New Economics Papers
on Agricultural Economics
Issue of 2009‒01‒24
eight papers chosen by

  1. Environmental pressures and rural-urban migration: The case of Bangladesh By Herrmann, Michael; Svarin, David
  2. Essays on Environmental and Development Economics - Public Policy, Resource Prices and Global Warming By Sahlén, Linda
  3. Swedish Consumers' Willingness to Pay for Food Safety - a Contingent Valuation Study on Salmonella Risk By Sundström, Kristian; Andersson, Henrik
  4. Evaluating Implications of Agricultural Policies in a Rural Region ;through a CGE Analysis By Andrea BONFIGLIO
  5. Evaluation of Second National Fadama Development Project in Nigeria: A Rapid Policy Appraisal By Nwachukwu, Ifeanyi/ N; Agwu, Nnanna/M; Ezeh, Chima/I; Mbanasor, Jude/A; Onyenweaku, Chris/O; Kamalu , Chinedu/E
  6. Integrating Biofuels into the DART Model By Bettina Kretschmer; Sonja Peterson; Adriana Ignaciuk
  7. Fair value versus historic cost Valuation for Biological assets: Implications for the quality of financial information By Josep Ma. Argiles (UB); Josep Garcia Bladon (IQS); Teresa Monllau (UPF)
  8. Determinants of World Demand for U.S. Corn Seeds: The Role of Trade Costs By Jayasinghe, Sampath J.D.Y.; Beghin, John C.; Moschini, GianCarlo

  1. By: Herrmann, Michael; Svarin, David
    Abstract: Bangladesh, like other least developed countries (LDC), has a large rural population and agricultural labor force. At the turn of the Millennium 75 percent of the LDCs’ population still lived in rural areas and 71 percent of the LDCs’ labor force was involved in agriculture. Yet, even the least developed countries are affected by rapidly accelerating rural-to-urban migration. This decade, 2001-2010, is the first ever in which the urban population grows faster than the rural population in the LDCs. And this change is also associated with a historic employment transition, where the agricultural sector gradually loses importance. Both the population and the employment transition that can be observed for the group of least develops countries, are largely attributable to LDC's in Asia, and in particular Bangladesh. The very large rural-urban migration in Bangladesh, in comparison with other least developed countries, is attributable to relatively strong push factors on the one hand, and strong pull factors on the other. The principle factor that encourages people to leave their homes in the country side is the frequent recurrence of natural disasters, which undermine agricultural development and cause food crisis. By contrast, the principle factor that attracts people to urban centers is the expansion of the non-agricultural sectors, industry and services, which promises jobs and higher household incomes.
    Keywords: Bangladesh; climate change; rural-urban migration; agricultural development; urban planning; dual-dual model; employment; poverty
    JEL: O18 J31 R0 J21 J61 Q54 I32
    Date: 2009–01
  2. By: Sahlén, Linda (Department of Economics, Umeå University)
    Abstract: This thesis consists of four self-contained papers, which are all related to important environmental and natural resource issues from a developing country perspective. Paper [I] concerns climate policy and addresses the potential welfare gains of introducing a technology transfer from the North (richer countries) to the South (poorer countries). The results largely depend on the environmental policy in the pre- transfer resource allocation and, in particular, whether or not the South abates its own emissions. Although the technology transfer is desirable from a “global social planners” point of view, it is shown that the incentives to use the transfer might be weak from the perspective of the North; at least if the South takes its own measures to reduce emissions. However, in a situation where the North is committed to emission reductions according to the Kyoto protocol, it is shown that there will clearly be incentives for the North to use the technology transfer in order to reach the Kyoto targets in a more cost efficient way. In paper [II], the likely effects of an environmental fiscal reform in Namibia are examined by means of a Computable General Equilibrium (CGE) model. The results show that the introduction of an environmental fiscal reform, where taxes on natural and environmental resources (fish rents, energy and water) are recycled to the economy in different ways might give rise to benefits in terms of GDP, employment and income distribution, in addition to the environmental impacts. While subsidizing unskilled labour would give the most favourable outcome in terms of real GDP and employment impacts, a decrease in food taxes might be a more interesting option if GDP, employment, income distribution and environmental impacts are considered in combination. In paper [III], the value of irrigation water used for different crop alternatives in the Hardap region in Southern Namibia is estimated. The study finds that all crop alternatives that farmers in the region currently choose among, will remain financially viable after the planned increases in user charges. However, if full cost recovery is to be achieved in the future, substantial changes in the agricultural production will most likely be necessary. The method is also extended in order to study the potential effects on total water demand if further increases in user charges are implemented. Paper [IV] studies the likely effects of exogenous international food and oil price shocks on the Namibian economy. This is particularly interesting in a country where the domestic consumption of corn and petroleum products is mainly imported, and where water scarcity represents one of the main constraints to agricultural expansion. The results show that the Namibian economy will be negatively affected from the food and oil price increases, and water scarcity will further limit the ability of the economy to adapt to international oil and food price increases.
    Keywords: Climate policy; technology transfer; computable general equilibrium model; environmental fiscal reform; revenue recycling; water scarcity; resource prices
    JEL: D58 D62 H21 O13 Q18 Q25 Q52
    Date: 2009–01–14
  3. By: Sundström, Kristian (Swedish Institute for Food and Agricultural Economics (SLI)); Andersson, Henrik (VTI)
    Abstract: This paper examines the value to Swedish citizens of reducing the risk for salmonella bacteria in chicken filet. The contingent valuation (CV) study is based on the results of a postal questionnaire that was distributed to 2 000 randomly selected Swedish citizens aged 18-74. The valuation format used is a stated preference double bounded dichotomous choice. We employ the non-parametric Turnbull Lower Bound method in combination with Monte Carlo simulations to obtain lower bound estimates of the mean and median values of expected willingness-to-pay (WTP) for reducing the risk for salmonellosis, as well as values of a statistical case (VSC) and a statistical life (VSL). We find a VSC of between SEK 121 045 (110 297–131 814) and SEK 182 966 (167 915–197 896) depending on the format used (values in parentheses constitute a 90 percent confidence interval). VSL values of SEK 13.3 million and 48.3 million are estimated using different formats, but neither estimation is statistically significant. Since this is the first Swedish study on WTP for food safety, mean and median values of VSL and VSC cannot be directly compared with previous results, but the values obtained are in line with comparable Swedish studies on WTP for traffic safety as well as with international studies related to food safety. We do not find any strong linkage between WTP and income, age or gender. Scale sensitivity seems to depend on which model is chosen, while household size, risk perception ability and perceived Quality Adjusted Life Years (QALY:s) lost seem to be strong predictors of WTP.
    Keywords: Contingent valuation; Food safety; Health risk; Salmonellosis
    JEL: C14 D12 Q18
    Date: 2009–01–15
  4. By: Andrea BONFIGLIO ([n.a.])
    Abstract: This paper aims to analyse economic and social effects produced by changes in agricultural policy on an Italian "significantly rural" region, the Marche region. To this aim, a regional CGE model based on a 2004 SAM, constructed for this purpose, has been applied. Two policy scenarios have been analysed: total removal of price support and full decoupling. Results suggest that price support has indeed sustained agricultural output but has limited growth potentialities of the region. Moreover, it turned out that decoupling partly removes obstacles to a higher allocative efficiency and favours an improvement in income distribution.
    Keywords: Common Agricultural Policy, Social Accounting Matrix, policy impact, regional CGE model
    JEL: C63 C68 O18 Q18
    Date: 2008–12
  5. By: Nwachukwu, Ifeanyi/ N; Agwu, Nnanna/M; Ezeh, Chima/I; Mbanasor, Jude/A; Onyenweaku, Chris/O; Kamalu , Chinedu/E
    Abstract: The Second National Fadama Development Project was borne out of the need to ensure all year round agricultural production using available Fadama resources in Nigeria and also a follow – up to Fadama 1 that was adjudged successful. Its approach was Community Driven Development (CDD) with emphasis on social inclusiveness and empowerment of the rural people to take charge of their development agenda. The Project focused on increasing sustainably the incomes of Fadama Users via empowerment in terms of capacity building, advisory services, acquisition of productive assets and rural infrastructure development. As at mid – term, beneficiaries have increased their income by about 25%. So far, an estimated 2.3 million Fadama households have benefited from the expansion in incomes and wealth (asset) derived from the previously unavailable services provided by the project. The project had created about 126, 000 permanent jobs and an additional savings of more than $40.8 million have been realized by the majority of the participating states.
    Keywords: Fadama; Agricultural production; food security; poverty alleviation
    JEL: A30 I31
    Date: 2008–11–21
  6. By: Bettina Kretschmer; Sonja Peterson; Adriana Ignaciuk
    Abstract: Biofuels and other forms of bioenergy have received increased attention in recent times: They have partly been acclaimed as an instrument to contribute to rural development, energy security and to fight global warming but have been increasingly come under attack for their potential to contribute to rising food prices. It has thus become clear that bioenergy cannot be evaluated independently of the rest of the economy and that national and international feedback effects are important. In this paper we describe how the CGE model DART is extended to include first-generation biofuel production technologies. DART can now be used to assess the efficiency of combined climate and bioenergy policies. As a first example the effects of a 10% biofuel target in the EU are analyzed
    Keywords: biofuels, CGE model, climate policy
    JEL: D58 Q48 Q54
    Date: 2008–12
  7. By: Josep Ma. Argiles (UB); Josep Garcia Bladon (IQS); Teresa Monllau (UPF) (Universitat de Barcelona)
    Abstract: This research finds neither significant differences in earnings and revenues for farms using fair value (FV) for biological assets with respect to those valuing at historic cost (HC), nor an increase in their volatility. It does not bring about differences in profitability, accounting manipulation and farm cash flows predictability either. On the contrary, most tests reveal higher predictive power of future earnings under FV. The study also provides evidence on flawed HC accounting practices in the agricultural sector and concludes that FV seems an interesting tool for the predominant small holdings in the agricultural sector in the European Union.
    Keywords: accounting relevance, historic cost, agricultural accounting, prediction, fair value, earnings, cash flow prediction, biological assets
    JEL: M41
    Date: 2009
  8. By: Jayasinghe, Sampath J.D.Y.; Beghin, John C.; Moschini, GianCarlo
    Abstract: The United States is a large net exporter of corn seeds. Seed trade, including that of corn, has been expanding, but its determinants are not well understood. This paper econometrically investigates the determinants of world demand for U.S. corn seeds with a detailed analysis of trade costs impeding export flows to various markets, including costs associated with distance, tariffs, and sanitary and phytosanitary (SPS) regulations. The analysis relies on a gravity-like model based on an explicit specification of derived demand for seed by foreign corn producers, estimated based on data from 48 countries and for the years 1989 to 2004. An SPS count variable is incorporated as a shifter in the unit cost of seeds faced by foreign users. A sample selection framework is used to account for the determination of which trade flows are positive. All trade costs matter and have had a negative impact on U.S. corn seed exports. Tariffs matter most, followed by distance and SPS measures.
    Keywords: corn, distance, phytosanitary, seeds, SPS, tariff, technical barriers, trade cost.
    Date: 2009–01–13

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