New Economics Papers
on Agricultural Economics
Issue of 2008‒06‒21
ten papers chosen by

  1. Valuing Biodiversity Enhancement in New Zealand By Richard Yao; Pamela Kaval
  2. Consumption risk, technology adoption and poverty traps: evidence from Ethiopia By Stefan Dercon; Luc Christiaensen
  3. Land-use planning and public preferences: What can we learn from choice experiments method? By Rambonilaza, Tina
  4. Short-Run Price and Welfare Impacts of Federal Ethanol Policies By Lihong Lu McPhail; Bruce A. Babcock
  5. Australia’s Resource Use Trajectories By Heinz Schandl; Franzi Poldy; Graham M Turner; Thomas G Measham; Daniel Walker; Nina Eisenmenger
  6. Inclusion of Agriculture and Forestry in a Domestic Emissions Trading Scheme: New Zealand's Experience to Date By Suzi Kerr; Andrew Sweet;
  7. Growth linkages and policy effects in a village economy in Ethiopia: An analysis of interactions using a social accounting matrix (SAM) framework By Ferede Agaje T.
  8. Regulation of Farming Activities: An Evolutionary Approach By Constadina Passa; Anastasios Xepapadeas
  9. Cost-Benefit Analysis of Climate Change: Stern Revisited By Paul Baer; Clive L Spash
  10. Les stratégies d'implantation des firmes multinationales agroalimentaires : discussion du modèle d'Uppsala à travers la présence de Danone en Algérie By Cheriet, F.

  1. By: Richard Yao (University of Waikato); Pamela Kaval (University of Waikato)
    Abstract: The value of biodiversity enhancement in New Zealand was estimated from a survey sample of 457 residents. We determined the willingness of respondents to financially support biodiversity programs on private and public lands, as well as determining which factors influence this willingness-to-pay. Our data indicates that an average respondent was willing-to-pay $42 (2007 NZD) annually in their rates (taxes) to support a government initiated private land biodiversity programme and $82 (2007 NZD) annually to support a biodiversity programme on public lands.
    Keywords: biodiversity; contingent valuation; native species; household residents; New Zealand
    JEL: Q51 Q56 Q57
    Date: 2008–06–11
  2. By: Stefan Dercon (University of Oxford); Luc Christiaensen (World Bank)
    Abstract: Much has been written on the determinants of input and technology adoption in agriculture, with issues such as input availability, knowledge and education, risk preferences, profitability, and credit constraints receiving much attention. This paper focuses on a factor that has been less well documented: the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests. Building on an explicit model, this is explored in panel data for Ethiopia. Historical rainfall distributions are used to identify the counterfactual consumption risk. Controlling for unobserved household and time-varying village characteristics, it emerges that not just exante credit constraints, but also the possibly low consumption outcomes when harvests fail, discourage the application of fertiliser. The lack of insurance causes inefficiency in production choices.
    Keywords: Technology adoption, Fertiliser, Risk, Poverty trap, Ethiopia
    JEL: O12 O33 Q12 Q16
    Date: 2008–01
  3. By: Rambonilaza, Tina
    Abstract: In this article we discuss the economic approach to evaluate landscape preferences for land-use planning. We then use the choice experiment method to examine public preferences for three landscape features – hedgerows, farm buildings and scrubland – in the Monts d’Arrée region (in Brittany, France), in the context of re-design of landscape conservation policy by the local environmental institute. Surveys were undertaken on two user groups, visitors and local residents. Our objective was to obtain empirical evidence of the difference between the preferences of tourists and residents, for landscape attributes. We then analysed the welfare changes of tourists and residents affected by different landscape programmes. Our results point out the strong divergence between the landscape preferences of the public and those of local public actors. The comparison of the estimated values of willingness to pay for single-attribute landscaping action shows some divergence between residents’ and tourists’ ranking of preferences for agricultural landscape areas.
    Keywords: landscape preferences; attributes; choice experiment; welfare estimates
    JEL: Q0 D61
    Date: 2005–05–23
  4. By: Lihong Lu McPhail; Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC))
    Abstract: High commodity prices have increased interest in the impacts of federal ethanol policies. We present a stochastic, short-run structural model of U.S. corn, ethanol, and gasoline markets to estimate the price and welfare impacts of alternative policies on producers and consumers of corn, ethanol, and gasoline. The three federal policies that we consider are the Renewable Fuels Standard, the blenders tax credit, and the tariff on imported ethanol. Our model examines the impact of these policies on prices during the 2008/09 marketing year. Our results show that in the short run, a change in U.S. ethanol policies would not have a large, immediate impact on corn prices. Eliminating any one of the policies would reduce average corn prices by less than 4%. Removal of all three programs would decrease average corn prices by 14.5%. The reason why the changes are relatively modest is that existing U.S. ethanol plants will only shut down if their variable cost of production is not covered. Changes in ethanol policies would have large distributional impacts. Corn growers, ethanol producers, and fuel consumers have a large incentive to maintain high ethanol consumption. Gasoline producers have a large incentive to reduce ethanol production and imports. Livestock producers have a large short-run incentive to reduce domestic ethanol production.
    Keywords: ethanol policy, stochastic equilibrium model, welfare analysis.
    Date: 2008–06
  5. By: Heinz Schandl; Franzi Poldy; Graham M Turner; Thomas G Measham; Daniel Walker; Nina Eisenmenger (CSIRO Sustainable Ecosystems, Australia)
    Abstract: Australia’s export oriented large natural resources sectors of agriculture and mining, the ways in which large scale services such as nutrition, water, housing, transport and mobility, and energy are organized, as well as the consumption patterns of Australia’s wealthy urban households, create a unique pattern of overall resource use in Australia. In an attempt to contribute to a new environmental information system compatible with economic accounts, we represent Australia’s resource use by employing standard biophysical indicators for resource use developed within the OECD context. We are looking at the last three decades of resource use and the economic, social and environmental implications. We also discuss scenarios of future resource use patterns based on a stocks and flows model of the Australian economy. We argue that current extractive economic patterns have contributed to the recent economic boom in Australia but will eventually lead to negative social and environmental outcomes. While there is currently little evidence of political support for changing the economic focus on export-oriented agriculture and mining industries, there is significant potential for improvements in socio-technological systems, and room for more sustainable household consumption.
    Keywords: natural resources, resource use patterns and dynamics, physical accounting, resource productivity, social and environmental impacts of resource use, Australia
    Date: 2008–05
  6. By: Suzi Kerr (Motu Economic and Public Policy Research); Andrew Sweet;
    Abstract: No country has previously attempted to include either agriculture or forestry in an emissions trading system. The New Zealand government is planning to include both. This paper describes how they plan to do it, what some of the critical issues have been and some of the outstanding challenges. If New Zealand can resolve these issues and so can create a strong system, this could create a precedent for many others. Policy development is actively progressing as this paper is written. This paper does not definitively cover the issues but records our thinking at a moment in time and provides a framework for more in-depth analysis.
    Keywords: Emissions trading, New Zealand, agriculture, public policy
    JEL: Q54 Q58
    Date: 2008–02
  7. By: Ferede Agaje T.
    Abstract: Accelerating economic growth and poverty reduction are and continue to be the critical policy challenges in Ethiopia. The sluggish growth in agriculture coupled with lack of broad-based economic growth raises debates over the relevant direction and emphasis of development interventions in the country. In this study, we develop a social accounting matrix (SAM) for a cereal dependent village economy in rural Ethiopia and examine relevant growth options in terms of their impact on output, household income, investments in human and environmental capital in the study village. Apart from providing a quantitative analysis of a village economy, the study considers a sectoral disaggregation that takes into account the diversity of not only economic activities in terms of supply response but also heterogeneity of rural households. This study also incorporates investment in human and environmental capital in the analysis of growth linkages using a village social accounting matrix-based framework. Using constrained and unconstrained SAM multipliers, growth linkages of different sectors are explored and activities that best promote growth and household income are identified. Since the growth linkage model is based on the detailed SAM estimated for the village economy, this helps to gauge the effects of policy reforms and strategies on growth, household livelihoods, and investment in human and environmental capital. Accordingly, some simulations are performed to investigate the trade-offs and complementarities of economic and environmental policies on the village economy. Key development pathways and sectoral investment priorities are also identified that help to move the village economy in the direction of sustainable development.
    Date: 2008–04
  8. By: Constadina Passa (Department of Economics, University of Crete, Greece); Anastasios Xepapadeas (Department of Economics, University of Crete, Greece)
    Abstract: Farming activity is modeled under an intervention policy regime, combining the environmental requirements of the Council Nitrates Directive (91/676/EEC) and the compensatory provisions of the second pillar of the Common Agricul- tural Policy. The optimizing behavioural rule along with the evolutionary rule is employed in order to model the individual farmer's decision making, regard- ing compliance or not with regulatory provisions. The impact of these di¤erent behavioral rules on the selection of monitoring effort and thus on the compli- ance incentives of a population of farmers is examined. Analysis indicated that if monitoring effort is chosen arbitrarily or optimally based on the accustomed full rationality assumption then the population adopts a monomorphic behav- ior in the long-run, involving either full or noncompliance with the Directive's provisions. A polymorphic behavior involving partial compliance of the pop- ulation also arises if the dynamic model of optimal monitoring is constrained by replicator dynamics which represent the imitation rules. It is evident, thus, that the number and the type of the equilibrium steady-states is affected by the assumption regarding the behavioral rule adopted by regulated agents. Fi- nally, the dynamics of the population of compliant farmers is also assessed under accumulation of monitoring capital indicating identical properties.
    Keywords: Nitrates Directive, agri-environmental programs, monitoring effford, monitoring capital, rationality, optimal behavioral rule, replicator dynamics, imitation
    JEL: Q20 L51 B52
    Date: 2008–06–10
  9. By: Paul Baer; Clive L Spash (CSIRO Sustainable Ecosystems, Australia)
    Abstract: This paper explores the challenges facing orthodox economic approaches to assessing climate control as if it were appraisal of an investment project. Serious flaws are noted in the work of economists with especial attention to the UK Government report by Stern and colleagues. The opinions expressed in this paper are those of the authors and may not be taken to reflect the views CSIRO or the Australian Government.
    Keywords: enhanced greenhouse effect, global CBA, Stern Report
    JEL: Q51 Q54 Q58 D61 D62 D81 D90
    Date: 2008–05
  10. By: Cheriet, F.
    Abstract: This work aims to test the validity of the Uppsala model through the examination of a multinational company entry in a transition country: The case of the evolution of Danone's presence in Algeria. The longitudinal analysis conducted between 2003 and 2006 has allowed a partial validation of the model of Uppsala. The results underlined the specificity of multinationals behavior in terms of "jump" steps, nonlinearity and non-uniformity of implantation process and rhythm. Also, the analysis of interactions between subsidiaries on the one hand, and consideration of links between multinational businesses to enhance the market experience; and strategies for regional integration on the other hand, have enabled us to propose some extensions to the initial Uppsala model. These extensions will integrate external environmental factors, as well as the target market specificities in terms of demand characteristics, institutional environment and its competitive structure. ...French Abstract : L'objet de ce travail est de tester la validité du modèle d'Uppsala à travers l'examen de l'implantation d'une multinationale dans un pays en transition : Le cas de l'évolution de la présence de Danone en Algérie. L'analyse longitudinale menée entre 2003 et 2006 n'a permis qu'une validation partielle du modèle d'Uppsala. Les résultats ont souligné la spécificité du comportement des multinationales en termes de "saut " d'étapes, de non linéarité/ déterminisme et de non uniformité du rythme du processus d'implantation. Aussi, l'analyse des intéractions entre les filiales d'une part, et l'examen des liens inter-métiers afin de valoriser l'expérience - marché et des stratégies d'intégration régionale d'autre part, nous ont permis de proposer des extensions possibles au modèle initial d'Uppsala. Ces extensions devront intégrer les facteurs d'environnement externe, tant par rapport aux spécificités du marché visé en termes institutionnels et de demande que celles de sa structure compétitive.
    JEL: L14 L21 L24 L66
    Date: 2008

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