New Economics Papers
on Agricultural Economics
Issue of 2008‒04‒29
twenty papers chosen by

  1. Challenges for China's Agricultural Exports: Compliance with Sanitary and Phytosanitary Measures By Dong, Fengxia; Jensen, Helen H.
  2. Technological Progress and Emergence of Policies with Priorities for the Development of Land-Poor Farmers in Bangladesh By M. Aminul Islam Akanda
  3. FAPRI 2008 U.S. and World Agricultural Outlook By FAPRI Staff
  4. OECD Agricultural Trade Reforms Impact on India's Prices and Producers Welfare By Surabhi Mittal
  5. The main determinants of insurance purchase. An empirical study on crop insurance policies in France By Geoffroy Enjolras; Patrick Sentis
  6. FARMING MANAGEMENT IN PAKISTAN: SUGGESTED TECHNIQUES By Herani, Gobind; Wasim, Mohhammad Pervez; Rajar, Allah Wasayo; Shaikh, Riaz Ahmed
  7. Meat Slaughter and Processing Plants’ Traceability Levels: Evidence From Iowa By Bulut, Harun; Lawrence, John D.
  8. Iowa Land Value Survey, 2007 By Duffy, Michael; Smith, Darnell
  10. The Indirect Land Use Impacts of U.S. Biofuel Policies: The Importance of Acreage, Yield, and Bilateral Trade Responses By Keeney, Roman; Hertel, Thomas
  11. Estimating the Production and Market Value-Based Impacts of Nutritional Goals in NE Iowa By Swenson, David A.
  12. Estimated Costs for Production, Storage, and Transportation of Switchgrass By Duffy, Michael
  13. Biofuels for all? Understanding the Global Impacts of Multinational Mandates By Hertel, Thomas; Tyner, Wally; Birur, Dileep
  14. Mexico's Changing Pork Sector: Balancing Domestic and International Market Demand By Batres-Marquez, S. Patricia; Clemens, Roxanne; Jensen, Helen H.
  15. On Environmental Subsidy/Tax Policy with Heterogeneous Consumers: An Application of an Environmentally Differentiated Duopoly Model By Tsuyoshi Toshimitsu
  16. Why Should Regional Agricultural Productivity Growth Converge? Evidence from Italian Regions By Roberto ESPOSTI
  17. Can Horticulture be a Success Story for India? By Surabhi Mittal
  18. Impact of Ethanol Production on U.S. and Regional Gasoline Prices and on the Profitability of the U.S. Oil Refinery Industry, The By Du, Xiaodong; Hayes, Dermot J.
  19. Economic Impacts from Increasing Pig Farrowing in Iowa By Guffy, E.; Otto, Daniel; Kliebenstein, James; Duffy, Michael
  20. FIRM SIZE, TECHNICAL CHANGE AND WAGES IN THE PORK SECTOR, 1990 -2005 By Yu, Li; Hurley, Terrance M; Kliebenstein, James; Orazem, Peter

  1. By: Dong, Fengxia; Jensen, Helen H.
    Abstract: China's bilateral trade in food and agricultural products has grown dramatically following entry into the WTO, but the country faces significant problems related to sanitary and phytosanitary (SPS) compliance. The authors summarize current SPS conditions, the food safety regulatory system, production environment, inspection technology, and information systems. This discussion includes China's progress on resolving SPS problems and adjusting to SPS measures in world markets.
    Keywords: China, food safety
    Date: 2008–04–13
  2. By: M. Aminul Islam Akanda (American International University-Bangladesh (AIUB))
    Abstract: This macro-level research analyzed sequential changes in agricultural policies and evaluated their impacts among various groups of farmers classified based on the land ownership. All supply-side agricultural policies from their origins to current year were divided into four phases where, government supports for agriculture were changed from adverse circumstances support, to direct enormous support, to reform-embedded support, and finally to collaborative support with private sector and Non-government Organizations (NGOs). The changing policies favored all types of farmers among whose reform policies contributed more. The small farmers in the past were not benefited from government policies but they were lately more benefited from coherent policies emphasized on the development of land-poor farmers.
    Date: 2008–04
  3. By: FAPRI Staff
    Abstract: The FAPRI 2008 U.S. and World Agricultural Outlook presents projections of world agricultural production, consumption, and trade under average weather patterns, existing farm policy, and policy commitments under current trade agreements and custom unions. The outlook uses a macroeconomic forecast developed by Global Insight.
    Date: 2008–04
  4. By: Surabhi Mittal (Indian Council for Research on International Economic Relations)
    Abstract: Rich countries use a combination of domestic market interventions and border protection or export subsidies as a part of their domestic policies. Developed countries such as the United States and the European Union (EU) resort to trade distorting policies to make their crop more competitive - both groups maintain high domestic prices for producers, stimulate production, and thus distort prices in the world market. The distorting effects of international trade can be distinguished between consumer surplus, producer surplus and tariff revenue approaches. The present paper emphasizes on the welfare of the producers with the main focus on small farmers. The analysis presented in the paper is an approximation of the general general equilibrium analysis. The four parts of this approximation are: first, the estimation of the world price effect of removal of OECD (Organisation for Economic Co-operation and Development) distortions; second, estimation of the effects of changes in world prices on domestic prices through a price transmission model; third, estimation of the impact on domestic production through a supply response model; and, four, the estimation of changes in supply and welfare on the poor small farmers. The simulation exercise shows that due to elimination of subsidies in OECD countries the world crop prices are expected to rise. The results confirm that the depressed world prices can be corrected by removal of OECD subsidies, but the challenge for India remains: How much can these price corrections benefit the farmers? India's domestic price response to this world price change is very small for rice and wheat and slightly better for cotton and sugar. On the production front, with reduction in subsidies and rising of the world price, the production in OECD countries would decline, but it is not very clear if this would have a discernable effect on India's production. In response to the rise in world price, this paper concludes that this change would have almost negligible impact on India's production for rice and wheat and a marginal increase in the production of cotton and sugar. The welfare impact on small farmers based on these changes is also estimated. The important fact to be observed in this study is that the developed countries' policies protecting their farming sector critically affect the lives of billions of people who depend on agriculture in developing countries.
    Keywords: OECD Agriculture, Trade Policy, Subsidy Elimination, Producer Welfare
    JEL: F13 F17 Q17
    Date: 2007–07
  5. By: Geoffroy Enjolras; Patrick Sentis
    Abstract: Using data for 2002-2005 on a representative survey of French farms (FADN-RICA), we investigate the different factors that lead farmers to insure against crop risk. Our analysis takes into account a mix of both standard individual, financial and agricultural criteria. Cross-sectional and longitudinal analyses as well as logistic regressions underline the main differences between insured and non-insured farms. Compared to non-insured farms, we find that insured farms present greater financial and agricultural sizes, a more diversified production and have been motivated by the occurrence of recent catastrophic climatic events. Although essential in the cross-sectional analysis, the influence of financial parameters in the decision to insure is mitigated. On the other hand, the agricultural characteristics of the farms confirm their leading influence for the subscription of crop insurance policies.
    Date: 2007–04
  6. By: Herani, Gobind; Wasim, Mohhammad Pervez; Rajar, Allah Wasayo; Shaikh, Riaz Ahmed
    Abstract: Abstract: In this paper an attempt has been made to identify types of farming in deserted district Tharparkar, Pakistan and suggest the techniques for improvement. Study reveals that in Tharparkar farming is of three types: rain-fed agriculture (crops), livestock and use of rangeland (no-crops). Situation of rain-fed agriculture is very bad because of fluctuation in amount of rainfall year to year. Livestock is sustainable source of income generation and use of rangeland is also beneficial. Following techniques needs for its improvement: forecast of rain, quality of seed, methods of cultivation, financial support, market, electricity, export program, storage facilities, NGOs support, water facilities, awareness of education, roads, gas, cultivation of Kandi plant, and other indigenous and exotic plants, village organization, time to time research, reform of a farmland, rearing of livestock of better quality, and conservation of rangeland. The study concludes that livestock will be first level sustainable source of income; rangeland second and farmland third if suggested techniques are applied.
    Keywords: Farming; Rain-Fed; Livestock; Rangeland; Vegetation and Sustainable
    JEL: Q16 J43 Q15 O13 J24 Q12
    Date: 2008–04–18
  7. By: Bulut, Harun; Lawrence, John D.
    Abstract: Based on an econometric analysis of the data obtained from a survey of meat plants (n=53 ) in Iowa in summer 2007, this paper identifies the factors impacting the meat plants’ voluntary adoption of forward and backward traceability activities. The results suggest that the ownership type (corporate versus independent) and operations type (slaughtering versus not) matter rather than the size and meat type produced (beef, pork, or poultry) as suggested in the previous surveys. Furthermore, food safety activities appear to be complementary to traceability activities. The findings may assist ongoing regulatory efforts in implementing traceability in U.S. in the near future.
    Keywords: country of origin labeling, food safety, multiple imputation method, national animal identification system, ordered logistic regression, quality assurances, traceability
    JEL: C2 C3 Q1
    Date: 2008–04–24
  8. By: Duffy, Michael; Smith, Darnell
    Abstract: Iowa land values increased 22 percent for the year. Average value was $3,909 per acre. This was the largest increase since 1976
    Keywords: land values
    Date: 2008–04–18
  9. By: David Mather (Department of Agricultural Economics, Michigan State University); Cynthia Donovan (Department of Agricultural Economics, Michigan State University)
    Abstract: Using a three-year panel of 4,058 Mozambican households surveyed in 2002 and 2005, we measure how PA adult mortality due to illness affects rural household size and number of adult members, crop and non-farm income, total household income, and asset levels. First difference estimations indicate that the effects of PA mortality vary considerably by the gender and household position of the deceased individual as well as by region. Results show that significant reductions in household size, income, and assets are more likely found in the event of a PA male death rather than a PA female death. In the North/Center of the country, a PA male head death can result in loss of 25% of crop income; in the South, such a death results in an average loss of 88% of non-farm income. In spite of these significant reductions in income, we do not find significant reductions in total income per AE among affected households, and they are not more likely to have ex post income/AE below the expenditurebased poverty line relative to non-affected households. However, due to significant asset losses and lower ex post landholding/AE relative to the non-affected population, affected households may be increasingly vulnerable to adverse income and assets shocks, especially those households that have suffered a PA male death.
    Keywords: food security, food policy, Mozambique, hiv, aids
    JEL: Q18
  10. By: Keeney, Roman; Hertel, Thomas
    Abstract: Recent work has highlighted agricultural land conversion as a significant debit in the greenhouse gas accounting of ethanol as an alternative fuel. This work has at the same time sparked considerable debate on the role of crop yield growth as a means of avoiding rapid land conversion. We examine the agricultural land use impacts of mandate driven ethanol demand increases in the United States in a formal economic equilibrium framework which allows us to examine the importance of yield price relationships. We find that the standard assumption of trend yield growth is likely restrictive for analysis of equilibrium response to significant demand increases for fuel feedstocks. Furthermore, we identify both the acreage response and bilateral trade specification of a multi-country model as important sources of variability (in terms of parametric uncertainty) in predicting global land use change from the biofuels boom.
    Date: 2008
  11. By: Swenson, David A.
    Abstract: This research describes the potential economic impacts of a nutritionist-suggested level of fresh fruits and vegetable consumption coupled with increased levels of local production of these commodities and builds off of earlier work done by the author. It combines the net economic impacts of shifting from traditional commodity crops (corn and soybeans in Iowa) to horticulture crops with an imagined producer-owned wholesale and retail distribution network to gauge overall job and income gains for Iowa or for regions in Iowa. We also assess animal, poultry, and whole grain components of the hypothetical diet. The potential economic outcomes are identified and quantified in this study. The methodology and applicability to other regions and other local production and distribution contexts are discussed as well.
    JEL: R0
    Date: 2008–04–21
  12. By: Duffy, Michael
    Abstract: Costs of production for switchgrass vary depending upon yields. For 4 ton yield estimated production costs are $82.23 per ton. Storage and transportation add another $31.42 per ton.
    Date: 2008–04–18
  13. By: Hertel, Thomas; Tyner, Wally; Birur, Dileep
    Abstract: The recent rise in world oil prices, coupled with heightened interest in the abatement of greenhouse gas emissions, has led to a sharp increase in domestic biofuels production around the world. Previous authors have devoted considerable attention to the impacts of these policies on a country-by-country basis. However, there are also strong interactions among these programs, as they compete in world markets for feedstocks and ultimately for a limited supply of global land. In this paper, we evaluate the interplay between two of the largest biofuels programs, namely the renewable fuel mandates in the US and the EU. We examine how the presence of each of these programs influences the other, and also how their combined impact influences global markets and land use around the world. We begin with an analysis of the origins of the recent bio-fuel boom, using the historical period from 2001-2006 for purposes of model validation. This was a period of rapidly rising oil prices, increased subsidies in the EU, and, in the US, there was a ban on the major competitor to ethanol for gasoline additives. Our analysis of this historical period permits us to evaluate the relative contribution of each of these factors to the global biofuel boom. We also use this historical simulation to establish a 2006 benchmark biofuel economy from which we conduct our analysis of future mandates. Our prospective analysis of the impacts of the biofuels boom on commodity markets focuses on the 2006-2015 time period, during which existing investments and new mandates in the US and EU are expected to substantially increase the share of agricultural products (e.g., corn in the US, oilseeds in the EU, and sugar in Brazil) utilized by the biofuels sector. In the US, this share could more than double from 2006 levels, while the share of oilseeds going to biodiesel in the EU could triple.
    Date: 2008
  14. By: Batres-Marquez, S. Patricia; Clemens, Roxanne; Jensen, Helen H.
    Abstract: Competition from imported pork and the desire to export pork have influenced Mexican government policies and have resulted in improved pork quality and safety. At the same time, a two-tiered system is emerging that offers wealthier domestic consumers the opportunity to purchase pork produced under safer conditions and limits poorer consumers to pork produced with few food safety controls.
    JEL: Q0
    Date: 2008–04–13
  15. By: Tsuyoshi Toshimitsu (School of Economics, Kwansei Gakuin University)
    Abstract: We apply a model of an environmentally differentiated duopoly to the analysis of environmental policy in the form of a subsidy/tax on consumers based on emission levels of products. More specifically, we consider environmental and welfare effects of subsidizing consumers who purchase environmental-friendly goods such as hybrid vehicles. Focusing on types of market coverage by heterogeneous consumers, we examine the issue in the cases of a Bertrand and a Cournot duopoly. In the case of full market coverage with a Bertrand duopoly, an environmental subsidy improves the environment and is socially optimal. However, in the case of partial market coverage, irrespective of mode of competition, the optimal policy depends on the magnitude of the marginal social valuation of environmental damage. That is, if the marginal social valuation of environmental damage is sufficiently large (small), an environmental tax (subsidy) is optimal. Furthermore, in the Bertrand duopoly case, the effect of subsidy on the environment is ambiguous, whereas in the Cournot duopoly case, the subsidy degrades the environment.
    Keywords: Environmentally differentiated product, Environmental subsidy/tax, Green market, Bertrand and Cournot duopoly
    JEL: D43 H23 L13
    Date: 2008–04
  16. By: Roberto ESPOSTI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: The paper analyses agricultural TFP growth across Italian regions during the 1952-2002 period, and aims at identifying those factors that favour or hinder regional agricultural TFP growth convergence. Among them, idiosyncratic, R&D-spillover and learning components are included. Of major relevance is whether regions, despite their inescapable heterogeneity, tend to share common technological improvements, that is, to move along the same productivity growth rate TFP growth decomposition ultimately allows attributing observed productivity performance to convergence and divergence forces. Appropriate testing and estimation procedures are adopted to take into account panel unitroot issues and cross-sectional dependence.
    Keywords: TFP growth, convergence, panel data, spillover, unit root
    JEL: O13 O18 Q10 Q16
    Date: 2008–04
  17. By: Surabhi Mittal (Indian Council for Research on International Economic Relations)
    Abstract: India is the second largest producer of the fruits and vegetables in the world after China. Since the 1980s the international trade in fruits and vegetables has expanded rapidly. The number of commodities as well as the number of varieties produced and traded have drastically increased during the past 25 years. There is an overall increase in the demand of fruits and vegetables for consumption both in fresh and the processed form. Also there is a wide diversification in production pattern globally. Income in this sector is increasing which is driving the supply. In spite of being one of the largest producers of fruits and vegetables in the world, the export competitiveness among the Indian producers remains low. But with new marketing initiatives, the post-harvest losses and wastage due to poor infrastructure facilities such as storage and transportation are reduced to a considerable extent, yet a lot needs to be done in this sector. In an effort to overcome some of the problems associated with this sector, the case study of the successful SAFAL Market is presented in the paper. The study has observed a shift in cropping pattern in favour of horticulture in India in the past one-and-a-half decades. Analysis of the economic feasibility of this shift away from cereals to fruits and vegetable shows that it's economically viable and beneficial to shift towards horticulture production, but this diversification needs to be planned in a systematic manner. Certain strategies and policies are also suggested in this regards. The study confirms the changing consumption patterns and diversification, along with the outlook for the next 15-20 years in the light of shortage of supply to increased domestic demand. The major exports from India are mango, grapes, orange, apple, banana, mosambi, onion, potato, tomato and pumpkins. The major share of India's exports of fresh fruits and vegetables go to Bangladesh, Nepal, UAE, UK and Malaysia. Supply constraints, yield gaps and huge logistic costs affect our competitive and comparative advantage in world trade market. In this study the nominal protection coefficient and revealed comparative advantage are computed to check on the existing status. Study also identifies the potential states for the fruits and vegetables, for which India is globally competitive and has comparative advantage in production. These states should be targeted for enhancing the export potential of the country. The potential competing countries are also identified. Lessons from other developing countries focus on the growth of the horticulture sector through increased participation of small and marginal farmers in an organized manner and farmers being trained with entrepreneurial skills.
    Keywords: Horticulture, Cost Benefit Ratio, Competitiveness, Comparative Advantage, SAFAL Market
    JEL: Q13 Q17
    Date: 2007–08
  18. By: Du, Xiaodong; Hayes, Dermot J.
    Abstract: Using pooled regional time-series data and panel data estimation, we quantify the impact of monthly ethanol production on monthly retail regular gasoline prices. This analysis suggests that the growth in ethanol production has caused retail gasoline prices to be $0.29 to $0.40 per gallon lower than would otherwise have been the case. The analysis shows that the negative impact of ethanol on gasoline prices varies considerably across regions. The Midwest region has the biggest impact, at $0.39/gallon, while the Rocky Mountain region had the smallest impact, at $0.17/gallon. The results also indicate that ethanol production has significantly reduced the profit margin of the oil refinery industry. The results are robust with respect to alternative model specifications.
    Keywords: crack spread, crude oil prices, ethanol, gasoline prices.
    Date: 2008–04–24
  19. By: Guffy, E.; Otto, Daniel; Kliebenstein, James; Duffy, Michael
    Keywords: economic impact
    Date: 2008–04–18
  20. By: Yu, Li; Hurley, Terrance M; Kliebenstein, James; Orazem, Peter
    Abstract: Economists have long puzzled over the fact that large firms pay higher wages than small firms, even after controlling for worker’s observed productive characteristics. One possible explanation has been that firm size is correlated with unobserved productive attributes which confound firm size with other productive characteristics. This study investigates the size-wage premium in the context of firms competing within a single market for a relatively homogeneous product: hogs. We pay particular attention to the matching process by which workers are linked to farms of different size and technology use, and whether the matching process may explain differences in wages across farms. The study relies on four surveys of employees on hog farms collected in 1990, 1995, 2000, and 2005. We find that there are large wage premia paid to workers on larger farms that persist over time. Although more educated and experienced workers are more likely to work on larger and more technologically advanced hog farms, the positive relationships between wages and both farm size and technology adoption remain large and statistically significant even after controlling for differences in observable worker attributes and in the observed sorting process of workers across farms.
    Keywords: Pork, Hog Farms, Wages, Technology, Propensity Score, Size, Wage Premium
    JEL: J4
    Date: 2008–04–19

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