nep-agr New Economics Papers
on Agricultural Economics
Issue of 2009‒07‒28
sixteen papers chosen by
Angelo Zago
University of Verona

  1. Impact of Trade Facilitation Measures and Regional Trade Agreements on Food and Agricultural Tarde in South Asia By Jeevika Weerahewa
  2. Prospects for BT Cotton In Mozambique. By Raul Pitoro; Tom Walker; David L. Tschirley; Scott Swinton; Duncan Boughton; Higgino de Marule
  3. Markets - Water Markets: Australia’s Murray-Darling Basin and the US Southwest By Gary D. Libecap; R. Quentin Grafton; Clay Landry; J.R. O’Brien
  4. Total Factor Productivity Growth when Factors of Production Generate Environmental Externalities By Anastasios Xeapapadeas; Dimitra Vouvaki
  5. Market-Based Approaches to Environmental Management: A Review of Lessons from Payment for Environmental Services in Asia By Bhim Adhikari
  6. Pass-Through in United States Beef Cattle Prices By Huan Zhao; Xiaodong Du; David A. Hennessy
  7. Adverse health effects, risk perception and pesticide use behavior By Khan, Muhammad
  8. The power of information : the impact of mobile phones on farmers'welfare in the Philippines By Labonne, Julien; Chase, Robert S.
  9. Carbon Markets and their Implications for Natural Resource Management in Australia By Andrew Reeson
  11. Multilateral comparison of total factor productivity and convergence in Italian agriculture (1951-2002) By Paolo Pierano
  12. Mapping of Forest Biodiversity Values: A Plural Perspective By Paulo A.L.D. Nunes; Elena Ojea; Maria Loureiro
  13. The impact of the increase in food prices on child poverty and the policy response in Mali By Sami Bibi; John Cockburn; Luca Tiberti; Massa Coulibaly
  14. Trade Facilitation and Expanding the Benefits of Trade: Evidence from Firm Leval Data By Yue Li; John S. Wilson
  15. The political economy of Land Reform: A new perspective applied to Latin America By Miguel Rocha de Sousa
  16. Performance Payments for Environmental Services : Lessons from Economic Theory on the Strength of Incentives in the Presence of Performance Risk and Performance Measurement Distortion By Astrid Zabel; Brian Roe

  1. By: Jeevika Weerahewa (University of Peradeniya, Peradeniya Sri Lanka)
    Abstract: The study assess the extent to which trade facilitation in South Asia help to improve trade flows in South Asian countries and their trading partners.
    Keywords: Trade Facilitation, Regional Trade Agreements, Food and Agricultural Trade, South Asia
    JEL: F1
    Date: 2009–06
  2. By: Raul Pitoro; Tom Walker; David L. Tschirley; Scott Swinton; Duncan Boughton; Higgino de Marule
    Abstract: ique’s cotton sector is very important to the economy and to poverty reduction in the rural sector. Cotton production in Mozambique is characterized by low levels of productivity, low prices and low returns. Cotton farmers in Mozambique are often no better off than their neighbors who do not grow cotton. Not surprisingly, many cotton farmers have switched to other crops such as sesame. But the Government of Mozambique and the National Cotton Institute (INE) are committed to improving the profitability of the cotton sector and encouraging new investments by international companies. Looking at cotton production globally, the most important innovation in recent years has been the introduction of transgenic Bt cotton. Bt cotton varieties have built-in resistance to bollworm, a devastating insect pest. Cotton production in countries that have introduced Bt varieties, like India, China and the United States, has soared. Yet no country in Sub-Saharan Africa (SSA), with the exception of South Africa, has yet introduced Bt cotton. Burkina Faso is at an advanced stage of testing. Mozambique should not ignore the single most important technical advance in rain-fed cotton production in the past decade. What are the potential benefits and costs to Mozambique from the introduction of Bt cotton? Would it be profitable for farmers to adopt? What would be the effects of adoption on poverty? If the results are potentially profitable what steps need to be taken and by who to realize the potential gains? This working paper answers these questions by conducting first a detailed review of the experience of other countries who have adopted Bt cotton, and then an economic ‘experiment’ to estimate the expected profitability of cotton production based on farm-level cotton pest control and crop management data.
    Keywords: bio technology, cotton, Mozambique, Africa
    JEL: Q16
    Date: 2009–06
  3. By: Gary D. Libecap; R. Quentin Grafton; Clay Landry; J.R. O’Brien
    Abstract: Worldwide supplies of fresh water are increasingly scarce relative to demand. This problem is likely to be exacerbated with climate change. In this paper, we examine water markets in both Australia’s Murray Darling Basin and the western US and their prospects for addressing water scarcity. The two regions share a number of important similarities including: climate variability that requires investment in reservoirs to make water available in low-rainfall periods; the need for internal and cross-border (state) water management; an historical major allocation of water to irrigators; increasing competition among different uses (agricultural, environmental and recreational in situ uses, urban demand); and the potential for water trading to more smoothly and quickly allocate water across these competing uses. A comparison of the two regions provides important insights about how economic factors can encourage more efficient water allocation, market structure and government regulation.
    Date: 2009–07
  4. By: Anastasios Xeapapadeas (Athens University of Economics and Business); Dimitra Vouvaki (University of Crete)
    Abstract: Total factor productivity growth (TFPG) has been traditionally associated with technological change. We show that when a factor of production, such as energy, generates an environmental externality in the form of CO2 emissions which is not internalized because of lack of environmental policy, then TFPG estimates could be biased. This is because the contribution of environment as a factor of production is not accounted for in the growth accounting framework. Empirical estimates confirm this hypothesis and suggest that part of what is regarded as technology’s contribution to growth could be attributed to the use of environment in output production.
    Keywords: Total Factor Productivity, Sources of Growth, Environmental Externalities, Energy, Environmental Policy
    JEL: O47 Q20 Q43
    Date: 2009–03
  5. By: Bhim Adhikari
    Abstract: In this paper, we review several case studies from Asia on payment for environmental services to understand how landowners decide to participate in payment for environmental services (PES) schemes. The analysis demonstrates the significance of four major elements facilitating the adoption and implementation of PES schemes: property rights and tenure security, transaction costs, household and community characteristics, communications, and the availability of PES-related information. PES schemes should target win-win options through intervention in these areas, aimed at maintaining the provision of ecological services and improving the conditions for local inhabitants. [WP No. 134].
    Keywords: resource management, forestry sector, Indonesia, Asia, payment for environmental services, PES, property rights, security, transaction costs, household, community, communications, ecological srvices, local inhabitants, Philippines, Information, socio-ecological, Viet Nam
    Date: 2009
  6. By: Huan Zhao; Xiaodong Du (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); David A. Hennessy (Center for Agricultural and Rural Development (CARD))
    Abstract: Feeder cattle are fattened to become fed live cattle six months later. The U.S. feeder cattle industry is intensively competitive, so that market efficiency suggests feeder cattle prices should fully reflect feed prices and information on future fed cattle prices. Employing a long time series (1979-2004) of feeder cattle futures, live cattle futures, and local corn prices, we test whether complete pass-through occurs. The results indicate that an increase of a dollar per hundred pounds in the live cattle price leads to an increase of approximately $1.48 per hundred pounds in the feeder cattle price in one month, about 93% of complete pass-through. The corresponding negative effect of a corn price increase is about 87% of complete pass-through. By contrast with agricultural land markets, the results support the hypothesis of Ricardian rent extraction by the scarce asset owner in feeder cattle markets. The results also provide evidence in favor of informational efficiency in futures markets.
    Keywords: feeder cattle, futures market efficiency, live cattle, structural change. JEL Classification: D4; Q13.
    Date: 2009–07
  7. By: Khan, Muhammad
    Abstract: The use of pesticides on the farm is largely governed by voluntary behavior. It is important to understand what drives farmer’s behavior of pesticide use. Health belief models in public health and social psychology argue that persons who have had adverse health experiences are likely to undertake greater preventive behavior which was tested here. We drew a survey of 163 farmers in, Vehari and Lodhran District of southern Punjab. Almost all the farmers were found, using pesticides extensively and covering their body partially. Resultantly more than 77% farmers experienced at least one health symptom. The analysis appeared to confirm the hypothesis that Farmers who have experienced health problems from pesticide are having heightened concern about health effects of pesticides, than farmers who have not experienced such problems. Farmers who report experiencing such problems are also more likely to report using protective clothing than farmers who do not report having such problems. The study however, does not support the hypothesis that Farmers who have had experienced health problems from pesticides are likely to use alternative pest management practices. Finally study concludes that to improve practices of pesticide use, specific and relevant information through training programs should be provided to farmers focusing health and environmental risks of pesticide use.
    Keywords: Health experiences; risk perception; health belief; pesticide use behavior
    JEL: I12 A14
    Date: 2009–06–23
  8. By: Labonne, Julien; Chase, Robert S.
    Abstract: The authors explore the impact of access to information on poor farmers’ consumption. The analysis combines spatially coded data on mobile phone coverage with household panel data on farmers from some of the poorest areas of the Philippines. Both the ordinary least squares and instrumental variable estimates indicate that purchasing a mobile phone has a large, positive impact on the household-level growth rate of per capita consumption. Estimates range from 11 to 17 percent, depending on the sample and the specification chosen. The authors perform a range of reliability tests, the results of which all suggest that the instruments are valid. They also present evidence consistent with the argument that easier access to information allows farmers to strike better price deals within their existing trading relationships and to make better choices in terms of where they choose to sell their goods.
    Keywords: E-Business,Access to Finance,Rural Poverty Reduction,Debt Markets,Poverty Lines
    Date: 2009–07–01
  9. By: Andrew Reeson (CSIRO Sustainable Ecosystems, Australia)
    Abstract: Just as the world must adapt to climate change, it must also adapt to carbon markets. While some industries see carbon markets as a threat, many conservationists see a major opportunity. This paper considers implications of carbon markets for natural resource management (NRM) in Australia. There are in fact a range of distinct, but overlapping carbon markets. These range from international compliance markets (the Kyoto Protocol flexibility mechanisms) through national compliance markets (such as Australia’s proposed emissions trading scheme) to unregulated voluntary markets. While NRM is intimately linked to the global carbon cycle, it has a very limited role in existing and proposed carbon markets. The only significant direct impact likely up to 2015 is a small increase in tree planting. While trees have excellent potential to sequester carbon, the incentives for tree planting will be relatively small, given the limited scope of Australia’ proposed emissions reductions and the ability to import carbon credits from international markets. NRM managers should continue to manage carbon as one of a suite of issues without expecting rivers of gold to flow from carbon markets. Some may choose to participate directly in carbon markets, although this is inherently risky given their ill-defined and rapidly evolving nature. There is a need to develop improved understanding of carbon stocks and flows in the landscape, at both national and local scales. New institutions will be needed to secure carbon opportunities from agriculture and land management while also recognising other social and environmental objectives.
    Keywords: carbon trading; emissions trading; environment; agriculture
    JEL: Q50 Q52 Q54 Q57 Q58
    Date: 2009–06
  10. By: Witt, Rudolf; Waibel, Hermann
    Abstract: Climate risk is particularly burdensome to small-scale farmers in developing countries due to heavy dependence on natural resources, limited and erratic rainfall with high inter- and intra-annual variability, and other natural calamities. Numerous studies on climate change suggest that climate variability is expected to increase in the next few decades, and that it is likely to be severe for tropical areas. For the design of better intervention strategies that are capable to stabilize the incomes of the poor and decrease vulnerability, it is mandatory to have a good understanding of the livelihoods of rural populations, and the risks they are facing.<br />This paper presents an approach to measuring climate risk and its impact on livelihood outcomes in fishery-dependent communities in the ya\'eres floodplain (Far North Province of Cameroon) by applying portfolio theory and stochastic dominance rules. The focus of the analysis is put on the question, how portfolio decisions of households affect income and risk in different production systems. Assuming possible future scenarios we can derive approximate predictions of the effects of climate change and rural development interventions on income and the "riskiness" of different activity portfolios. The results suggest that the diversification effect in the study area is limited due to high correlation of income flows from different activities. However, we show that development intervention strategies, which particularly aim at changing the covariation structure of income flows, are most successful in reducing risk, and potentially increasing income.
    Keywords: Climate risk, agricultural diversification, portfolio theory, Sub Saharan Africa
    JEL: G11 Q12 Q54
    Date: 2009–07
  11. By: Paolo Pierano
    Abstract: This article uses the index number approach to estimate the regional differences of agricultural output, input and total factor productivity (TFP) in Italy. Data cover the period 1951 to 2002 and are taken from Agrefit, which is a new database of Italian agriculture at regional level. Comparisons across space and time are constructed in two steps: first, bilateral Fisher indexes, which are not transitive, are spatially chained to obtain transitivity, using the EKS method, then, multilateral indexes are linked chronologically over time by means of the so-called TFGG method, which satisfies temporal fixity. The second focus of the paper is to test for convergence in agricultural productivity. We consider the problems of heterogeneity and stability of cross-section growth regressions using a hierarchical Bayesian method based on panel data.
    Keywords: Index number approach, Agricultural TFP, Multilateral comparisons, Panel data, Regional convergence.
    JEL: Q11 C43 O47
    Date: 2009–02
  12. By: Paulo A.L.D. Nunes (Venice International University and Fondazione Eni Enrico Mattei); Elena Ojea (IDEGA-Universidade de Santiago de Compostela); Maria Loureiro (Universidade de Santiago de Compostela)
    Abstract: The Millennium Ecosystem Assessment is built on a conceptual framework that links biodiversity to the services ecosystems provide to society. Based on this framework, we first compile market and non-market forest valuation studies and, secondly, explore the potential of an econometric modeling exercise by conducting a world wide meta-analysis. This exercise aims to highlight the mapping of biodiversity indicators and assesses their respective role on the valuation exercise. Our results show that biodiversity loss is having an effect on forest ecosystem values. In addition, these effects reveal to be dependent on the type of services and global geo-climatic regions.
    Keywords: Millennium Ecosystems Approach, Biodiversity Loss, Meta-Analysis, Market Valuation, Non-Market Valuation, Forests
    JEL: Q57
    Date: 2009–01
  13. By: Sami Bibi; John Cockburn; Luca Tiberti; Massa Coulibaly
    Abstract: Since 2006, Mali has experienced the full effects of the global food crisis, with price increases of up to 67%. This study presents simulations of the impacts of this crisis and a number of policy responses with respect to the welfare of children. The impacts are analyzed in terms of monetary (food) poverty, nutrition, education, child labor and access to health services of children. According to simulations, food poverty among children would have increased from 41% to 51%, with a corresponding rise in caloric insufficiency from 32% to 40%, while the impacts on school participation, work and access to health services would have been relatively weak.
    Keywords: child education; child health; child labour; child poverty; economic crisis; food crises; nutrition;
    JEL: E39
    Date: 2009
  14. By: Yue Li; John S. Wilson (the World Bank, Washington D.C, USA)
    Abstract: Existing empirical studies on trade costs and trade facilitation largely focus on aggregate impacts of reform due to data availability. We take a step toward filling in this gap in literature. Using the World Bank Enterprises Surveys, the study extends the scope of empirical literature to firm dimension with a focus on SMEs.
    Keywords: Trade Facilitation, Expanding the Benefits of Trade
    JEL: F1
    Date: 2009–07
  15. By: Miguel Rocha de Sousa (Department of Economics, University of Évora; NICPRI-UE)
    Abstract: We define in section 1 our notion of land reform, on section 2, the most important social and political movements of land reform in Latin America are presented. On section 3 we use a theoretical model in the context of economic growth with human capital learning-by-doing to evaluate land reforms. Section 4, discusses the results. Section 5 presents some economic efficiency estimates for the “Cédula” project of 2000 in NE Brazil - a market led land bill project, sponsored by the World Bank (WB) and the Ministry of Agricultural Development (MDA). Finally, section 6 concludes, and section 7 presents the references.
    Keywords: Brazil, “Cédula”, human capital, Land Reform, Latin America, Learning by doing, “MST - Movimento dos Sem Terra”.
    JEL: Q15
    Date: 2009
  16. By: Astrid Zabel (Environmental Policy and Economics PEPE, Institute for Environmental Decisions IED, ETH Zurich); Brian Roe (Department of Agricultural, Environmental and Development Economics, Ohio State University, Columbus, OH, USA)
    Abstract: Payments for environmental services (PES) schemes have become an increasingly accepted and popular mode for governmental and non-governmental agencies to use in addressing local and regional declines in ecosystem services. A defining characteristic of performance payments, a sub-category of PES schemes, is the linking of individual payments to environmental outputs themselves rather than to the inputs that affect the production of environmental services. Such a focus raises several practical issues during implementation. We review and translate key aspects of the economic theory of incentives into the context of performance payments schemes with special attention paid to two practical issues. The first is that of structuring individual incentives to account for risks outside the individual’s control such as weather that can affect the level of environmental services generated. The second deals with the possibility of distortion in the measurements of environmental services used to determine individual payments under PES schemes. Each challenge is accompanied by a discussion of advice based upon economic theory and a discussion of examples from different countries where such implementation issues arise.
    Keywords: Optimal Incentive Contracts, Payments for Environmental Services, Performance Incentives, Distortion
    JEL: Q20
    Date: 2009–06

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