nep-agr New Economics Papers
on Agricultural Economics
Issue of 2009‒07‒11
twenty-two papers chosen by
Angelo Zago
University of Verona

  1. Farmers' health status, agricultural efficiency, and poverty in rural Ethiopia: A stochastic production frontier approach By Ulimwengu, John M.
  2. Rebuilding after emergency: Revamping agricultural research in Sierra Leone after civil war By Asenso-Okyere, Kwadwo; Workneh, Sindu; Rhodes, Edward; Sutherland, John
  3. The Effects of Biofuels Policies on Global Commodity Trade Flows By Fridfinnson, Brooke; Rude, James
  4. Green House Gases and Carbon Trading By Massey, Ray
  5. Inflation dynamics and food prices in an agricultural economy : the case of Ethiopia By Loening, Josef L.; Durevall, Dick; Birru, Yohannes A.
  6. Impacts of Selected US Ethanol Policy Options By Meyer, Seth; Westhoff, Pat; Thompson, Wyatt
  7. Forestland Reform in China: What do the Farmers Want? A Choice Experiment on Farmers’ Property Rights Preferences By Qin, Pin; Carlsson, Fredrik; Xu, Jintao
  8. ACRE in the U.S. Farm Bill and the WTO By Zulauf, Carl; Orden, David
  9. Results of a Survey of Graduate Courses in Agricultural Trade By Meilke, Karl D.
  10. Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya By Esther Duflo; Michael Kremer; Jonathan Robinson
  11. Is There Supply Distortion In The Green Box? An Acreage Response Approach By Bakhshi, Samira; Kerr, William A.
  12. Economic Impacts of Soybean Rust on the US Soybean Sector By Gomez, Miguel I.; Nunez, Hector M.; Onal, Hayri
  13. Agglomeration externalities and technical efficiency in French pig production By Solène Larue; Laure Latruffe
  14. Household Adoption of Water-Efficient Equipment: The Role of Socio-economic Factors, Environmental Attitudes and Policy By Katrin Millock; Céline Nauges
  15. Validation of the world food programme's food consumption score and alternative indicators of household food security: By Wiesmann, Doris; Bassett, Lucy; Benson, Todd; Hoddinott, John
  16. Joint water quantity/quality management analysis in a biofuel production area: Using an integrated economic-hydrologic model By de Moraes, Marcia Maria Guedes Alcoforado; Cai, Ximing; Ringler, Claudia; Albuquerque, Bruno Edson; da Rocha, Sérgio P. Vieira; Amorim, Carlos Alberto
  17. Results of a Survey of Graduate Courses in Applied Welfare Economics By Meilke, Karl D.
  18. Altering Milk Components Produced by the Dairy Cow: Estimation by a Multiple Output Distance Function By Cho, Jaesung; Nakane, Matsato; Tauer, Loren W.
  19. Remittances and natural disasters : ex-post response and contribution to ex-ante preparedness By Mohapatra, Sanket; Joseph, George; Ratha, Dilip
  20. Structural Change out of Agriculture: Labor Push versus Labor Pull By Alvarez-Cuadrado, Francisco; Poschke, Markus
  21. WHY DO RURAL FIRMS LIVE LONGER? By Yu, Li; Orazem, Peter; Jolly, Robert W.
  22. Biomass Supply for Biofuel Production: Estimates for the United States and Canada By Kumarappan, Subbu; Joshi, Satish; MacLean, Heather

  1. By: Ulimwengu, John M.
    Abstract: "The A stochastic frontier production function is used to estimate agricultural efficiency index. Then, controlling for household characteristics and other exogenous variables, the efficiency index is regressed on the probability of being sick. Estimation is performed using the treatment effect model where the probability of being sidelined by sickness is modeled as a probit. This framework allows policy simulations that underscore the impact of farmers' health status on both agricultural efficiency and poverty reduction. Overall, regression results confirm the negative impact of health impediment on farmers' agricultural efficiency. Simulation results show that improving farmers' agricultural efficiency by investing in farmers' health may not necessarily lead to poverty reduction. Additional policy instruments may be needed to achieve simultaneous increase in agricultural productivity and reduction in poverty rate." from authors' abstract
    Keywords: health, Agriculture, productivity, Poverty, Farmers, Efficiency, Stochastic, Production, Science and technology, Institutional change, Innovation,
    Date: 2009
  2. By: Asenso-Okyere, Kwadwo; Workneh, Sindu; Rhodes, Edward; Sutherland, John
    Abstract: "The civil war in Sierra Leone, caused by a mix of political, social, and economic factors, had a huge impact on the overall economy in general and on the performance of the agricultural sector in particular. The agricultural research system of Sierra Leone was severely affected by the civil war. Research infrastructure was destroyed, laboratories were damaged and abandoned, and well-trained researchers and scientists fled from the country. With the cessation of hostilities in 2002, the government of Sierra Leone concentrated its efforts on the resettlement of displaced persons and on social and economic reconstruction. The efforts of the government include the rehabilitation and reorganization of the former National Agricultural Research Coordinating Council (NARCC), which was coordinating agricultural research in Sierra Leone. The Sierra Leone Agricultural Research Institute (SLARI) Act was passed by the parliament of Sierra Leone in 2007 to replace NARCC. As a new organization, SLARI needed to make strategic decisions to guide its operations in order to make it effective in responding to the demands of stakeholders within the food and agriculture system. To provide a focus for SLARI and link its agenda to national development priorities, a strategic plan and operational plan were developed. The methodology used to design the SLARI strategic plan applied an organizational innovation model through which the plan was nested within the strategic plan of the Forum for Agricultural Research in Africa (FARA) and Conseil Ouest et Center Africain pour la Recherche et le Développement Agricoles (CORAF) / West and Central African Council for Agricultural Research and Development (WECARD), and the operational plan was hinged on Comprehensive African Agricultural Development Program (CAADP) and Framework for African Agricultural Productivity (FAAP) principles. This would ensure synergy with regional and subregional strategies. The strategic plan would promote increased coordination, interaction, interlinkages, partnerships, and networks among the various agents associated with agricultural research for development systems in Sierra Leone. It would also help achieve SLARI's vision of increasing food security and wealth among Sierra Leone's rural population. For SLARI to make a meaningful contribution to agricultural development in Sierra Leone, the operational plan must be implemented in such a way that the results envisaged in the strategic plan can be achieved. This requires funds and commitment from all stakeholders, especially the government of Sierra Leone." from authors' abstract
    Keywords: war, Agriculture, Development, Research, Strategic plan, Operational plan, Science and technology, Agricultural research,
    Date: 2009
  3. By: Fridfinnson, Brooke; Rude, James
    Keywords: biofuel, Agricultural and Food Policy, Demand and Price Analysis, International Relations/Trade,
    Date: 2009–04
  4. By: Massey, Ray
    Abstract: Presented to USDA Economists Group, Washington DC
    Keywords: cap and trade, agriculture, offsets, credits, sequestration, Agribusiness, Agricultural and Food Policy, Environmental Economics and Policy, Farm Management, Livestock Production/Industries, Resource /Energy Economics and Policy, Q,
    Date: 2009–05–27
  5. By: Loening, Josef L.; Durevall, Dick; Birru, Yohannes A.
    Abstract: Ethiopia has experienced a historically unprecedented increase in inflation, mainly driven by cereal price inflation, which is among the highest in Sub-Saharan Africa. Using monthly data from the past decade, the authors estimate error correction models to identify the relative importance of several factors contributing to overall inflation and its three major components, cereal prices, food prices, and non-food prices. The main finding is that, in a longer perspective, over three to four years, the main factors that determine domestic food and non-food prices are the exchange rate and international food and goods prices. In the short run, agricultural supply shocks and inflation inertia strongly affect domestic inflation, causing large deviations from long-run price trends. Money supply growth does affect food price inflation in the short run, although the money stock itself does not seem to drive inflation. The results suggest the need for a multi-pronged approach to fight inflation. Forecast scenarios suggest monetary and exchange rate policies need to take into account cereal production, which is among the key determinants of inflation, assuming a decline in global commodity prices. Implementation of successful policies will be contingent on the availability of foreign exchange and the performance of agriculture.
    Keywords: Markets and Market Access,Currencies and Exchange Rates,Economic Theory&Research,Food&Beverage Industry,Emerging Markets
    Date: 2009–06–01
  6. By: Meyer, Seth; Westhoff, Pat; Thompson, Wyatt
    Abstract: Analysis of eleven biofuel policy options prepared in response to a request from five Members of Congress.
    Keywords: Agricultural and Food Policy,
    Date: 2009–05
  7. By: Qin, Pin (College of Environmental Sciences and Engineering, Peking University); Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Xu, Jintao (College of Environmental Sciences and Engineering, Peking University)
    Abstract: Various decentralization experiments are currently underway in the Chinese forestry sector. However, a key question often ignored by researchers and policy makers is what farmers really want from reform. This paper addresses this question using a survey-based choice experiment. We investigated farmers’ preferences for various property-rights attributes of a forestland contract. We found that farmers are highly concerned with what types of rights a contract provides. Reducing perceived risks of contract termination and introducing a priority right in the renewal of an old contract significantly increase farmers’ marginal willingness to pay (MWTP) for a forest contract. An extended waiting time for rights to harvest the forest reduces a farmer’s perceived value of a contract. Farmers are also concerned with the tenure length. In one region, the annual willingenss to pay for a 50-year contract is even higher than the annual willingness to pay for 25-year contract.<p>
    Keywords: China; Choice experiment; Forest; MWTP; Property rights
    JEL: D61 Q15 Q23 Q50 Q51
    Date: 2009–06–30
  8. By: Zulauf, Carl; Orden, David
    Keywords: Agricultural and Food Policy, International Relations/Trade,
    Date: 2009
  9. By: Meilke, Karl D.
    Keywords: teaching, agricultural, trade, Agricultural and Food Policy, International Relations/Trade, Teaching/Communication/Extension/Profession,
    Date: 2009–05
  10. By: Esther Duflo; Michael Kremer; Jonathan Robinson
    Abstract: While many developing-country policymakers see heavy fertilizer subsidies as critical to raising agricultural productivity, most economists see them as distortionary, regressive, environmentally unsound, and argue that they result in politicized, inefficient distribution of fertilizer supply. We model farmers as facing small fixed costs of purchasing fertilizer, and assume some are stochastically present-biased and not fully sophisticated about this bias. Even when relatively patient, such farmers may procrastinate, postponing fertilizer purchases until later periods, when they may be too impatient to purchase fertilizer. Consistent with the model, many farmers in Western Kenya fail to take advantage of apparently profitable fertilizer investments, but they do invest in response to small, time-limited discounts on the cost of acquiring fertilizer (free delivery) just after harvest. Later discounts have a smaller impact, and when given a choice of price schedules, many farmers choose schedules that induce advance purchase. Calibration suggests such small, time-limited discounts yield higher welfare than either laissez faire or heavy subsidies by helping present-biased farmers commit to fertilizer use without inducing those with standard preferences to substantially overuse fertilizer.
    JEL: O12 O33
    Date: 2009–07
  11. By: Bakhshi, Samira; Kerr, William A.
    Abstract: The shift of the farm subsidies toward programs classified as being decoupled income supports in the WTOâs URAA raises the question of their true impact on production and trade. In this study, we measured the acreage effects of the Canadian whole farm programs under uncertainty. Based on the theoretical discussions regarding the role of the insurance effect in acreage decisions, we extend the theoretical restrictions examined by Chavas and Holt (1990)which enables us to include this effect in our model specification. Hence, we modified the expected utility maximization framework (under the hypothesis that farmers are risk averse)developed by Chavas and Holt (1990) and derived three distinct effects: market effects, the wealth effect, and the insurance effect.
    Keywords: WTO, decoupled, green box, area, production, Agricultural and Food Policy, Crop Production/Industries, International Relations/Trade, Production Economics,
    Date: 2009–05
  12. By: Gomez, Miguel I.; Nunez, Hector M.; Onal, Hayri
    Abstract: The spread of Asian Soybean Rust (ASR) represents a real threat to the U.S. soybean sector. We assess the potential impacts of ASR on domestic soybean production and commodity markets as well as the competitive position of the US in the soybean export market. We develop a mathematical stochastic dynamic sector model with endogenous prices to assess the economic impacts of ASR on US agriculture. The model takes into account the disease spread during the cropping season, the inherent uncertainty regarding the risk of infection, and the dichotomous decisions that farmers make (no treatment, preventive treatment, and curative treatment) facing the risk of infection. Our results suggest substantial impacts from potential ASR spread on agricultural output, prices and exports. Our simulation results suggest that substantial losses to the US soybean producers may be avoided by establishing effective soybean rust controls. ASR control policies can be particularly efficient if applied in the gateway regions on the path of the ASR spread. On the other hand, our results indicate a possible gradual shift in soybean production from lower-latitude states toward higher-latitude states.
    Keywords: Asian Soybean Rust, Stochastic Models, Dynamic Models, Agribusiness, Marketing, C61, Q13,
    Date: 2009–04–30
  13. By: Solène Larue; Laure Latruffe
    Abstract: The objective of the paper is to assess the effects of spatial agglomeration on the technical efficiency of French pig farms. We use a two-stage method with the first stage consisting of calculating the efficiency scores of pig activity with the non-parametric Data Envelopment Analysis (DEA) method, and the second stage being a regression of these scores on agglomeration variables. Data consist of 936 French pig producers in 2004. Results suggest that these farms were as much affected by positive agglomeration externalities (in the form of knowledge spillovers due to the density of farms, and arising from their closeness to downstream markets) as any other businesses. Our analysis also sheds light on the specificity of the sector, namely that environment pressures can force pig farmers to be more efficient, an effect that may be counteracted when legal dispositions relating to manure spreading are too stringent.
    Keywords: technical efficiency, Data Envelopment Analysis, agglomeration, environmental regulation, hog production, France
    JEL: Q12 R3
    Date: 2009
  14. By: Katrin Millock; Céline Nauges
    Date: 2009–06
  15. By: Wiesmann, Doris; Bassett, Lucy; Benson, Todd; Hoddinott, John
    Abstract: "The objective of this study is to validate the World Food Programme's (WFP) method of establishing the prevalence of food insecurity. WFP's method has two parts: (1) the construction of a Food Consumption Score (FCS) and (2) the classification of food security status based on the FCS. Our validation work has the following components: (1) collecting and analyzing survey data from three countries—Burundi, Haiti, and Sri Lanka—that contain information about calorie consumption at the household level and information needed to construct the FCS; (2) establishing the extent to which an assessment of food security status based on the FCS mimics food security status based on household calorie consumption; and (3) assessing whether changes to the construction of the FCS would improve its predictive power and whether such changes are feasible, given the environment in which these assessments are typically conducted. To achieve the third objective, alternative dietary diversity and food frequency indicators are constructed by either modifying WFP's calculation method for the FCS or following a different approach, such as that for the Household Dietary Diversity Score developed by the Food and Nutrition Technical Assistance Project. By comparing indicator performance, we can answer the questions of whether the FCS could be simplified by using food group diversity instead of food frequency by food group, if further disaggregation of food groups would improve its validity, and what the merits and demerits of other aspects of WFP's standard method are. Based on our findings about the validity of the FCS and the results for alternative proxy indicators, we then suggest changes to the construction of the FCS. Our findings on the usefulness of the FCS are encouraging. The same holds true for the alternative indicators of dietary diversity and food frequency we considered. There are positive and statistically significant associations with calorie consumption per capita, particularly when small quantities are excluded from food frequencies. In two out of three study sites, food frequency scores are clearly superior to simpler measures of diet diversity (food or food group count). Higher levels of disaggregation are advantageous, but with diminishing marginal returns. We note, however, that the provision of food aid seems to weaken the association of the FCS with calorie consumption. All of these observations support the use of WFP's FCS for food security assessments. However, the cutoff points used by WFP to define poor, borderline, and adequate Food Consumption Groups are too low when the FCS classification is compared to estimates of calorie deficiency from our survey data and other sources. As a food security classification device, the FCS could be improved by excluding foods consumed in small quantities from the FCS and, even more important, adjusting the cutoffs used to classify households as having poor, borderline, or acceptable food security. Minor gains in the validity of the FCS could be achieved by making several technical adjustments to the calculation of the FCS, for example, using a 12-group food classification instead of an 8-food group classification. This study has several limitations. We did not validate the proxy indicators against diet quality, because this would have required the collection of individual 24-hour recall data for all household members, which was beyond the scope of our study. The use of seven-day household recall data is a limitation for our analysis; information on dietary intakes from individual 24-hour recalls is generally considered more accurate. The lack of precise information on the effects of excluding small quantities from food frequencies is another constraint." from authors' abstract
    Keywords: food security, Dietary diversity, Food frequency, Proxy indicators, Food consumption score, Validation study,
    Date: 2009
  16. By: de Moraes, Marcia Maria Guedes Alcoforado; Cai, Ximing; Ringler, Claudia; Albuquerque, Bruno Edson; da Rocha, Sérgio P. Vieira; Amorim, Carlos Alberto
    Abstract: "Water management in the Pirapama River Basin in northeastern Brazil is affected by both water quantity and water quality constraints. The region is known for significant sugarcane-based ethanol production—which is key to the Brazilian economy and expected to grow dramatically under recent global changes in energy policy. Sugarcane production in the region goes hand in hand with controlled fertirrigation practices with potentially significant adverse impacts on the environment. To assess sustainable water allocation in the basin, an integrated hydrologic-economic basin model is adapted to study both water quantity and water quality aspects. The model results show that incorporating water quality aspects into water allocation decisions leads to a substantial reduction in application of vinasse to sugarcane fields. To enforce water quality restrictions, the shadow price for maintaining water in the reservoir could be used as a pollution tax for fertirrigated areas, which are currently not subject to pollution charges." from authors' abstract
    Keywords: Water quality, River basin model, Integrated economic-hydrologic modeling, Nonlinear optimization, Biofuels, Water resources, Environmental impacts,
    Date: 2009
  17. By: Meilke, Karl D.
    Keywords: teaching, trade, welfare, Agricultural and Food Policy, International Relations/Trade, Teaching/Communication/Extension/Profession,
    Date: 2009–05
  18. By: Cho, Jaesung; Nakane, Matsato; Tauer, Loren W.
    Abstract: The impact of inputs on the four decomposed milk outputs of fluid milk, butterfat, protein, and other solids were estimated using an output distance function, with New York dairy farm level data. Differential impacts of inputs on component production indicate that milk component composition can be modified given component prices.
    Keywords: milk component production, output distance function, Agribusiness, Farm Management,
    Date: 2009–04–23
  19. By: Mohapatra, Sanket; Joseph, George; Ratha, Dilip
    Abstract: Macro- and micro-economic evidence suggests a positive role of remittances in preparing households against natural disasters and in coping with the loss afterwards. Analysis of cross-country macroeconomic data shows that remittances increase in the aftermath of natural disasters in countries that have a larger number of migrants abroad. Analysis of household survey data in Bangladesh shows that per capita consumption was higher in remittance-receiving households than in others after the 1998 flood. Ethiopian remittance-dependent households seem to use cash reserves rather than sell livestock to cope with drought. In Burkina Faso and Ghana, international remittance-receiving households, especially those receiving remittances from high-income developed countries, tend to have housing built of concrete rather than mud and greater access to communication equipment, suggesting that they are better prepared against natural disasters.
    Keywords: Population Policies,Access to Finance,Remittances,Natural Disasters,Debt Markets
    Date: 2009–06–01
  20. By: Alvarez-Cuadrado, Francisco (McGill University); Poschke, Markus (McGill University)
    Abstract: The process of economic development is characterized by substantial rural-urban migrations and a decreasing share of agriculture in output and employment. The literature highlights two main engines behind this process of structural change: (i) improvements in agricultural technology combined with the effect of Engel's law of demand push resources out of the agricultural sector (the "labor push" hypothesis), and (ii) improvements in industrial technology attract labor into this sector (the "labor pull" hypothesis). We present a simple model that features both channels and use it to explore their relative importance. We evaluate the U.S. time series since 1800 and a sample of 13 industrialized countries starting in the 19th century. Our results suggest that, on average, the "labor pull" channel dominates. This contrasts with popular modeling choices in the recent literature.
    Keywords: growth, structural change
    JEL: O11 O41
    Date: 2009–06
  21. By: Yu, Li; Orazem, Peter; Jolly, Robert W.
    Abstract: Rural firms have a higher survival rate than urban firms. Over the first 13 years after firm entry, the hazard rate for firm exits is persistently higher for urban firms. While differences in firm attributes explain some of the rural-urban gap in firm survival, rural firms retain a survival advantage 18.5% greater than observationally equivalent urban firms. We argue that in competitive markets, the remaining survival advantage for rural firms must be attributable to unobserved factors that must be known at the time of entry. A plausible candidate for such a factor is thinner markets for the capital of failed rural firms. The implied lower salvage value of rural firms suggests that firms sorting into rural markets must have a higher probability of success in order to leave their expected profits equal to what they could earn in an urban market.
    Keywords: Rural, urban, entry, exit, survival, sorting , salvage value
    JEL: R0
    Date: 2009–07–03
  22. By: Kumarappan, Subbu; Joshi, Satish; MacLean, Heather
    Abstract: Published in BioResources, Volume 4, Number 3, 2009, Pages 1070-1087.
    Keywords: Biomass Supply, Resource Assessment, Lignocellulosic Biomass, Crop Production/Industries, Demand and Price Analysis, Production Economics, Resource /Energy Economics and Policy, Q42, Q11, Q2, Q20, Q29,
    Date: 2009–08

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