nep-agr New Economics Papers
on Agricultural Economics
Issue of 2008‒08‒21
twelve papers chosen by
Angelo Zago
University of Verona

  1. Hobby Farms and British Columbia’s Agricultural Land Reserve By Tracy Stobbe; Alison Eagle; G. Cornelis van Kooten
  2. The interdependencies between food and biofuel production in European agriculture - an application of EUFASOM By P. Michael Link; C. Ivie Ramos; Uwe A. Schneider; Erwin Schmid; J. Balkovic; R. Skalsky
  3. Insecticide use on vegetables in Ghana: Would GM seed benefit farmers? By Horna, Daniela; Smale, Melinda; Al-Hassan, Ramatu; Falck-Zepeda, José
  4. Biofuels and the Food Price Crisis: A Survey of the Issues By Kimberly Elliott
  5. Comparing Price and Non-price Approaches to Urban Water Conservation By Olmstead, Sheila M.; Stavins, Robert N.
  6. Land tenure and productivity: Farm level evidence from Papua New Guinea By Satish Chand and Charles Yala
  7. Technical Efficiency of Rice Farmers in Northern Ghana By Seidu Al-hassan
  8. Household willingness to pay for organic products By Rachel Griffith; Lars Nesheim
  9. Capture of Anti-Poverty Programs: An Analysis of the National Rural Employment Guarantee Program in India By Raghbendra Jha; Sambit Bhattacharyya; Raghav Gaiha; Shylashri Shankar
  10. Estimating Hedonic Prices for Stellenbosch wine By Sanja Lutzeyer
  12. The paradigm of new rurality as the axis of public policies. What can we expect? By Acosta Reveles, Irma Lorena

  1. By: Tracy Stobbe; Alison Eagle; G. Cornelis van Kooten
    Abstract: Agricultural land protection near the urban-rural fringe is a goal of many jurisdictions, including British Columbia, Canada, which uses a provincial-wide zoning scheme to prevent subdivisions and non-agricultural uses of the land. Preferential taxes are also used to encourage agricultural use of the land. Small scale hobby farmers are present at the urban fringe near Victoria (the capital), both inside and outside of the Agricultural Land Reserve (ALR). The goal of this paper is to investigate whether hobby farms create problems for agricultural land preservation. We make use of a GIS (geographic information system) model to construct detailed spatial variables and analyse our parcel-level data set using an hedonic pricing model and a limited dependent variable model. The results show that hobby farmers tend to select small parcels that are near open space and relatively close to the city and they tend to support horses and other livestock. In terms of price, farmland is worth more per ha the smaller the parcel is and the closer it is to the city. In general farmland is worth more when it is less fragmented but this appears to be reversed for hobby farms – indicating that hobby farmers may be better adapted to surviving in the urban fringe than conventional farmers. The conclusions drawn from the results in this paper would likely apply to other jurisdictions which seek to protect agricultural land in the urban fringe.
    Keywords: Hobby farmers, Agricultural Land Reserve, Geographical Information System, urban-rural fringe, zoning systems, farmland fragmentation
    JEL: R11 R15 C50 R14
    Date: 2008–07
  2. By: P. Michael Link; C. Ivie Ramos; Uwe A. Schneider; Erwin Schmid; J. Balkovic; R. Skalsky (Research unit Sustainability and Global Change)
    Abstract: In the continuous quest to reduce anthropogenic emissions of carbon dioxide, the production and use of organically grown fuels in Europe has increased in importance in the recent past. However, the production of so-called biofuels is a direct competitor of agricultural food production for land, labor, water resources etc. with both land use options influencing each other depending on the respective boundary conditions defined by political regulations and economic considerations. In this study we will explore the economic and technical potentials of biofuels in Europe as well as the interdependencies between these two land use options for different economic incentives for biofuels using the European Forest and Agriculture Sector Optimization Model (EUFASOM). Key data on biodiesel and ethanol production have been gathered and are used for calibration of the model. The simulations extend until the year 2030, for which results are presented. Results indicate that moderate production targets of biofuels lead to an expansion of mainly the biodiesel production while more ambitious targets call for a focus on bioethanol. This has to do with the different levels of production efficiency depending on the production output. Growth of bioethanol feedstock is spread over entire Europe while the production of biodiesel feedstock occurs mainly in Central Europe.
    Keywords: biodiesel, bioethanol, Europe, EUFASOM, modeling
    JEL: Q18 Q19 Q54
    Date: 2008–07
  3. By: Horna, Daniela; Smale, Melinda; Al-Hassan, Ramatu; Falck-Zepeda, José
    Abstract: "Tomato, cabbage, and garden egg (African eggplant, or Solanum aethiopicum) are important crops for small-scale farmers and migrants in the rural and peri-urban areas of Ghana. Genetic modification has the potential to alleviate poverty through combating yield losses from pests and diseases in these crops, while reducing health risks from application of hazardous chemicals. This ex ante study uses farm survey data to gauge the potential for adoption of genetically modified (GM) varieties, estimate the potential impact of adoption on farm profits, and highlight economic differences among the three crops. Farmers' expenditures on insecticides are below the economic optimum in all three crops, and the estimated function for damage abatement shows that insecticide amounts are significant determinants of cabbage yields only. Nonetheless, yield losses from pests and disease affect insecticide use. A stochastic budget analysis also indicates a higher rate of return to vegetable production with the use of resistant seeds relative to the status quo, even considering the technology transfer fee for GM seed. Non–insecticide users could accrue higher marginal benefits than current insecticide users. Comparing among vegetable crops with distinct economic characteristics provides a wider perspective on the potential impact of GM technology. Until now, GM eggplant is the only vegetable crop that has been analyzed in the peer-reviewed, applied economics literature. This is the first analysis that includes African eggplant." from authors' abstract
    Keywords: Biotechnology Developing countries, Genetically modified crops, pesticides, Pests Management, eggplant, damage abatement, stochastic budget analysis,
    Date: 2008
  4. By: Kimberly Elliott
    Abstract: While the precise contribution of biofuels to surging food prices is difficult to know, policies promoting production of the current generation of biofuels are not achieving their stated objectives of increased energy independence or reduced greenhouse gas emissions. Reaching the congressionally mandated goal of blending 15 billion gallons of renewable fuels in gasoline by 2015 would consume roughly 40 percent of the corn crop (based on recent production levels) while replacing just 7 percent of current gasoline consumption. Moreover, while it has long been known that the net energy and greenhouse gas emission benefits of corn-based ethanol are relatively small because its production is energy-intensive, recent scientific studies suggest that the current generation of biofuels, including biodiesel made from palm oil, soybeans, and rapeseed, as well as corn-based ethanol, actually add to greenhouse gas emissions relative to petroleum-based fuels when land use changes are taken into account. That is, greenhouse gases are released when forests are cut down or grasslands cleared to plant biofuels, or food is planted on new acreage to replace crops diverted to fuel elsewhere. In sum, the food crisis adds urgency to the need to change these policies but does not change the basic fact that there is little justification for the current set of policies.
    Keywords: food crisis, ethanol, biofuels, greenhouse gas emissions
    Date: 2008–08
  5. By: Olmstead, Sheila M.; Stavins, Robert N.
    Abstract: Urban water conservation is typically achieved through prescriptive regulations, including the rationing of water for particular uses and requirements for the installation of particular technologies. A significant shift has occurred in pollution control regulations toward market-based policies in recent decades. We offer an analysis of the relative merits of marketbased and prescriptive approaches to water conservation, where prices have rarely been used to allocate scarce supplies. The analysis emphasizes the emerging theoretical and empirical evidence that using prices to manage water demand is more cost-effective than implementing non-price conservation programs, similar to results for pollution control in earlier decades. Price-based approaches also have advantages in terms of monitoring and enforcement. In terms of predictability and equity, neither policy instrument has an inherent advantage over the other. As in any policy context, political considerations are important.
    Keywords: cost-effectiveness, water conservation, market-based approaches, policy instrument choice, water price
    JEL: Q25 Q28 Q58 L95
    Date: 2008–06–15
  6. By: Satish Chand and Charles Yala
    Abstract: Does land tenure form affect farm level productivity? The answer, from farm level data for oil palm from the Hoskins project in West New Britain province of Papua New Guinea, is in the affirmative. Analysis of farm level output, controlling for all measured inputs, shows systematic differences in productivity across three land tenure types; namely, farms under customary purchase agreements (CP), those under the land settlement scheme (LSS), and those under village owned land schemes (VOP). The evidence is that productivity is higher under the CP and LSS schemes compared to the VOP arrangement. The empirics suggests that the higher productivity is due to benefits from economies of scale enjoyed by farms with improved tenure security and from the absence of sharing of income and harvesting effort that is present on farms with insecure tenure.
    Date: 2008
  7. By: Seidu Al-hassan
    Abstract: Examining the level of farm-specific technical efficiency of farmers growing irrigated and non-irrigated rice in Northern Ghana, this study fitted cross-sectional data into a transcendental logarithmic (translog) production frontier. The study concludes that rice farmers are technically inefficient. There is no significant difference in mean technical efficiencies for non-irrigators (53%) and irrigators (51%). The main determinants of technical efficiency in the study area are education, extension contact, age and family size. Providing farmers with both formal and informal education will be a useful investment and a good mechanism for improving efficiency in rice farming. There is also need for training more qualified extension agents and motivating them to deliver.
    Date: 2008–04
  8. By: Rachel Griffith (Institute for Fiscal Studies and University College London); Lars Nesheim (Institute for Fiscal Studies)
    Abstract: <p><p>We use hedonic prices and purchase quantities to consider what can be learned about household willingness to pay for baskets of organic products and how this varies across households. We use rich scanner data on food purchases by a large number of households to compute household specific lower and upper bounds on willingness to pay for various baskets of organic products. These bounds provide information about willingness to pay for organic without imposing restrictive assumptions on preferences. We show that the reasons households are willing to pay vary, with quality being the most important, health concerns coming second, and environmental concerns lagging far behind. We also show how these methods can be used for example by stores to provide robust upper bounds on the revenue implication of introducing a new line of organic products. </p></p>
    Date: 2008–07
  9. By: Raghbendra Jha; Sambit Bhattacharyya; Raghav Gaiha; Shylashri Shankar
    Abstract: Using pooled household level data for the Indian states of Rajasthan and Andhra Pradesh we find that the size of landholdings is a negative predictor of participation in the National Rural Employment Guarantee Program (NREGP). In state level analysis this pattern survives in Rajasthan but reverses in Andhra Pradesh where we notice a positive relationship. This paper examines whether this sign reversal in Andhra Pradesh is indicative of program capture in Andhra Pradesh and better targeting in Rajasthan. We compare land inequality, political interference, and geographical remoteness across the two states and conclude that program capture may be an issue in Andhra Pradesh, largely because of these reasons. We also find evidence of complementarity between NREGP and the Public Distribution System (PDS).
    Keywords: Capture; Poverty; India
    JEL: I38 O12
    Date: 2008
  10. By: Sanja Lutzeyer (Department of Economics, University of Stellenbosch)
    Abstract: This paper estimates a hedonic price function for Stellenbosch wines to determine the association between market value and different characteristics of these wines. In such a hedonic price function, the price of a bottle of wine is ascribed to the implicit value of its attributes. Besides contributing to both South African and international wine pricing literature, the benefits of developing a hedonic wine pricing model extend to numerous players in the wine industry. Consumers are provided with guidelines on how to utilize their wine purchasing budget more efficiently, while producers are able to use estimates of the function to guide future investment decisions. The hedonic price function estimated in this paper includes numerous ‘objective’ characteristics, appearing on the label of the bottle, as well as subjective characteristics in the form of expert wine ratings. In an effort to address possible heterogeneity of wine as a product, separate regressions are run for red and white wines. The estimation of the hedonic price equation shows that, in general, wine quality (as modelled by blind and sighted wine ratings) and age of the wine are relevant in accounting for price deviations from average red wine prices. Further, it is found that only limited numbers of red wine varieties and sub-districts of production significantly influence the average price of Stellenbosch red wines. For white wines, only sighted wine ratings as well as age of the wine were found to significantly account for deviations from average white wine prices. While blind wine ratings and white wine varieties were not found to significantly influence average white wine prices, certain regions of production where found to be relevant in accounting for deviations from average white wine prices.
    Keywords: Hedonic pricing, Wine, Stellenbosch, South Africa
    JEL: Q11 C13 C21
    Date: 2008
  11. By: Sherrill Shaffer; Robert N. Collender
    Abstract: Several theories of externalities and asymmetric information suggest a positive role for government programs to assist credit markets, though potential distortions by special interests carry attendant dangers. We examine the empirical association between funding by several federal government programs and subsequent economic performance, measured six ways, for nonmetropolitan U.S. counties during the 1990s. Significant differences are found across programs, performance measures, and market types. Observed tradeoffs suggest a need to compare policy objectives with acceptable costs in many cases. Overall, the results are consistent with theoretical predictions and with some standard policy objectives.
    JEL: H81 O18 R11
    Date: 2008–08
  12. By: Acosta Reveles, Irma Lorena
    Abstract: Recognizing that poverty in the fields of Latin America has not been overcome with the model of agribusiness and agro-exporting, the paradigm of new rurality emerges as a response to meet the demands of the rural areas. This vision is now the basis of rural policies in Latin America and other underdeveloped areas of the world. This document seeks to recover the core elements of this vision in its internal articulation. Then, we will respond to some questions: What can we expect from this paradigm? Can we expect to overcome rural poverty? Which are the merits and limitations of this approach? Tras reconocer que la pobreza en los campos latinoamericanos no ha sido superada con el modelo de los agronegocios y las agroexportaciones, el paradigma de la nueva ruralidad emerge como respuesta para atender las carencias más sentidas en el medio rural. Esta visión, promovida con afán por instituciones multilaterales y por organismos financieros internacionales, ha pasado a ser el eje central de las políticas de Estado orientadas al campo en América Latina y otras zonas subdesarrolladas del orbe. Es intención de este documento recuperar los elementos medulares de este paradigma en su articulación interna. Luego de esta síntesis nos abocamos a responder algunas preguntas: ¿Qué podemos esperar de este paradigma trasladado en la práctica a nuestros países, donde impera la condición de subdesarrollo? ¿Cabe esperar de él éxitos importantes en materia de progreso rural local o microrregional? ¿Cuáles son sus méritos y cuáles sus restricciones?
    Keywords: Paradigm; new rurality; public policies; Latin america
    JEL: R58 O18 O54 O21 Q18 N56
    Date: 2008–06

This nep-agr issue is ©2008 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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.