New Economics Papers
on Agricultural Economics
Issue of 2009‒11‒07
eighteen papers chosen by

  1. Agrarian Reform in Kyrgyzstan: Achievements and the Unfinished Agenda By Lerman, Zvi; Zedik, David
  2. Dynamically Optimal Phosphorus Management and Agricultural Water Protection By Iho, Antti; Laukkanen, Marita
  3. Can a market-assisted land redistribution program improve the lives of the poor ? evidence from Malawi By Datar, Gayatri; Del Carpio, Ximena; Hoffman, Vivian
  4. Analyzing Factors Affecting U.S. Food Price Inflation. By Baek, Jungho; Koo, Won
  5. Fiscal Stimulus, Agricultural Growth and Poverty in Asia and the Pacific Region: Evidence from Panel Data By Raghav Gaiha; Katsushi S. Imai; Ganesh Thapa; Woojin Kang
  6. Land Reform and Farm-Household Income Inequality: The Case of Georgia By Kimhi, Ayal
  7. Modeling acreage decisions within the multinomial Logit framework By Alain Carpentier; Elodie Letort
  8. The impact of banning export of cereals in response to soaring food prices: Evidences from Ethiopia using the new GTAP African database By Woldie, Getachew Abebe; Siddig, Khalid
  9. Environmental Services and Poverty Alleviation: Either, or, or both? By Ben Groom; Charles Palmer
  10. South Dakot Grain Elevators: Manage Characteristics and Impact of Ethanol By Yonas Hamda; Bashir Qasmi; Scott Fausti
  11. Microinsurance, Trust and Economic Development: Evidence from a Randomized Natural Field Experiment By Hongbin Cai; Yuyu Chen; Hanming Fang; Li-An Zhou
  12. Land rights insecurity and temporary migration in rural China By Maëlys de la Rupelle; Quheng Deng; Shi Li; Thomas Vendryes
  13. Sole-Source Contracts in WIC Infant-Formula Rebate Auctions and their Effect on Manufacturers’ Markups By David E. Davis
  14. The Life Satisfaction Approach to Environmental Valuation By Frey, Bruno S.; Luechinger, Simon; Stutzer, Alois
  15. (In)Efficient Management of Interacting Environmental Bads By Kuosmanen, Timo; Laukkanen, Marita
  16. A cluster-based approach as an effective way to implement the ECAP (Environmental Compliance Action Program): evidence from some good practices By Tiberio Daddi; Francesco Testa; Fabio Iraldo
  17. Fixed costs involved in crop pattern changes and agri-environmental schemes By Maria Espinosa-Goded; Pierre Dupraz; Jesùs Barreiro-Hurlé
  18. Left behind to farm ? women's labor re-allocation in rural China By Mu, Ren; van de Walle, Dominique

  1. By: Lerman, Zvi; Zedik, David
    Keywords: Agricultural and Food Policy, International Development, Land Economics/Use,
    Date: 2009
  2. By: Iho, Antti; Laukkanen, Marita
    Abstract: This paper puts forward a model of the role of phosphorus in crop production, soil phosphorus dynamics and phosphorus loading that integrates the salient economic and ecological features of agricultural phosphorus management. The model accounts for the links between phosphorus fertilization, crop yield, accumulation of soil phosphorus reserves, and phosphorus loading. It can be used to guide precision phosphorus management and erosion control as means to mitigate agricultural loading. Using a parameterization for cereal production in southern Finland, the model is solved numerically to analyze the intertemporally optimal combination of fertilization and erosion control and the associated soil phosphorus development. The optimal fertilizer application rate changes markedly over time in response to changes in the soil phosphorus level. When, for instance, soil phosphorus is initially above the socially optimal steady state level, annually matching phosphorus application to the prevailing soil phosphorus stock produces significantly higher social welfare than using a fixed fertilizer application rate. Erosion control was found to increase welfare only on land that is highly susceptible to erosion.
    Keywords: precision nutrient management, agricultural phosphorus loading, cereal production, soil phosphorus reserves, agricultural water pollution, dynamic programming, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy,
    Date: 2009–10
  3. By: Datar, Gayatri; Del Carpio, Ximena; Hoffman, Vivian
    Abstract: This paper uses a rural household survey dataset collected in 2006 and 2008 to investigate the impact of a market-based land resettlement project in southern Malawi. The program provided a conditional cash and land transfer to poor families to relocate to larger plots of farm land. The average treatment effect of the program is estimated using a difference-in-difference matching technique based on propensity score matching; qualitative information complement the analysis to ensure unobservable characteristics do not bias the findings. As expected, the results show a significant effect on landholdings and agricultural production, with land size increasing and maize production increasing by more than 100 kilograms relative to the control. However, the impacts on food security and asset holdings were mixed. Households that relocated great distances had systematically lower impacts than those households that stayed within their district of origin because they had to adapt to unfamiliar agro-ecological, cultural, and market environments. Impacts also varied across gender of the household head; female-headed beneficiary households increased their productive and consumption assets significantly, while male-headed households increased their asset holdings less so.
    Keywords: Environmental Economics&Policies,Rural Development Knowledge&Information Systems,Economic Theory&Research,Debt Markets,Rural Poverty Reduction
    Date: 2009–10–01
  4. By: Baek, Jungho; Koo, Won
    Abstract: Since the summer of 2007, U.S. food price has increased dramatically. Given public anxiety over fast-rising food prices in recent years, this paper attempts to analyze the effects of market factors â prices of energy and agricultural commodities and exchange rate â on U.S. food prices using a co-integration analysis. Results show that the agricultural commodity price and exchange rate play key roles in determining the short- and long-run movement of U.S. food prices. It is also found that in recent years, the energy price has been a significant factor affecting U.S. food prices in the long-run, but has little effect in the short-run. This implies the strong long-run linkage between energy and agricultural markets has emerged through production of commodity-based ethanol in the recent years.
    Keywords: Agricultural commodity price, Energy price, Exchange rate, Food price inflation, Time-series analysis, Agribusiness,
    Date: 2009–09
  5. By: Raghav Gaiha; Katsushi S. Imai; Ganesh Thapa; Woojin Kang
    Date: 2009
  6. By: Kimhi, Ayal
    Abstract: The income inequality implications of land reform are examined for the case of Georgia using regression-based inequality decomposition techniques. An egalitarian land redistribution is likely to equalize per-capita income among farm households, implying that continuing the land reform process in Georgia is likely to benefit poorer households, relatively speaking. However, land fragmentation was found to be disequalizing, and therefore land market developments that enable plot consolidation are not less important for inequality than the land redistribution itself. Both landholdings and farm assets have favorable inequality implications not only through farm income but also through non-farm income, implying that these productive assets increase the economic opportunities of rural households in the non-farm sector as well, perhaps by easing borrowing constraints.
    Keywords: income inequality, land reform, inequality decomposition, Agricultural Finance, Consumer/Household Economics, Farm Management, Land Economics/Use,
    Date: 2009–10
  7. By: Alain Carpentier; Elodie Letort
    Abstract: The Multinomial Logit (MNL) framework has been used in the agricultural production economics literature to model acreage share choices, crop decisions or land use decisions. This article extends the pioneering works of Caswell and Zilberman (1985) and of Wu and Segerson (1995) by developing further the theoretical background of the MNL acreage share models. Two approaches are considered: the “cost function approach” and the “discrete choice approach”. It is then shown that MNL acreage share models can be used to define simple multi-crop econometric models with land as an allocatable fixed input. Finally several generalizations of the standard MNL acreage share model are proposed.
    Keywords: acreage share, discrete choice, multicrop econometric model, multinomial Logit
    JEL: D21 Q15 C51
    Date: 2009
  8. By: Woldie, Getachew Abebe; Siddig, Khalid
    Abstract: In the poorest countries like Ethiopia the spillover effects of a soaring food price is unbearable. To mitigate the recent rise in food prices and the burden on urban poor consumers, different measures have been considered by policy makers. Recently, Ethiopia banned the export of all grain products in a bid to stem huge price hikes. The export of indigenous grains, including the staple grains, like teff, maize, sorghum, and wheat are suspended indefinitely. Using the standard GTAP model and the recent GTAP Africa database, this paper simulates the overall implication of banning export of grains. Regarding the impact on prices, the simulation result tells us that prices are likely to fall. At macro level, the result reveals trade balance will not be decline following such actions. However, it has been shown that in terms of overall welfare the policy has a devastating impact as the country will likely to lose welfare equivalent of $ 148 million.
    Keywords: Food price inflation;- export ban;- WTO:- Ethiopia;- GTAP
    JEL: F13 E31 Q17 D58
    Date: 2009
  9. By: Ben Groom; Charles Palmer
    Abstract: Payments for environmental services (PES) schemes in developing countries face trade-offs between environmental and development objectives. This tension is inherent in cost effective direct PES since, by their very nature, they limit transfers to recipients. However, where recipients of PES are subject to market constraints (e.g. credit rationing, input constraints etc.), we show that indirect payments which relax constraints can be cost effective and achieve both environmental and poverty alleviation objectives. Contrary to where markets are perfect, cost effectiveness is dependent on the nature of the recipient’s production and the severity of constraints. An empirical example from Madagascar illustrates that it is unlikely these dual objectives will be achieved in the case of forest honey production, despite a severe technology constraint. Yet indirect PES schemes are shown to be cost effective where production is more closely linked to land use, such as in agriculture and forestry. This accords with recent work on agri-environmental schemes, which achieved poverty alleviation and environmental objectives by relaxing household constraints. This highlights the need to understand the market conditions, institutional context and production processes of PES recipients.
    Keywords: Payments for environmental services, cost effectiveness, market constraints, poverty alleviation.
    JEL: Q56 Q57 Q12
    Date: 2009
  10. By: Yonas Hamda (Deparment of Economics, South Dakota State University); Bashir Qasmi (Deparment of Economics, South Dakota State University); Scott Fausti (Deparment of Economics, South Dakota State University)
    Date: 2009–09
  11. By: Hongbin Cai (Department of Applied Economics, Guanghua School of Management, Peking University); Yuyu Chen (Department of Applied Economics, Guanghua School of Management, Peking University); Hanming Fang (Department of Economics, University of Pennsylvania); Li-An Zhou (Department of Applied Economics, Guanghua School of Management, Peking University)
    Abstract: We report results from a large randomized natural field experiment conducted in southwestern China in the context of insurance for sows. Our study sheds light on two important questions about microinsurance. First, how does access to formal insurance affect farmers' production decisions? Second, what explains the low takeup rate of formal insurance, despite substantial premium subsidy from the government? We find that providing access to formal insurance significantly increases farmers' tendency to raise sows. We argue that this finding also suggests that farmers are not previously insured efficiently through informal mechanisms. We also provide several pieces of evidence suggesting that trust, or lack thereof, for government-sponsored insurance products is a significant barrier for farmers' willingness to participate in the insurance program.
    Keywords: Microinsurance; Trust, Natural Field Experiment
    JEL: C93 O12 O16
    Date: 2009–09–24
  12. By: Maëlys de la Rupelle; Quheng Deng; Shi Li; Thomas Vendryes
    Abstract: Like most other developing countries, China experiences huge migration outflows from rural areas. Their most striking characteristic is a high geographical and temporal mobility. Rural migrants keep going back and forth between origin villages and destination areas. In this paper, we show that this temporary feature of migration can be linked to land rights insecurity. As village land ownership remains collective and as land use rights can be periodically reallocated, individual out-migration can result in deprivation of those rights. Moreover, the intensity of this insecurity varies according to the village-level management of land and the contractual status of land plots. We use these variations to identify the effect of land rights insecurity on migration behavior. Empirical results based on representative 2002 rural data demonstrate substantial impact.
    Date: 2009
  13. By: David E. Davis (Department of Economics,South Dakota State University)
    Abstract: The WIC program uses an auction to procure infant formula. Manufacturers bid on the right to be an agency’s sole supplier of formula by offering a rebate on formula sold through WIC. Rebates reduce costs, averaging about 90 percent of wholesale prices. However, because rebates are so large, some question the industry’s competitiveness. This paper develops a model for optimal rebates and shows that marginal cost can be estimated from model coefficients and program characteristics. Marginal cost estimates suggest large markups, and elasticities consistent with these markups suggest manufactures price on the demand curve where demand is nearly unit elastic.
    Keywords: Price cost margins, WIC, Oligopoly, Food Assistance, Infant Formula, auctions, contracts
    JEL: L11 L13 I18 D12
    Date: 2009–10
  14. By: Frey, Bruno S. (University of Zurich); Luechinger, Simon (University of Zurich); Stutzer, Alois (University of Basel)
    Abstract: In many countries environmental policies and regulations are implemented to improve environmental quality and thus individuals' well-being. However, how do individuals value the environment? In this paper, we review the Life Satisfaction Approach (LSA) representing a new non-market valuation technique. The LSA builds on the recent development of subjective well-being research in economics and takes measures of reported life satisfaction as an empirical approximation to individual welfare. Micro-econometric life satisfaction functions are estimated taking into account environmental conditions along with income and other covariates. The estimated coefficients for the environmental good and income can then be used to calculate the implicit willingness-to-pay for the environmental good.
    Keywords: life satisfaction approach, subjective well-being, non-market valuation, cost-benefit analysis, air pollution
    JEL: Q51 I31 D61 Q53
    Date: 2009–10
  15. By: Kuosmanen, Timo; Laukkanen, Marita
    Abstract: Many environmental problems involve the transformation of multiple harmful substances into one or more damage agents much in the same way as a firm transforms inputs into outputs. Yet environmental management differs from a firmâs production in one important respect: while a firm seeks efficient input allocation to maximize profit, an environmental planner allocates abatement efforts to render the production of damage agents as inefficient as possible. We characterize a solution to the hmultiple pollutants problem and show that the optimal policy is often a corner solution, in which abatement is focused on a single pollutant. Corner solutions may arise even in well-behaved problems with concave production functions and convex damage and cost functions. Furthermore, even concentrating on a wrong pollutant may yield greater net benefits than setting uniform abatement targets for all harmful substances. Our general theoretical results on the management of flow and stock pollutants are complemented by two numerical examples illustrating the abatement of eutrophying nutrients and greenhouse gases.
    Keywords: climate change, cost-benefit analysis, eutrophication, multiple pollutants, optimal environmental policy, pollution control, Environmental Economics and Policy,
    Date: 2009–10
  16. By: Tiberio Daddi (Scuola Superiore Sant'Anna of Pisa); Francesco Testa (Scuola Superiore Sant'Anna of Pisa); Fabio Iraldo (Scuola Superiore Sant'Anna of Pisa)
    Abstract: SMEs can have a considerable impact on the environment. This is not necessarily through individual pressure, but through their combined total impact across environmental sectors. Most SMEs are ‘vulnerably compliant’, especially due to lack of awareness concering the environmental impacts of their own activities, ignorance of environmental legislation, lack of capacity to tackle their environmental impacts. Within this framework, the networking approach known as the “cluster approach” and, especially, its key-instrument: the Environmental Management System, have shown their ability to strengthen the environmental competence and know-how at the local level, as well as the improvement of environmental performances of both individual SMEs and entire productive areas, considered as a whole. The paper aims at presenting the key methodological and operational issues emerging from local experiences, describing them as good practices, and to explain how the “cluster approach” has been further enhanced by way of a EU-funded LIFE project, currently in progress.
    Date: 2009–01–01
  17. By: Maria Espinosa-Goded; Pierre Dupraz; Jesùs Barreiro-Hurlé
    Abstract: Agri-environmental schemes are the main policy instrument currently available in the European Union to promote environmentally friendly farming practices. Nevertheless, the adoption rate of these measures is still limited. This paper develops a profit maximizer theoretical framework to explain the farmer’s sign-up decision and the area to put under an agri-environmental measure characterised by a change in the crop pattern. The application concerns an agri-environmental measure awarding the introduction of alfalfa in cereal farms in Natura 2000 designated areas of Aragon (Spain). The econometric specification accounts for both the upper censoring of the enrolled area, constrained by the available eligible area, and the self-selection of contractors according to the extra-profit of their enrolment. To test the absence of fixed costs of enrolment, a simple tobit with a lower and an upper bound, that corresponds to the non fixed costs situation, is compared to the censored model with selection. Estimated specifications based on the enrolled area do not provided normally distributed residues and are not suitable to carry out the likelihood ratio test. Estimated specifications based on the share of enrolled area in the eligible area provide normally distributed residues. The likelihood ratio test rejects the absence of fixed costs. Technical factors as well as social capital variables are taken into consideration as determinants of technical and transaction costs. Estimation results show that there is an adoption barrier derived from the know-how affecting the fixed compliance costs of introducing the new crop. In addition, there is an adoption barrier derived from transaction costs which are reduced in the presence of social networks. These results suggest that a non linear payment mechanism or auctions might be suitable to ensure a better coverage of Natura 2000 eligible areas by the contracts, with a limited increase in related public expenditures.
    Keywords: agri-environmental scheme, land use, fixed costs, transaction costs, qualitative and limited dependent variable model
    JEL: Q12 Q15 Q52 Q57 Q58 H23 D23 D24 C24 C34 C51
    Date: 2009
  18. By: Mu, Ren; van de Walle, Dominique
    Abstract: The transformation of work during China’s rapid economic development is associated with a substantial but little noticed re-allocation of traditional farm labor among women, with some doing much less and some much more. This paper studies how the work, time allocation, and health of non-migrant women are affected by the out-migration of others in their household. The analysis finds that the women left behind are doing more farm work than would have otherwise been the case. There is also evidence that this is a persistent effect, and not just temporary re-allocation. For some types of women (notably older women), the labor re-allocation response comes out of their leisure.
    Keywords: Population Policies,Health Monitoring&Evaluation,Gender and Development,Anthropology,Population&Development
    Date: 2009–10–01

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