nep-agr New Economics Papers
on Agricultural Economics
Issue of 2009‒11‒14
twenty papers chosen by
Angelo Zago
University of Verona

  1. Information System for Brand-Variety Performance and Decisions: Study and Application for Cotton in India By Vasant P. Gandhi
  2. Perspectives on the decelerating agricultural society By Tai-Yoo KIM; Almas HESHMATI; Jihyun PARK
  3. Fertilizer Subsidy in India: Who are the Beneficiaries? By Vijay Paul Sharma; Hrima Thaker
  4. The Impact of Domestic and Global Biofuel Mandates on the German Agricultural Sector By Giovanni Sorda; Martin Banse; Claudia Kemfert
  5. Food Insecurity and Its Determinants in Asia and the Pacific By Southgate, Douglas; Coxhead, Ian
  6. Government vs Weather The True Story of Crop Insurance in India By Jennifer Ifft
  7. Biofuels in the world markets: A Computable General Equilibrium assessment of environmental costs related to land use changes By Antoine BOUET; Betina DIMARANAN; Hugo VALIN
  8. More Or Better ? Measuring Quality Versus Quantity In Food Consumption By Corinna Manig; Alessio Moneta
  9. Crop Yield Expectation Stochastic Process with Beta Distribution as Limit, A By David A. Hennessy
  10. Warlords, Famine and Food Aid: Who Fights, Who Starves? By Max Blouin; Stéphane Pallage
  11. Intellectual Property Rights in Indian Agriculture By Jayashree Watal
  12. Economic Policies for Healthier Food Intake: The Impact on Different Household Categories By Nordström, Jonas; Thunström, Linda
  13. The Efficiency of Voluntary Incentive Policies for Preventing Biodiversity Loss By Lewis, David J.; Plantinga, Andrew J.; Nelson, Erik; Polasky, Stephen
  14. Environmental innovation: Using qualitative models to identify indicators for policy By Kanerva, Minna; Arundel, Anthony; Kemp, Rene
  15. A survey on the public perception of CCS in France By Minh Ha-Duong; Ana Sofia Campos; Alain Nadai
  16. Impacts of climate variability on the tuna economy of Seychelles By Jan Robinson; Patrice Guillotreau; Ramòn Jiménez-Toribio; Frédéric Lantz; Lesya Nadzon; Juliette Dorizo; Calvin Gerry; Francis Marsac
  17. On Pricing and Vertical Organization of Differentiated Products By Shi, Guanming; Chavas, Jean-Paul
  18. Accounting for Respondent Uncertainty to Improve Willingness-to-Pay Estimates By Moore, Rebecca; Bishop, Richard C.; Provencher, Bill; Champ, Patricia
  19. A literature review on the links between environmental regulation and competitiveness By Fabio Iraldo; Francesco Testa; Vlasis Oikonomou; Michela Melis; Marco Frey; Eise Spijker
  20. Economies of Scale in Production versus Diseconomies in Transportation: On Structural Change in the German Dairy Industry By Ole Boysen; Carsten Schröder

  1. By: Vasant P. Gandhi
    Abstract: Information on brand-variety performance is critical for small farmers in India since every year they need to make crucial decisions on which brand-variety seeds to plant. The livelihoods from their small farms and returns on all the inputs used depend critically on this decision. Yet no systematic information is available to them on this, and year after year the farmers are forced to decide based on guesses, hearsay and opinions which are frequently imperfect or even biased. Even companies and governments need to know about the actual performance of brand-varieties in different areas so as to be able to recommend correctly. Markedly, on the other hand, official crop-cutting surveys for estimation and assessment of actual yields are a regular feature of all states, and they also record some information regarding the inputs used including the brand-variety. However, the information is never examined from this point of view. Cotton is a major cash crop in India but has substantial problems particularly from extensive pest damage and poor yields. Brand-variety performance varies substantially and poor decisions frequently lead to crop failures and farmer suicides. A study was done on the performance of cotton varieties through a survey across four major Indian states and 694 farmers, covering pest resistance, inputs, yields, quality, price, value of output, cost of cultivation, and profits. This brought out the features and variations, and on this foundation, a brand-variety performance information system is proposed which would draw upon information from the regular crop-cutting surveys, collate it, analyze it, and make findings available to the farmers. This would help provide correct information and advice to farmers over diverse agro-ecological settings. Through this, the farmers would be able to make better informed brand-variety decisions, which would help reduce crop failures and risks and improve farm performance and incomes.
    Date: 2009–10–05
  2. By: Tai-Yoo KIM; Almas HESHMATI; Jihyun PARK (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: In general, societies are divided into agricultural and industrial societies. This study presents perspectives on decelerating agricultural societies. Agricultural demand and supply play major roles in the development of societies. Three theories that describe an agricultural society and its deceleration patterns are described: the neo-classical production function and those articulated by Johnston and Mellor as well as induced innovation by Hayami and Ruttan. Two important cases of decelerating agricultural societies, medieval England and the U.S., are investigated through an examination of the process of agricultural society deceleration and ultimate replacement by an industrial society. The limitations of decelerating agricultural societies, with a focus on structural problems,impacts on industrial structure, and problems of agriculture in market and non-market areas, are discussed. The position of agriculture as described by economic development theory is established by analyzing the stages of economic development, the theory ofstructural change, and the theory of leading industry. Finally, the transition from an agricultural to a commercial society is described with a focus on the formation,development, value creation, and structural limitations of a commercial society.
    Keywords: Agricultural development, Agricultural society, Commercial society, Decelerating society, Economic growth, Induced innovation, Simple reproduction
    JEL: L16 O11 O47 O13
    Date: 2009–01
  3. By: Vijay Paul Sharma; Hrima Thaker
    Abstract: Agricultural subsidies that encourage production and productivity have been widely criticized because of the cost of subsidies and they are perceived to be far from uniformly distributed. There is a general view in academic, policy and political circles that agricultural subsidies are concentrated geographically, they are concentrated on relatively few crops and few producers and in many cases do not reach the targeted group(s). One of the most contentious issues surrounding input subsidies in general and fertilizer in particular in India is how much of what is paid out actually finds its way into the pocket of the farmer, and how much is siphoned away by the input companies.
    Date: 2009–08–01
  4. By: Giovanni Sorda; Martin Banse; Claudia Kemfert
    Abstract: The aim of this work is to evaluate the impact of domestic and global biofuel policies on Germany's agricultural sector. The central part of our study is divided into four sections. Section 2 presents in detail the issues that make biofuels a debated topic in today's economic policies. Fundamental aspects of our energy consumption patterns and the geographic location of our natural resources are highlighted together with a quantitative analysis of the recent surge in biofuels output capacity and estimates of their near-future deployment. An introduction to current and future biofuels production technologies is coupled with an overview of recent studies that assess their net contribution to harmful gaseous emissions and energy efficiency. The concerns associated with rising food prices and their likely causes are then briefly examined. Section 3 provides a thorough description of the subsidy, taxation and protection measures granted to biofuels across the world. Current governmental policies in the EU and its member states are given special attention. Section 4 presents the current literature on economic modelling and focuses on partial equilibrium (AGLINK-COSIMO, Impact, Esim, etc.) and general equilibrium frameworks (EPPA, GTAP, etc.). Section 5 simulates the impact of domestic and global biofuel policies in Germany within a Computable General Equilibrium framework. The LEITAP model is introduced. A description of the analysed scenarios is given on the basis of the envisaged biofuel blending mandates described in section 3. The simulation results are then evaluated with respect to production, prices, international trade and land use of the relevant commodities. The outcome clearly indicates that current biofuels policies significantly affect food markets as well as land allocation. The conclusion summarizes the main findings of our study and draws a comparison with results of other publications.
    Date: 2009
  5. By: Southgate, Douglas (Ohio State University); Coxhead, Ian (University of Wisconsin)
    Abstract: In Asian-Pacific developing countries, the prevalence of food insecurity has diminished dramatically in the past generation. Despite this, many millions continue to suffer from persistent or periodic food insecurity. The causes of food insecurity are both structural and market-related, including influences of public policy on market operations. The most vulnerable populations are those that simultaneously experience both these forms of insecurity. The places they inhabit tend to have poor-quality land, are exposed to climatic and other environmental risks, or both. These same populations either have relatively weak links with the non-food economy, in which higher wages and better income-earning opportunities make food self-sufficiency less important, or are prevented from accessing opportunities in the non-food economy because of poor or misguided policies.
    Date: 2009–04
  6. By: Jennifer Ifft
    Abstract: The government of India started offering widespread crop in insurance in 1985, with the Comprehensive Crop Insurance Scheme. The CCIS has been replaced by the National Agriculture Insurance Scheme. The NAIS is considered to be an improvement over the CCIS, but it has simply replaced one flawed scheme with another slightly less flawed one. Government crop insurance has proved to be a failure worldwide, but India seems to have ignored both its own failure and the failure of other countries. [CCS WP no. 0010].
    Keywords: countries, infrastructure, financially sustainable, farmers, India, crop insurance, national agriculture, insurance,
    Date: 2009
  7. By: Antoine BOUET; Betina DIMARANAN; Hugo VALIN
    Abstract: Biofuels in the world markets: A Computable General Equilibrium assessment of environmental costs related to land use changes
    Date: 2009–11
  8. By: Corinna Manig; Alessio Moneta
    Abstract: As people become richer they get the opportunity of consuming more but also qualitatively better goods. This holds for a basic commodity like food as well. We investigate food consumption in Russia, taking into account both expenditure and nutrition value in terms of calories. We analyze how food consumption patterns change with increasing income by estimating both "quantity Engel curves" and "quality Engel curves". The former describe the functional dependence of calories consumed on total expenditure. The latter trace out the dependence of price per calorie as a proxy for quality on total expenditure. We compare income elasticities of quantity with income elasticities of quality. In these Russian data for years 2000-2002 the reaction of quality to changes in income is significantly stronger than the reaction of quantity to income changes suggesting that Russian households tend to choose higher quality food items as income rises.
    Keywords: Food consumption patterns, calorie intake, income elasticity decomposition, Engel curves, method of average derivatives
    JEL: D12
    Date: 2009–11–12
  9. By: David A. Hennessy (Center for Agricultural and Rural Development (CARD))
    Abstract: The modeling of price risk in the theory and practice of commodity risk management has been developed far beyond that of crop yield risk. This is in large part due to the use of plausible stochastic price processes. We use the Pólya urn to identify and develop a model of the crop yield expectation stochastic process over a growing season. The process allows a role for agronomic events, such as growing degree days. The model is internally consistent in adhering to the martingale property. The limiting distribution is the beta, commonly used in yield modeling. By applying binomial tree analysis, we show how to use the framework to study hedging decisions and crop valuation.
    Keywords: crop insurance, growing degree days, martingale, Pólya urn, stochastic process.
    Date: 2009–11
  10. By: Max Blouin; Stéphane Pallage
    Abstract: We examine the effects of famine relief efforts (food aid) in regions undergoing civil war. In our model, warlords seize a fraction of all aid and use it to feed soldiers. They hire their troops within a population of farmers heterogeneous in skills. We determine the equilibrium distribution of labor in this environment and study how the existence and allocation strategies of a benevolent food aid agency affect this equilibrium. Our model allows us to precisely predict who will fight and who will work in every circumstance.
    Keywords: Food aid, civil war, warlords, famine
    JEL: O10 F35 D74
    Date: 2009
  11. By: Jayashree Watal
    Abstract: This paper distinguishes the Intellectual Property Rights relevant to agriculture and explain these rights. The international intellectual property law for these rights will be described. India's international obligations vis-a-vis her own IPR laws has been explained. Analysis of the public debate in India on the controversial IPRs and the status of the legislation on these is given. This paper concludes conclude with prescriptions for public policy on IPRs and agriculture in India. [ICRIER WP no.44].
    Keywords: India, trade, paptents, countries, plants, animals, industrially, industry, technology, geographical indications, Basmati, rice, laws, industrial property, World Trade Organization (WTO), TRIPS, agriculture, IPR, intellectual property rights, legislation,
    Date: 2009
  12. By: Nordström, Jonas (Department of Economics, Lund University); Thunström, Linda (The Swedish Retail Institute)
    Abstract: This paper simulates the impact across household types of fully funded tax reforms designed to increase consumers’ fiber intake from grain consumption. Our results suggest that household types with the highest initial consumption share of fiber-rich products – i.e., households without children (seniors, couples without children, and single women without children) – experience the highest increase in fiber intake from these reforms. However, they also experience high increases in unhealthy nutrients from the reforms, making the net health effects difficult to evaluate. Seniors and couples without children also gain the most financially, paying less food taxes and facing, depending on the reform, either a lower price level than before the reform or a lower increase in the price level than the average household. These household types also face the lowest initial price level. Households with the lowest initial consumption share of fiber-rich products – families with children – appear to gain the least financially from the reforms: they pay more food taxes and face relatively high increases in price levels. Further, in general they experience an increase in fiber intake smaller than the average household. However, they do generally see reductions in the intake of added sugar, and in many cases saturated fat, which positively affects the health of families with children, who often overconsume these nutrients.
    Keywords: consumer economics; food; health; taxation
    JEL: D12 H23 I18
    Date: 2009–10–16
  13. By: Lewis, David J. (University of Wisconsin); Plantinga, Andrew J. (Oregon State University); Nelson, Erik (Natural Capital Project, Stanford University); Polasky, Stephen (University of Minnesota)
    Abstract: In this paper we analyze the efficiency of voluntary incentive-based land-use policies for biodiversity conservation. Two factors combine to make it difficult to achieve an efficient result. First, the spatial pattern of habitat across multiple landowners is important for determining biodiversity conservation results. Second, the willingness of private landowners to accept a payment in exchange for enrolling in a conservation program is private information. Therefore, a conservation agency cannot easily control the spatial pattern of voluntary enrollment in conservation programs. We begin by showing how the distribution of a landowner's willingness-to-accept a conservation payment can be derived from a parcel-scale land-use change model. Next we combine the econometric land-use model with spatial data and ecological models to simulate the effects of various conservation program designs on biodiversity conservation outcomes. We compare these results to an estimate of the efficiency frontier that maximizes biodiversity conservation at each level of cost. The frontier mimics the regulator's solution to the biodiversity conservation problem when she has perfect information on landowner willingness-to-accept. Results indicate that there are substantial differences in biodiversity conservation scores generated by the incentive-based policies and efficient solutions. The performance of incentive-based policies is particularly poor at low levels of the conservation budget where spatial fragmentation of conserved parcels is a large concern. Performance can be improved by encouraging agglomeration of conserved habitat and by incorporating basic biological information, such as that on rare habitats, into the selection criteria.
    Date: 2009–03
  14. By: Kanerva, Minna (UNU-MERIT); Arundel, Anthony (UNU-MERIT); Kemp, Rene (UNU-MERIT, and ICIS, Maastricht University)
    Abstract: Environmental innovation is an essential part of a knowledge based economy, as environmental innovation makes economies more efficient by encouraging and facilitating the use of fewer material or energy inputs per unit of output. In this respect, environmental innovation replaces material inputs with knowledge. Environmental innovation should also result in fewer externalities, or negative environmental impacts, which affect our health and well-being, also in terms of global climate change. Technology shifts caused by technological breakthroughs, rapid changes in demand for resources, or environmental imperatives could also impel societies to invest more heavily in research on how to use energy and other resources more efficiently. The main goal of this paper is to explore and identify relevant indicators for environmental innovation that could be used to develop innovation policy for all economic sectors, as well as for the field of environmental technologies. This is done firstly with the help of a qualitative model presenting the eco-innovation chain. Based on both literature and our data analysis, our chosen key indicators include measures on: environmental regulations and venture capital for the eco-industry; environmental publications, patents and business R&D; eco-industry exports and FDI; sales from environmentally beneficial innovation across sectors; and environmental impacts related to energy intensity and resource productivity of economies. Finding key eco-innovation indicators related to such factors is important for policy makers, as environmental innovation policy is required to counter the two market failures associated with environmental pollution and the innovation and diffusion of new technologies.
    Keywords: Environmental innovation, environmental goods and services, innovation indicators, CIS, environmental impacts, European Union
    JEL: O14 O30 O33 O38 Q51 Q55 Q58
    Date: 2009
  15. By: Minh Ha-Duong (CIRED - Centre international de recherche sur l'environnement et le développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Nationale des Ponts et Chaussées - Ecole Nationale du Génie Rural des Eaux et Forêts); Ana Sofia Campos (CIRED - Centre international de recherche sur l'environnement et le développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Nationale des Ponts et Chaussées - Ecole Nationale du Génie Rural des Eaux et Forêts); Alain Nadai (CIRED - Centre international de recherche sur l'environnement et le développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Nationale des Ponts et Chaussées - Ecole Nationale du Génie Rural des Eaux et Forêts)
    Abstract: An awareness and opinion survey on Carbon Capture and Storage was conducted on a representative sample of French aged 15 years and above. About 6\% of respondents were able to provide a satisfying definition of the technology. The key question about `approval of or opposition to' the use of CCS in France was asked twice, first after presenting the technology, then after exposing the potential adverse consequences. Approval rates, 59\% and 38\%, show that there is no a priori rejection of the technology. The sample was split in two to test for a semantic effect: questioning one half about `Stockage' (English: storage), the other about `Sequestration'. Manipulating the vocabulary had no statistically significant effect on approval rates. Stockage is more meaningful, but does not convey the idea of permanent monitoring.
    Keywords: Carbon capture and storage; public opinion
    Date: 2009
  16. By: Jan Robinson (Seychelles Fishing Authority - Seychelles Fishing Authority); Patrice Guillotreau (IRD - Institut de Recherche pour le Développement - Institut de Recherche pour le Développement et la société, LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Ramòn Jiménez-Toribio (MEMPES- AEA - university of Huelva - University of Huelva, Spain); Frédéric Lantz (IFP - Institut Français du Pétrole - IFP); Lesya Nadzon (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272, IFP - Institut Français du Pétrole - IFP); Juliette Dorizo (Seychelles Fishing Authority - Seychelles Fishing Authority); Calvin Gerry (Seychelles Fishing Authority - Seychelles Fishing Authority); Francis Marsac (IRD - Institut de Recherche pour le Développement - Institut de Recherche pour le Développement et la société)
    Abstract: Many small island states have developed economies that are strongly dependent on tuna fisheries. Consequently, they are vulnerable to the socio-economic effects of climate change and variability, processes that are known to impact upon tuna fisheries distribution and productivity. The aim of this study was to assess the impacts of climate oscillations on the tuna-dependent economy of Seychelles. Using a multiplier approach, the direct, indirect and induced economic effects of the tuna industry declined by 58%, 34% and 60%, respectively, in 1998, the year of a strong warming event in the western Indian Ocean. Patterns in tuna purse seine vessel expenditures in port were substantially modified by strong climate oscillations. A cointegration time-series model predicted that a 40% decline in tuna landings and transhipment in Port Victoria, a value commensurate with that observed in 1998, would result in a 34% loss for the local economy. Of several indices tested, the Indian Oscillation Index was the best at predicting the probability of entering a regime of low landings and transhipment. In 2007, a moderate climate anomaly was compounded by prior overfishing to produce a stronger that expected impact on the fishery and economy of Seychelles. The effects of fishing and climate variability on tuna stocks are complex and pose significant challenges for fisheries management and the economic development of countries in the Indian Ocean.
    Date: 2009
  17. By: Shi, Guanming (University of Wisconsin); Chavas, Jean-Paul (University of Wisconsin)
    Abstract: This paper investigates the pricing and vertical organization of differentiated products under imperfect competition. In a multiproduct context, a Cournot model is used to examine how substitution/complementarity relationships among products and vertical structures can affect the exercise of market power. This motivates a generalization of the Herfindahl-Hirschman index (termed VHHI) capturing how market concentration and vertical structures interact to influence prices of differentiated products. The analysis is applied to pricing of soybean seeds in the US over the period 2000-2007. We consider two vertical structures employed by biotech firms: vertical integration and licensing. The econometric analysis finds evidence that vertical organization has significant effects on seed prices. These effects are found to vary depending on the institutional setup and the bundling of genetic material. The empirical evidence shows that complementarity and economies of scope can reduce the effects of market concentration on prices.
    JEL: L13 L40 L65
    Date: 2009–04
  18. By: Moore, Rebecca (University of Georgia); Bishop, Richard C. (University of Wisconsin); Provencher, Bill (University of Wisconsin); Champ, Patricia (US Forest Service)
    Abstract: In this paper we develop an econometric model of willingness to pay that integrates data on respondent uncertainty regarding their own willingness to pay. The integration is utility consistent and does not involve calibrating the contingent responses to actual payment data, and so the approach can "stand alone". In an application to a valuation study related to whooping crane restoration, we find that this model generates a statistically lower expected WTP than the standard CV model. Moreover, the WTP function estimated with this model is not statistically different from that estimated using actual payment data, suggesting that when properly analyzed using data on respondent uncertainty, contingent valuation decisions can simulate actual payment decisions. This method allows for more reliable estimates of WTP that incorporates respondent uncertainty without the need for collecting comparable actual payment data.
    Date: 2009–05
  19. By: Fabio Iraldo (Sant’Anna School of Advanced Studies and IEFE – Institute for Environmental and Energy Policy and Economics, Bocconi University); Francesco Testa (IEFE – Institute for Environmental and Energy Policy and Economics, Bocconi University); Vlasis Oikonomou (Joint Implementation Network Laan Corpus den Hoorn); Michela Melis (IEFE – Institute for Environmental and Energy Policy and Economics, Bocconi University); Marco Frey (Sant’Anna School of Advanced Studies and IEFE – Institute for Environmental and Energy Policy and Economics, Bocconi University); Eise Spijker (Joint Implementation Network Laan Corpus den Hoorn)
    Abstract: The effects of environmental regulation on competitiveness is always a topic under debate for policymakers and practitioners. The article describes the different ways of defining and measuring the effects of environmental regulation on competition and market forces and synthesizes the most updated findings on the relationship between these dimensions. It also proposes an in depth analysis of the most recent empirical studies, with a particular focus on the buildings and construction (B&C) sector, which often is a substantial contributor to the most important countries’ economic indicators. We find that two variables have proved to be both (i) key in defining to what extent and under what conditions environmental regulation exerts adverse or positive effects on competitiveness and (ii) difficult to nail down: forms of regulation and responses by business.
    Date: 2009–04–01
  20. By: Ole Boysen (Department of Economics, Trinity College Dublin); Carsten Schröder (Department of Economics, University of Kiel)
    Abstract: This paper analyzes the structural change of the German dairy sector using a sector-wide optimization model. We simulate cost-optimal sectoral structures under various scenarios for different time horizons and transport cost levels. The results demonstrate that the model is able to explain the current trend towards fewer but larger dairies as currently observed in reality and also indicate, ceteris paribus, a continuation of this trend. However, this trend might level off if the importance of transport costs increases relative to other costs in dairy production.
    Keywords: Capacitated facility location problem, structural change, transportation, simulation
    JEL: C15 C61 C63 L11 L91 Q12 R39
    Date: 2009–11

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