nep-agr New Economics Papers
on Agricultural Economics
Issue of 2009‒04‒13
eighteen papers chosen by
Angelo Zago
University of Verona

  1. Global Distortions to Agricultural Markets: New Indicators of Trade and Welfare Impacts, 1955 to 2007 By Peter J. Lloyd; Johanna L. Croser; Kym Anderson
  2. Future meat consumption: potential greenhouse gas emissions from meat production in Malaysia By Tey , (John) Yeong-Sheng
  3. Agricultural Trade Reform and Poverty in the Asia-Pacific: A Survey and Some New Results By John Gilbert
  4. Poverty effects of higher food prices : a global perspective By De Hoyos, Rafael E.; Medvedev, Denis
  5. Income Contingent Loans for Drought Relief: Delivering better outcomes for farmers and taxpayers By Linda C. Botterill; Bruce Chapman
  6. Role, Usage and Motivation for Contracting in Agriculture By Pavel Vavra
  8. Longer-term economic impacts of self-help groups in india By Deininger, Klaus; Liu, Yanyan
  9. Nutrient elasticities in meat demand: a case in Malaysia By Tey , (John) Yeong-Sheng; Shamsudin, Mad Nasir; Mohamed, Zainalabidin; Abdullah, Amin Mahir; Radam, Alias
  10. What is the Top Priority on Climate Change? By Paul Klemperer
  11. Trade Impacts of Selected Regional Trade Agreements in Agriculture By Jane Korinek; Mark Melatos
  12. Residents' Benefits Evaluation of Urban Development Plans - A Willingnes-To-Accept Model for a Multi-functional Land Use Project in Amsterdam By Caroline A. Rodenburg; Peter Nijkamp; Henri L.F. de Groot; Erik T. Verhoef
  13. Are International Market Demands Compatible with Serving Domestic Social Needs? Challenges in Strengthening Innovation Capacity in Kenya’s Horticulture Industry By Steglich, Mirjam; Keskin, Ekin; Hall, Andy; Dijkman, Jeroen
  14. Farm-retail price spread for pork in Malaysia By Tey, (John) Yeong-Sheng; Randy , Stringer; Wendy , Umberger
  15. Multi-Attribute Choice Modeling of Australia’s Rivers and Wetlands: A Meta-Analysis of Ten Years of Research By Roy Brouwer
  16. Strengthening Agricultural Innovation Capacity: Are Innovation Brokers the Answer? By Klerkx, Laurens; Hall, Andy; Leeuwis, Cees
  17. Are there any ‘hot’ spots and ‘bright’ spots of rice water productivity in Bangladesh? A spatio-temporal analysis of district-level data By Upali A Amarasinghe; Bharat R. Sharma; Mohammad Alauddin
  18. Determinants of repayment performance in Indian micro-credit groups By Deininger, Klaus; Liu, Yanyan

  1. By: Peter J. Lloyd (University of Melbourne); Johanna L. Croser (University of Adelaide); Kym Anderson (School of Economics, University of Adelaide)
    Abstract: Despite recent reforms, world agricultural markets remain highly distorted by government policies. Traditional indicators of those price distortions can be poor guides to the policies? economic effects. Recent theoretical literature provides indicators of trade and welfare-reducing effects of price and trade policies which this paper builds on to develop more-satisfactory indexes. The authors exploit a new Agricultural Distortion database to generate estimates of them for developing and high-income countries over the past half century. These better approximations of the trade and welfare effects of sector policies are generated without a formal model of global markets or even price elasticity estimates.
    Keywords: Distorted incentives, agricultural and trade policies, trade restrictiveness index
    JEL: F13 F14 Q17 Q18
    Date: 2009
  2. By: Tey , (John) Yeong-Sheng
    Abstract: This study shows that there is mounting meat consumption which is to be met by higher meat production. As the result, higher gas emission of CO2 is expected from increasing meat production. This is led by poultry and beef production which is likely to produce most of the greenhouse gas emissions from meat production in Malaysia. It is crucial to incorporate environmental consideration into livestock policy in National Agricultural Policy 4 and Tenth Malaysian Plan.
    Keywords: Meat; consumption; production; gas emission.
    JEL: Q50 Q11
    Date: 2009–01–15
  3. By: John Gilbert (Department of Economics and Finance, Utah State University)
    Abstract: We review the literature on the relationship between agricultural trade policy reform and poverty, and the results of recent detailed simulation studies applied to economies in the Asia- Pacific region. We then use the GTAP model to evaluate the possible impacts of the most recently proposed modalities for agricultural trade reform under Doha on the economies of the Asia-Pacific region, which we compare to a benchmark of comprehensive agricultural trade reform. The current proposal does not result in significant cuts to applied tariffs, and has very modest overall effects on welfare. Poverty in the region would decrease overall, but the distribution across countries is uneven. By contrast, comprehensive agricultural trade reform, with developing economies fully engaged, tends to benefit most economies in the region in the aggregate, and to consistently lower poverty.
    Keywords: Agricultural trade, Doha, Asia-Pacific, Poverty
    JEL: F13 F17 C68 O53
    Date: 2008–12–19
  4. By: De Hoyos, Rafael E.; Medvedev, Denis
    Abstract: The spike in food prices between 2005 and the first half of 2008 has highlighted the vulnerabilities of poor consumers to higher prices of agricultural goods and generated calls for massive policy action. This paper provides a formal assessment of the direct and indirect impacts of higher prices on global poverty using a representative sample of 63 to 93 percent of the population of the developing world. To assess the direct effects, the paper uses domestic food consumer price data between January 2005 and December 2007--when the relative price of food rose by an average of 5.6 percent --to find that the implied increase in the extreme poverty headcount at the global level is 1.7 percentage points, with significant regional variation. To take the second-order effects into account, the paper links household survey data with a global general equilibrium model, finding that a 5.5 percent increase in agricultural prices (due to rising demand for first-generation biofuels) could raise global poverty in 2010 by 0.6 percentage points at the extreme poverty line and 0.9 percentage points at the moderate poverty line. Poverty increases at the regional level vary substantially, with nearly all of the increase in extreme poverty occurring in South Asia and Sub-Saharan Africa.
    Keywords: Rural Poverty Reduction,Food&Beverage Industry,Poverty Lines,Emerging Markets
    Date: 2009–03–01
  5. By: Linda C. Botterill; Bruce Chapman
    Abstract: Australia’s National Drought Policy is considered to be one of the most advanced in the world, recognising as it does the reality of climate and focusing on adapting farm management to climatic uncertainty rather than simply subsidising agriculture in low rainfall areas. But while the underlying principles of the Policy seem to be sound, after nearly two decades of implementation and incremental changes to the instruments applied under the policy have resulted in the loss of the risk management message, ongoing use of the exceptional circumstances provisions and growing inequities between farmers, and between farmers and non-farmers. In this paper we argue that the objectives of the Policy need to be reaffirmed and key policy changes made to ensure the outcomes of the policy more closely align with its intentions. We analyse financing policy issues and propose the introduction of an income contingent loan (ICL) for drought relief as an equitable and efficient policy instrument for delivering relief to farm businesses experiencing drought, and perhaps for other adverse circumstances. It is argued that such a policy reform would allow farm businesses to take advantage of ICL insurance benefits associated with default protection and income smoothing, while at the same time minimising taxpayer contributions to drought relief.
    Keywords: drought relief; income contingent loans; rural policy
    JEL: N57 R11 Q14
    Date: 2009–01
  6. By: Pavel Vavra
    Abstract: Agri-food sectors have been going through a remarkable transformation worldwide. This process has been accompanied by an increasing use of contracts, which raises concerns about market transparency, possible consequences for actors of the food supply chains and the role a government in this changing environment. This paper provides a brief overview of structural changes in the sector and main incentives behind the increased use of contracts in agriculture, together with identifying some emerging policy issues.
    JEL: K12 L14 Q18
    Date: 2009–03
  7. By: Maude Roucan-Kane (Iñaki Pena; Michael Boehlje; Jay Akridge)
    Abstract: The objective of this study is to identify factors determining a business investment strategy (i.e., the choice of investment commitment and form of organizational structure) in the food manufacturing, chemical, agricultural wholesaling and biotechnology industries. Propositions regarding strategic alliance theories are tested on over 400 inter-firm collaborative agreements using secondary data from major US and European companies for the 1994-97 period. Results suggest that transactions with lower technological and resource uncertainty levels are more likely to result in investments with a higher commitment level (i.e., acquisitions or majority equity-based controlling investments). The investment commitment level embedded in a single business transaction seems to be affected not only by a goal of cost minimization, but also by strategic motives and firm and industry factors.
    Keywords: Transaction costs, strategic alliances, food manufacturing, chemical, agricultural wholesaling, ag-biotechnology, investment strategy, innovation
    JEL: L10
    Date: 2009
  8. By: Deininger, Klaus; Liu, Yanyan
    Abstract: Despite the popularity and unique nature of women's self-help groups in India, evidence of their economic impacts is scant. Based on two rounds of a 2,400 household panel, the authors use double differences, propensity score matching, and pipeline comparison to assess economic impacts of longer (2.5-3 years) exposure of a program that promoted and strengthened self-help programs in Andhra Pradesh in India. The analysis finds that longer program exposure has positive impacts on consumption, nutritional intake, and asset accumulation. Investigating heterogeneity of the impacts suggests that even the poorest households were able to benefit from the program. Furthermore, overall benefits would exceed program cost by a significant margin even under conservative assumptions.
    Keywords: Access to Finance,,Rural Poverty Reduction,Poverty Monitoring&Analysis,Debt Markets
    Date: 2009–03–01
  9. By: Tey , (John) Yeong-Sheng; Shamsudin, Mad Nasir; Mohamed, Zainalabidin; Abdullah, Amin Mahir; Radam, Alias
    Abstract: One distinct change in Malaysian food consumption behavior is the preference for meat products over staple and grain foods intact with income growth. Having mentioned the changes in food consumption behaviors, indeed, there are changes in nutrient availability and intake as well. This study aims to provide a better understanding of meat consumption behaviors in terms of income, price, and nutrient elasticities by analyzing the Household Expenditure Survey 2004/05 data. In the first stage, expenditure and own-price elasticities are estimated via the LA/AIDS model. This is followed by an estimation of Engel function in the second stage to obtain the estimates of income elasticities for the meat products. This study shows that the major meat products (beef, pork, mutton, and poultry) are normal goods and own-price elastic. There are mixed messages obtained from the estimated nutrient elasticities.
    Keywords: Meat; price elasticity; income elasticity; nutrient elasticity
    JEL: Q11 I12
    Date: 2008–12–27
  10. By: Paul Klemperer (Nuffield College, Oxford University)
    Abstract: What should be the West's top priority for climate-change policy? This article is a revised and updated version of my talk to the Potsdam Global Sustainability Symposium (which drafted the "Potsdam Declaration" presented to the 2007 UN Climate Change Conference in Bali).
    Date: 2009–01–01
  11. By: Jane Korinek; Mark Melatos
    Abstract: This paper provides an in-depth examination of the trade effects of three regional trade agreements (RTAs) – the ASEAN Free Trade Agreement (AFTA), the Common Market for Eastern and Southern Africa (COMESA) and the Southern Cone Common Market (MERCOSUR) -- in the agricultural sector. Results from a gravity model suggest that the creation of AFTA, COMESA and MERCOSUR have increased trade in agricultural products between their member countries. There is no robust indication of trade diversion with respect to imports from outside the region. The agreements are therefore net trade creating. There is no robust indication however that there has been strong trade creation with non-members in the case of any of the RTAs under study. In some cases, lack of transport and communications infrastructure, in addition to supply constraints, lessens the effect of the RTA on trade flows. Trade costs such as transport and logistics seem to remain important factors in determining agricultural trade flows. In some RTAs, countries have a comparative advantage in exporting many of the same agricultural products, thereby decreasing the impact of the preferential market access. A number of implications for South-South RTAs can be drawn from examining these very different agreements.
    Keywords: tariffs, trade liberalisation, RTA, regional trade agreements, agricultural trade, gravity model, AFTA, COMESA, Mercosur, ASEAN, access, South-South, trade diversion, preferential market access, trade creation
    JEL: F13 F53
    Date: 2009–04–03
  12. By: Caroline A. Rodenburg (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam)
    Abstract: Urban re-development projects may generate various positive as well as negative spatial externalities to the existing population in a given area. This study aims to assess the order of magnitude of the expected net benefits for incumbent residents from a large scale project in the Southern part of Amsterdam (the Netherlands), which is planned to transform the area into a large multi-functional urban centre. We employ a specific stated preference method (viz. a willingness-to-accept method) to assess the net socio-economic benefits for the population in the area concerned. Our approach explicitly considers perceived costs and benefits in the foreseen „end-states‟ as well as those incurred during the transitional (construction) phase towards such end-states. It is concluded that the multi-functional urban re-development project under consideration is not supported by the residents in the area, as the long-run benefits are perceived to be overshadowed by the short-run environmental nuisances.
    Keywords: multi-functional land use; stated preference; urban development
    JEL: Q15 R52 O18
    Date: 2009–03–18
  13. By: Steglich, Mirjam (LINK, UNU-MERIT); Keskin, Ekin (LINK, UNU-MERIT); Hall, Andy (LINK, UNU-MERIT); Dijkman, Jeroen (FAO)
    Abstract: Agrifood stakeholders across the world are under ever-increasing pressure with globalization and new market demands — together with changing quality and safety requirements. The ability to respond to new challenges and opportunities is important not just for producers but also for industries in developing countries. This paper explores the horticulture sector of Kenya in order to gain a better understanding of what has most significantly contributed to its success in terms of innovation response capacity. This paper aims to present what “innovation response capacity” entails, especially for natural resource-based industries in a developing country context. It will also provide an analytical framework that draws elements from agricultural innovation capacity and the innovation systems framework. This is provided through case study research conducted in Kenya by exploring a prominent horticultural enterprise, Homegrown Ltd. The paper concludes that an important element of success in this case was the formation of a range of linkages that enabled a systemic sector response to challenges rather than isolated action of individual players.
    Keywords: Innovation Response Capacity, Kenya, Horticulture, Globalization, Smallholder Production, Policy
    JEL: N57 Q13
    Date: 2009
  14. By: Tey, (John) Yeong-Sheng; Randy , Stringer; Wendy , Umberger
    Abstract: The price difference between farm and retail levels is called price spread, which is constituted mostly by marketing costs and profits. From the price spread, this paper intends to estimate elasticities of price transmission for pork in Malaysia via different empirical model specifications of markup pricing model. Using data from January 1997 to December 2007, a quantitative analysis of farm-to-retail price spreads was undertaken for pork in Malaysia. It was found that retail price is the only variable which is significant. The farm-retail price transmission for pork is very elastic.
    Keywords: Price spread; elasticity of price transmission; pork
    JEL: Q11 Q13
    Date: 2009–03–17
  15. By: Roy Brouwer (Institute for Environmental Studies, Department of Environmental Economics, VU University Amsterdam, The Netherlands)
    Abstract: A meta-analysis is presented of the empirical findings of 10 years of choice experiment applications to water and wetland management issues in Australia. A random effects Tobit model is estimated to investigate the suitability of using existing willingness to pay (WTP) values derived from estimated choice models for the purpose of benefits transfer. The random effects model outperforms the fixed effects model in terms of predictive power. An analysis of variance reveals that the survey method, sample size, and statistical model are important determinants of estimation precision and error. The use of different attributes, measurement units and levels in choice experiments makes it hard to compare WTP values for environmental attributes from different studies. The benefits associated with current and possible future use of the water resources are valued significantly higher than the nonuse benefits. Except for the systematically lower values for the Fitzroy, WTP values are more or less transferable across catchments. Other important control variables when transferring the results from choice models across water and wetland policy contexts include income levels of the population of beneficiaries and methodological study characteristics such as the number of choice tasks in the choice experiment.
    Keywords: choice experiments, stated preferences, value transfer, validity
    JEL: Q25 Q51
    Date: 2009–03
  16. By: Klerkx, Laurens (Communication and Innovation Studies Group, Wageningen University); Hall, Andy (UNU-MERIT, LINK); Leeuwis, Cees (Communication and Innovation Studies Group, Wageningen University)
    Abstract: This paper examines the role of innovation brokers in stimulating innovation system interaction and innovation capacity building, and illustrates this by taking the case of Dutch agriculture as an example. Subsequently, it reflects upon the potential role of innovation brokers in developing countries’ agriculture. It concludes that innovation brokerage roles are likely to become relevant in emerging economies and that public or donor investment in innovation brokerage may be needed to overcome inherent tensions regarding the neutrality and funding of such players in the innovation system. The Dutch experience suggests that innovation brokers need to be contextually embedded, and are unlikely to become effective through a centrally-imposed design. Hence, we conclude that stimulating their emergence requires a policy that supports institutional learning and experimentation. In the evaluation of such experiments, it is important to note that innovation brokers tend to play intangible roles that are not easily captured through conventional indicators.
    Keywords: Agriculture, Developing Countries, The Netherlands, Innovation Broker, Neutrality, Institutional Learning, Context-Specific, Innovation Systems, Capacity Strengthening, Agricultural Extension
    JEL: N54 Q13 Q16 Q18
    Date: 2009
  17. By: Upali A Amarasinghe; Bharat R. Sharma; Mohammad Alauddin (School of Economics, The University of Queensland)
    Abstract: Employing Bangladeshi district-level time series data as an empirical exploration this paper aims to: (1) estimate two measures of rice water productivity for the main crop seasons; (2) undertake a spatio-temporal analysis; and (3) identify ‘hot’ spots and ‘bright’ spots focusing on the Ganges-dependent (GDA) vis-à-vis other districts (NGDA). The paper finds that (1) kharif (wet) season rice water productivity grew much faster than for the rabi (dry) season across all districts. There was no significant correlation between seasonal growth rates although significant correlation existed between seasonal growth rates and the annual growth rate. Eight Ganges dependent districts experienced faster growth rate in kharif and overall productivity but their rabi season performance was slower relative to other districts. (2) Marginal productivity (MP) experienced fastest growth for the kharif season during 1968-1980. Up to 1990, there was no significant growth in rabi MP. Its growth declined in the 1980s but picked up since the early 1990s. (3) MPs products were slightly lower in the GDA districts for kharif and overall. The study did not find any consistent ‘hot’ spots or ‘bright’ spots in Bangladeshi rice water productivity. The process is highly groundwater intensive and is debatable whether it is sustainable.
    Date: 2009
  18. By: Deininger, Klaus; Liu, Yanyan
    Abstract: Despite their potential importance and ease of modification, impacts of monitoring and loan recovery arrangements on micro-credit groups'repayment performance have rarely been studied. Data on 3,350 expired group loans in 300 Indian villages highlight that regular monitoring and audits, high repayment frequency, consumption smoothing support through rice credit, and having group savings deposited with the lender all significantly increase repayment rates. Estimated magnitudes of their effects vastly exceed those of members'socio-economic characteristics. Significantly lower repayment on loans originating in externally provided grant resources suggests that stringent monitoring will be essential for these to have a sustainable impact.
    Keywords: Access to Finance,Debt Markets,,Bankruptcy and Resolution of Financial Distress,Strategic Debt Management
    Date: 2009–03–01

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