New Economics Papers
on Agricultural Economics
Issue of 2008‒08‒31
twelve papers chosen by

  1. Farmer Participation, the Dairy Industry, and the Rise of Dairy Production in China By Jikun Huang; Yunhua Wu; Zhijian Yang; Jacinto F. Fabiosa; Fengxia Dong
  2. E-commerce and farmers’ decision-making: A case study from Uttar Pradesh (India) By Silvia Gaiani
  3. Trade and Innovation Project: Case Study No. 2: Domestic Reform, Trade, Innovation and Growth in New Zealand's Agriculture Sector By Vangelis Vitalis
  4. What Drives Land Use Change in the United States? A National Analysis of Landowner Decisions By Lubowski, Ruben; Plantinga, Andrew; Stavins, Robert
  5. National Rural Employment Guarantee Programme in India - A Review By Raghbendra Jha; Raghav Gaiha; Shylashri Shankar
  6. Trade and Innovation Project: Case Study No. 4: Deregulation, Trade Reform and Innovation in the South African Agriculture Sector By Ron Sandrey; Nick Vink
  7. Comparing Price and Non-Price Approaches to Urban Water Conservation By Olmstead, Sheila; Stavins, Robert
  8. “How Similar to South-Eastern Europe were the Islands of Cyprus and Malta in terms of Agricultural Output and Credit? Evidence during the Interwar Period” By Apostolides, A
  9. Technology Adoption, Productivity and Specialization of Uruguayan Breeders: Evidence from an Impact Evaluation By Fernando Lopez; Alessandro Maffioli
  10. National Rural Employment Guarantee Programme in Andhra Pradesh: Some Recent Evidence By Raghbendra Jha; Raghav Gaiha; Shylashri Shankar
  11. Compensation for Environmental Services and Intergovernmental Fiscal Transfers in India By Kumar, Surender
  12. Urban-Rural Consumption Inequality in China from 1988 to 2002: Evidence from Quantile Regression Decomposition By Qu, Zhaopeng (Frank); Zhao, Zhong

  1. By: Jikun Huang; Yunhua Wu; Zhijian Yang; Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Fengxia Dong (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI))
    Abstract: With rapid income growth, dairy production and consumption in China have increased significantly. This emergence of the dairy sector will provide opportunities for farmers to participate in a high-value, potentially more lucrative enterprise. The overall goal of this paper is to analyze the major determinants of farmers' participation in dairy production. Our main question is whether or not the pace of the emergence of the dairy processing industry has affected the ability of farmers to participate in dairy production and whether or not it has limited the expansion of their herd size. Based on household, village and processor surveys conducted in the Greater Beijing region, our analysis shows that the location of dairy processing firms is one of the key factors that determines the participation of farmers in dairy production. Although other factors affect participation and herd size—for example, access to roads and the ability to get a job off the farm (which affects the opportunity cost of household members)—access to dairy processors is shown to be the major factor that has encouraged the growth of dairy production over the past decade. The results also show that poor, less educated farmers with relatively less access to land are not excluded from the rapid expansion of the Greater Beijing dairy market.
    Keywords: China, dairy processing, dairy production.
    Date: 2008–08
  2. By: Silvia Gaiani (Alma Mater Studiorum University of Bologna)
    Abstract: Agriculture is vital to India. It produces 23% of GDP, feeds a billion people and employs 66% of the workforce. Yet most Indian farmers have remained quite poor. The causes include remnants of scarcity-era regulation, an agricultural system based on small, inefficient landholdings and inadeguate trade channels and information infrastructures. In order to improve the trading system and to provide timely market information India has been experimenting in the last years the use of Information and Communication Technologies (ICTs) to promote rural development. e-Choupal is the largest information technology-based intervention created in rural India by a corporate entity, the Indian Tobacco Company (ITC). Through the e-Choupal website, accessed from internet kiosks in rural villages, farmers can get information on best farming practices, prevailing market prices for their crops at home and abroad and the weather forecast – all in the local language. The overriding aim of my paper is to examine whether the use of e-Choupal for information dissemination and service delivery leads to improvements in farmers’ quality of decisions. The study is based on the primary data collected in 2006-2007 from 461 farmers in 8 districts of Uttar Pradesh, a State in the North West of India. The farmers included in the survey belong to user as well as non user groups of the e-initiative, which in Uttar Pradesh has been recently carried on both by ITC (a for profit company) and by UPBSN (a non profit company). The data on impact of usage or non-usage of e-Choupals on decision-making, collected using a structured questionnaire survey, is tested by computing chi-square statistic: differences between users and non users are analyzed on multidimensional aspects related to agricultural decisions. Divergences have been also underlined in the impact on users of ITC e-Choupal and UPBSN e-Choupal.
    Keywords: E-commerce, Rural Development, ICT, Uttar Pradesh, India
    JEL: Q13 Z10
    Date: 2008–07
  3. By: Vangelis Vitalis
    Abstract: This paper is one of five case studies which is a part of a larger project looking at the various effects that trade and investment can have on innovation. This paper studies the effect of domestic reform including trade on New Zealand's agriculture sector. Agricultural and trade reform has led to increased competition and has led to substantial changes in innovation in the commercial agriculture sector such as wine, fruit, livestock and dairy leading to a large change in composition and an across the board increase in innovation and productivity.
    Keywords: innovation, New Zealand, agriculture, trade reform, agricultural machinery, agricultural reform, dairy, foreign investment, horticulture, sheep, wine
    Date: 2008–08–06
  4. By: Lubowski, Ruben (USDA Economic Research Service); Plantinga, Andrew (Oregon State U); Stavins, Robert (Harvard U and Resources for the Future)
    Abstract: Land-use changes involve important economic and environmental effects with implications for international trade, global climate change, wildlife, and other policy issues. We use an econometric model to identify factors driving land-use change in the United States between 1982 and 1997. We quantify the effects of net returns to alternative land uses on private landowners’ decisions to allocate land among six major uses, drawing on detailed micro-data on land use and land quality that are comprehensive of the contiguous U.S. This analysis provides the first evidence of the relative historical importance of markets and Federal farm policies affecting land-use changes nationally.
    Date: 2007–12
  5. By: Raghbendra Jha; Raghav Gaiha; Shylashri Shankar
    Abstract: This paper presents results on the participation of rural workers in the National Rural Employment Guarantee Program based on a pilot survey of three villages in Udaipur district, Rajasthan, India. Three villages (Dhundiya, Karanpur and Prithvisingh Ji Ka Khera) were covered. Total number of households interviewed in December, 2007, was 340. Here the focus is on participation in NREG of different socio-economic groups and the determinants of the participation of these groups. It is discovered that the mean participation was 59 days and that targeting was efficient with other labour, self employed in agriculture, SC and ST as well as those with smaller landholdings benefiting the most from the program. Thus the performance of the National Rural Employment Guarantee program has been far from dismal.
    Keywords: National Rural Employment Guarantee Program
    JEL: C25 C81 D69 I38
    Date: 2008
  6. By: Ron Sandrey; Nick Vink
    Abstract: This paper is one of five case studies which is a part of a larger project looking at the various effects that trade and investment can have on innovation. This paper studies the effect of deregulation and trade reform on South Africa's agriculture sector. South Africa's agriculture sector is highly dualistic consisting of a developed commercial sector and a subsistence farming sector. Deregulation and trade reform has led to substantial changes in innovation in the commercial agriculture sector such as wine and fruit, leading to a large change in composition while innovation seems to have been more limited in subsistence agriculture which lacks absorption capacity. Legal uncertainties related to land reform may also be one factor which can negatively affect innovation in the commercial farming sector.
    Keywords: innovation, agriculture, trade reform, absorption capacity, deregulation, field crops, foreign investment, fruit, South Africa, wine
    Date: 2008–08–06
  7. By: Olmstead, Sheila (Yale U); Stavins, Robert (Harvard U and Resources for the Future)
    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 market-based 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.
    JEL: L95
    Date: 2008–06
  8. By: Apostolides, A
    Abstract: The paper is part of an ongoing process of estimating the GDP of Cyprus and Malta for the interwar period. The islands of Cyprus and Malta have always been considered as similar economically to other South-Eastern European states, despite the lack of historical evidence to prove it. The paper uses recently complied primary sector output estimates for the interwar period (1921 – 1938) to evaluate that the economic structure of the islands was different from each other, as well as from other South-Eastern European states. The output of the agricultural sector per capita indicated that the islands were not keeping up to other Southern-European States. Recovery of the primary sector in Cyprus came from the rapid expansion of copper mining and not from the growth of agriculture. The different growth trajectory of the islands lies partly to their differing economic structure. Malta’s economy was exceptional due to the high urbanisation of the island, leading to the economy’s dependency on the presence of the British navy. Cyprus shared the South-Eastern European problems of high population growth rates, fragmented land holdings, and poor rural credit institutions which combined in such a way to prevent a shift towards other agricultural products. The inefficiency of the credit system in Cyprus was particularly important in checking the agricultural sector’s growth.
    Keywords: Cyprus; Malta; Depression; Rural Credit; Historical National Accounts; South Eastern Europe
    JEL: E01 N34 N14
    Date: 2008–03
  9. By: Fernando Lopez (Zahler & Co.); Alessandro Maffioli (Office of Evaluation and Oversight at the Interamerican Development Bank.)
    Abstract: In this paper, we analyzed the effectiveness of the Component 1 of the Livestock Pilot Project (LPP-1) in fostering the efficiency of the Uruguayan livestock producers. We found that the LPP-1 had an overall positive impact on the adoption of managerial practices, but it had not significant impact on both productivity and specialization. We found positive effects of the LPP-1 also on productivity when we restricted the analysis to the sub-sample of producers specialized in the breeding stage. We also found that the project is only partially successful in fostering the breeders’ rate of specialization, probably due to a still too high risk aversion towards complete specialization. Finally, we found that the LPP-1 had no differentiated effects depending on the size of subsidy received by the producers. Therefore we could not identify any threshold in the subsidy intensity that significantly affects the project effectiveness. We estimated these effects through a quasi-experimental approach that combines difference-in-difference and propensity score matching techniques, in order to control for potential selection bias in the absence of a randomized experiment. We used a unique panel dataset of 520 beneficiary and 470 non-beneficiary producers, dataset that we constructed by merging information from the Uruguayan livestock Survey of 2001 and 2003 with information collected by the LPP’s Coordinating Unit.
    Keywords: Technology Adoption, Productivity, Livestock Sector, Policy Evaluation
    JEL: Q12 Q16 H43
    Date: 2008–07
  10. By: Raghbendra Jha; Raghav Gaiha; Shylashri Shankar
    Abstract: This paper, a sequel to our earlier paper on Rajasthan, presents results on the participation of rural workers in the National Rural Employment Guarantee Programme based on a pilot survey of three villages in the Chittoor district, Andhra Pradesh, India. These villages are Kaligiri, Obulayyapale and Reddivaripalle and were surveyed in December 2007. In contrast to Rajasthan, SC and ST participated in higher numbers in AP, but in both states these groups participated for slightly lower spells than the residual group of 'Others'. We find that AP performed better than Rajasthan in terms of targeting poorer caste and income groups such as SC, ST and landless households. The number of days worked on average was much higher than suggested by other assessments. Our econometric analysis further reinforces the view that not only disadvantaged groups are more likely to participate but also for longer spells. Thus the performance of the National Rural Employment Guarantee programme has been far from dismal.
    Keywords: National Rural Employment Guarantee Program
    JEL: C25 C81 D69 I38
    Date: 2008
  11. By: Kumar, Surender
    Abstract: The paper analyzes the role of intergovernmental fiscal transfers in achieving environmental sustainability. Although the significance of socio-economic functions has a comparably long tradition in federal systems of countries including India, the respective consideration of environmental services is yet to be recognized. Assignment of responsibility for protecting the environment is very much clear in India, the genesis of environmental degradation could be found in the incentive structure of governance. Though environmental services are not directly considered in intergovernmental transfers, they find place in the grants-in-aid. About 35 percent of total grants-in-aid recommended by the 12th Finance Commission are for the provision of environmental services, and are given for developing end-of-pipe infrastructure. Precautionary activities such as nature conservation, landscape protection are never considered. The review of international practices highlights the Brazilian case to learn from. In Paraná (a Brazilian state) the area conserved increased by 165 percent in a span of nine years. The study underscores the need for both, lump-sum and earmarked grants for internalizing the spillover effects. Earmarked grants are better suited for environmental clean up activities, and lump-sum transfers based on a predefined formula are good candidates for precautionary activities. An illustration demonstrates that inclusion of forest cover in the disbursement formula not only help in internalizing the externalities but also make the transfers more progressive. Financial acknowledgment of the environmental services would raise environmental awareness and provide incentives for enhancing environmental services. The inclusion of environmental services in the allocation of fiscal transfers would also help in reducing poverty and regional disparities.
    Keywords: Environmental services; Fiscal federalism; spatial externalities; environmental expenditure; India
    JEL: H77 Q01
    Date: 2008–08–26
  12. By: Qu, Zhaopeng (Frank) (Beijing Normal University); Zhao, Zhong (IZA)
    Abstract: One of the most notable social phenomena in China is the large urban-rural disparity. There are many studies of it, but most of them focus on income or earnings inequality. In this paper, we investigate the consumption disparity between urban and rural households in China from 1988 to 2002. Our results suggest that low quantiles are associated with large consumption disparity. The price effect is the dominant factor for the urban-rural consumption disparity. This disparity increased significantly, both at mean and at every quantile, from 1988 to 2002. However, most of the increase happened from 1988 to 1995, and this increase was mainly from the higher growth rate of urban household consumption. Our results also suggest that rural-urban migration and improvement of the rural educational level are very helpful in reducing urban-rural disparity.
    Keywords: inequality, consumption, quantile regression decomposition, China
    JEL: O18 O53 C15
    Date: 2008–08

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