gendered lines. Moreover, female-headed households are deterred from entry into coffee farming mainly because of discrimination in access to land.
    Keywords: Coffee, Market liberalisation, Gender, Bargaining, Intra-household allocation, Sub-Saharan Africa, Uganda
    JEL: D13 D61 J16 O12 O13 O24
    Date: 2008–02
  5. By: Katsushi Imai; Raghav Gaiha; Ganesh Thapa
    Date: 2008
  6. By: Massimo Alfonso Russo; Roberto Gismondi
    Abstract: In the complex frame of the EU agriculture politics, a particular relevant aspect is given by the new regulation on durum wheat production and diffusion incentives. These subsidies are assigned according to a particular indicator (Quality Global Index - QGI), built up through a weighted mean of four qualitative parameters. However, the actual method used to evaluate QGI could not be statistically correct. In this work we propose, both from a theoretical and an empirical point of view, a comparison between the actual method and a series of alternative ones. A particular emphasis is given to a normalisation criterion, modified in order to properly take into account the asymmetry level observed on the four parameters empiric distributions.
    Keywords: Agricultural Incentives, Asymmetry, Durum Wheat Quality, Normalisation, Statistical Index.
    Date: 2007–12
  7. By: Rina Oktaviani; Dedi Budiman Hakim; Hermanto Siregar; Sahara Sahara
    Abstract: Budget deficit, exchange rate fluctuation and high fuel world price provides a pressure on budget capacity to stimulate the Indonesian economy. The government has designed several fiscal policies, including reducing the fuel subsidy. The study objective is to analyse the impact of reducing fuel subsidy on macroeconomic variables, agricultural sector, and income distribution. The modification on the basic model, which is a recursive-dynamic CGE model, is made in this study. The data used in the model is of the Indonesian I-O Table 2000, The Indonesian Social Accounting Matrix 2000, National Household Survey data and parameter from some other sources. The results show that the reduction in fuel price subsidy tends to increase prices of industrial outputs that highly depend on fuel, such as transportation and fishery sectors. In contrast, the change in fuel price does not influence the price of paddy. Wage of skilled labor, land rent, and capital rent decline steadily in response to the change in fuel price. Households will lose their income following the reduction in fuel subsidy, which then decreases the welfare of households. Incomes are not evenly distributed within the society (household groups). An increased fuel price at consumer level declines the Indonesian real GDP. The government should give the compensation of reducing the fuel subsidy directly to the poor people. The compensation can also be given directly to the poor people through the development of infrastructure, which may solve some supply side bottlenecks in the economy.
    Keywords: Fuel subsidy, income distribution, recursive dynamic CGE
    JEL: C68 D63 I32 I38 O13
    Date: 2007
  8. By: Ibanez, Marcela (Department of Economics, School of Business, Economics and Law, Göteborg University); Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Between 1997 and 2005, 5.2 billion USD were invested to reduce cocaine production in Colombia, the world’s main cocaine producer. However, little is known about the effectiveness of policies targeting coca cultivation, this paper evaluates the effects of the two main policies: eradication and alternative development. We measure the responsiveness of farmers to eradication and alternative development programs using a survey based experiment. Our results support Becker’s (1968) model of crime participation and in addition shed light on other non-monetary factors that affect the coca cultivation decision. Social norms, legitimacy, and poverty are found to be affecting coca cultivation. We find that the responses are to a large extent consistent, and the model prediction of the proportion of farmer growing coca is accurate. We also illustrate how the results can be used to draw policy conclusions, but conclude that better information about the costs is needed.<p>
    Keywords: Illegal drugs; Choice experiment; Colombia
    JEL: G11 K42 Z12 Z13
    Date: 2008–02–13
  9. By: Pasquale Lucio Scandizzo (University of Tor Vergata, Dept. SEFEMEQ, Faculty of Economics); Marco Ventura (ISAE - Institute for Studies and Economic Analyses)
    Abstract: In this paper we use the Contingent Evaluation methodology to develop an economic evaluation of natural resources in a protected marine area of Sicily. Assuming a non-Normal distribution for the ML estimation, the paper shows that a variant of the stochastic utility model appears to capture well the dependence of the willingness to pay (WTP) on the socioeconomic characteristics of a sample of stakeholders of the natural resources in question. The estimates obtained are consistent and robust across different policy measures, no embedding or sequencing effects emerge and option values appear also to have been elicited in a consistent way. Once these values are added to the basic WTP, the income elasticities estimated fall in the range reported by other studies.
    Keywords: environment, option value, contingent valuation, legal constraints.
    JEL: Q22 Q28
    Date: 2008–01
  10. By: Maia David (INRA -); Bernard Sinclair-Desgagné (PREG - Pole de recherche en économie et gestion - CNRS : UMR7176 - Polytechnique - X)
    Abstract: NA
    Keywords: Subvention environnementale;Taxe pigouvienne;Eco-industrie
    Date: 2007
  11. By: Abay Mulatu
    Date: 2008
  12. By: Otto, Daniel; Monchuk, Dan; Jintanakul, Kanlaya; Kling, Catherine L.
    Abstract: In a time of changing demographics, an increasing demand for renewable energy sources and a growing concern for the environment, policy makers in Iowa are faced with the challenge of identifying strategies for economic development that balances the needs of the changing population with economic and resource sustainability.
    Date: 2008–02–14
  13. By: Geoffroy Enjolras; Robert Kast
    Abstract: This paper proposes a combination of participating and financial contracts in order to hedge catastrophic risk. Assuming unfair policies and the existence of a basis risk, we prove the optimal coverage is realized using: first, a participating contract, which covers the idiosyncratic part of the risk under a variable premium; second, a financial contract, which hedges the systemic part of the risk under a fixed premium. The necessary intermediation of insurance companies in the conception of such contracts is emphasized as well as the impact of unfair premia. From then, potential implications for crop risk management are examined.
    Date: 2007–01

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.