New Economics Papers
on Agricultural Economics
Issue of 2009‒11‒27
seventeen papers chosen by

  1. Institutional change, rural services, and agricultural performance in Kyrgyzstan: By Akramov, Kamiljon T.; Omuraliev, Nurbek
  2. Nudging Farmers to Utilize Fertilizer: Theory and Experimental Evidence from Kenya By Duflo, Esther; Kremer, Michael; Robinson, Jonathan
  3. Do Food Scares Explain Supplier Concentration? An Analysis of EU Agri-food Imports By Cadot, Olivier; Jaud, Mélise; Suwa Eisenmann, Akiko
  4. Measuring Public Agricultural Research Capital and Its Contribution to State Agricultural Productivity By Huffman, Wallace
  5. Identifying the Effects of Food Stamps on Child Health Outcomes When Participation is Endogenous and Misreported By Kreider, Brent; Pepper, John V.; Gundersen, Craig; Jolliffe, Dean
  6. Conclude Doha : it matters ! By Hoekman, Bernard; Martin, Will; Mattoo, Aaditya
  7. Expanding Microenterprise Credit Access: Using Randomized Supply Decisions to Estimate the Impacts in Manila By Karlan, Dean S.; Zinman, Jonathan
  8. Nutrition and Risk Sharing within the Household By Dubois, Pierre; Ligon, Ethan
  9. Consumer preferences for country-of-origin, geographical indication, and protected designation of origin labels By Menapace, Luisa; Colson, Gregory; Grebitus, Carola; Facendola, Maria
  10. The growth-poverty convergence agenda: Optimizing social expenditures to maximize their impact on agricultural labor productivity, growth, and poverty reduction in Africa By Badiane, Ousmane; Ulimwengu, John
  11. A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade By Frank van Tongeren; John Beghin; Stéphan Marette
  12. How to Manage Food Price Instability in Developing Countries ? By Galtier, F.
  13. "Modelling Long Memory Volatility in Agricultural Commodity Futures Returns" By Roengchai Tansuchat; Chia-Lin Chang; Michael McAleer
  14. HIV and mobility in the Lake Victoria Basin agricultural sector: A literature review By Drimie, Scott; Weinand, Julia; Gillespie, Stuart; Wagah, Margaret
  15. Does Information Change Behavior? By Huffman, Wallace
  16. Consumer Perceptions and Coping Strategies of Consumers Committed to Eating Local in Michigan (USA) By Bingen, J.; Sage, J.; Sirieix, L.
  17. Quality Certification with Geographical Indications, Trademarks and Firm Reputation By Menapace, Luisa; Moschini, GianCarlo

  1. By: Akramov, Kamiljon T.; Omuraliev, Nurbek
    Abstract: The institutional change in rural Kyrgyzstan during the transition period included farm reorganization, land reform, building markets, and community institutions. The land reform established private property rights to land, including the rights to transfer, exchange, sell, lease, and use the land as collateral for credit. These key features of Kyrgyzstan's agrarian transition are in sharp contrast with those of other transition countries in Central Asia. This paper reviews the process of institutional change in rural Kyrgyzstan, examines its impact on agricultural performance and discusses some remaining major institutional and policy constraints on agricultural growth in this country.
    Keywords: Institutional change, Land reform, Agricultural growth, Rural services, Development strategies, Kyrgyzstan,
    Date: 2009
  2. By: Duflo, Esther; Kremer, Michael; Robinson, Jonathan
    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.
    Keywords: hyperbolic discounting; technology adoption
    JEL: O12 O38
    Date: 2009–08
  3. By: Cadot, Olivier; Jaud, Mélise; Suwa Eisenmann, Akiko
    Abstract: This paper documents a decreasing trend in the geographical concentration of EU agro-food imports. Decomposing the concentration indices into intensive and extensive margins components, we find that the decrease in overall concentration indices results from two diverging trends: the pattern of trade diversifies at the extensive margin (EU countries have been sourcing their agri-food products from a wider range of suppliers), while geographical concentration increases at the intensive-margin (EU countries have concentrated their imports on a few major suppliers). This leads to an increasing inequality in market shares between a small group of large suppliers and a majority of small suppliers. We then move on to exploit a database of food alerts at the EU border that had never been exploited before. After coding it into HS8 categories, we regress the incidence of food alerts by product on determinants including exporter dummies as well as HS8 product dummies. Coefficients on product dummies provide unbiased estimates of the intrinsic vulnerability of exported products to food alerts, as measured at the EU border. We incorporate the product risk coefficient as an explanatory variable in a regression of geographical concentration and show that concentration is higher for risky products.
    Keywords: agricultural trade; European Union; food; import concentration; sanitary risk
    JEL: F1 O3
    Date: 2009–09
  4. By: Huffman, Wallace
    Abstract: A methodology for measuring public agricultural research capital is developed and described for the first time, new public agricultural research capital measures for each of the 48 contiguous US states, 1970-1999, are presented, and a new econometric analysis of the contribution of public agricultural research capital to state agricultural productivity is reported. Public agricultural research capital across the states is shown to have five different growth patterns, only one of which is at a constant rate. New TFP results show that public agricultural research capital contributes significantly to agricultural productivity and is larger than previous estimates. Intrastate and spillin public agricultural research capital are shown to be complementary, but private agricultural research capital and public extension are substitutes. The marginal social rate of return to public agricultural, including significant interstate spillovers, is large which has science policy implications.
    Keywords: Research capital, agriculutre, states, measurement, produtivity decomposition, TFP
    JEL: O3 O4
    Date: 2009–11–12
  5. By: Kreider, Brent; Pepper, John V.; Gundersen, Craig; Jolliffe, Dean
    Abstract: The literature assessing the efficacy of the Food Stamp Program, now called the Supplemental Nutrition Assistance Program (SNAP), has long puzzled over positive associations between food stamp receipt and various undesirable health outcomes such as food insecurity. Assessing the impact of food stamps on outcomes is made difficult by endogenous selection into food stamp recipiency and extensive systematic misreporting of participation status. Using data from the National Health and Nutrition Examination Survey (NHANES), we apply and extend partial identification bounding methods to account for these two identification problems in a single unifying framework. Imposing relatively weak nonparametric assumptions on the selection and reporting error processes, we provide informative bounds on the impact of food stamps on child food insecurity, obesity, general health, and anemia. We find that commonly cited negative relationships between food stamps and health outcomes provide a misleading picture about the impact of the program. Without imposing any parametric assumptions, our tightest bounds identify modest favorable impacts of food stamps on child health.
    Keywords: Food Stamp Program, Supplemental Nutrition Assistance Program, food insecurity, health outcomes, partial identification, treatment effect, nonparametric bounds, classification error
    JEL: C1 C2 I3
    Date: 2009–11–13
  6. By: Hoekman, Bernard; Martin, Will; Mattoo, Aaditya
    Abstract: The Doha Round must be concluded not because it will produce dramatic liberalization but because it will create greater security of market access. Its conclusion would strengthen, symbolically and substantively, the WTO’s valuable role in restraining protectionism in the current downturn. What is on the table would constrain the scope for tariff protection in all goods, ban agricultural export subsidies in the industrial countries and sharply reduce the scope for distorting domestic support - by 70 per cent in the EU and 60 per cent in the US. Average farm tariffs that exporters face would fall to 12 per cent (from 14.5 per cent) and the tariffs on exports of manufactures to less than 2.5 per cent (from about 3 per cent). There are also environmental benefits to be captured, in particular disciplining the use of subsidies that encourage over-fishing and lowering tariffs on technologies that can help mitigate global warming. An agreement to facilitate trade by cutting red tape will further expand trade opportunities. Greater market access for the least-developed countries will result from the"duty free and quota free"proposal and their ability to take advantage of new opportunities will be enhanced by the Doha-related"aid for trade"initiative. Finally, concluding Doha would create space for multilateral cooperation on critical policy matters that lie outside the Doha Agenda, most urgently the trade policy implications of climate change mitigation.
    Keywords: Economic Theory&Research,Free Trade,Emerging Markets,Trade Policy,Trade Law
    Date: 2009–11–01
  7. By: Karlan, Dean S.; Zinman, Jonathan
    Abstract: Microcredit seeks to promote business growth and improve well-being by expanding access to credit. We use a field experiment and follow-up survey to measure impacts of a credit expansion for microentrepreneurs in Manila. The effects are diffuse, heterogeneous, and surprising. Although there is some evidence that profits increase, the mechanism seems to be that businesses shrink by shedding unproductive workers. Overall, borrowing households substitute away from labor (in both family and outside businesses), and into education. We also find substitution away from formal insurance, along with increases in access to informal risk-sharing mechanisms. Our treatment effects are stronger for groups that are not typically targeted by microlenders: male and higher-income entrepreneurs. In all, our results suggest that microcredit works broadly through risk management and investment at the household level, rather than directly through the targeted businesses.
    Keywords: formal finance; informal finance; microcredit; microentreprenuership; microfinance; risk sharing
    JEL: D1 D2 G2 O2
    Date: 2009–08
  8. By: Dubois, Pierre; Ligon, Ethan
    Abstract: Using data on individual consumption from farm households in the Philippines, we construct a direct test of risk-sharing within the household. We contrast the efficient outcomes predicted by the unitary household model with the outcomes we might expect if food consumption delivers not only utils, but also nutrients affecting future productivity. The efficiency conditions which characterize the within household allocation of food under the unitary model are violated, as consumption responds to earnings shocks. If productivity depends on nutrition, this explains some but not all of the response, as earnings “surprises” have some effect on the cost and composition of diet.
    Date: 2009–11
  9. By: Menapace, Luisa; Colson, Gregory; Grebitus, Carola; Facendola, Maria
    Abstract: Motivated by the recognition that geography is often correlated with and/or an important determinant of the overall quality of agricultural products, consumer groups, industry representatives, and domestic and trade representatives have increasingly considered the potential role of geographical origin labels as consumer information and marketing tools. We investigate whether consumers recognize and value the informational content of a variety of nested geographical origin labels. In particular, this study disentangles and assesses three nested types of origin labels: country of origin (COOL), geographical indications (GI), and PDO/PGI. We find that, within the context of a high quality valueadded commodity such as extra virgin olive oil, consumers' willingness to pay varies across different countries of origin, and that within a country consumers have a greater willingness to pay for GI-labeled than non-GI labeled products. We also find evidence that consumers value PDOs more than PGIs, but the result is not as strong as that found for GI versus non-GI. Overall, our findings support the recent surge in interest by both developed and developing nations in reaching an agreement for stricter and more widespread protection of GIs within ongoing WTO discussions and harnessing them as marketing tools for expanding shares in export markets.
    Keywords: Consumer preferences, geographical indications, country of origin labels, PDO, PGI, olive oil
    Date: 2009–11–10
  10. By: Badiane, Ousmane; Ulimwengu, John
    Abstract: The need to achieve the Millennium Development Goals (MDGs) has raised the profile of social sector investments in Africa and other developing countries. As a result, many African countries are pressured to emphasize short-term concerns related to the symptoms of poverty at the expense of the longer-term needs to raise productivity and incomes, and thereby tackle the real roots of poverty. Because of scarce budget resources, there is a major challenge for African governments in terms of ensuring the necessary consistency of policies and strategies to promote long-term economic growth, raise smallholder productivity, achieve food security, and reduce poverty, while providing the social services that respond to immediate welfare requirements. The main objective of the convergence agenda exposed in this paper is to identify strategies that would allow developing countries to improve the management of public expenditures so as to raise the chances of meeting the income growth and social needs of their populations under tight budget constraints. In this paper we have (1) discussed the terminology used in describing the problem being studied and formulated the assumptions and hypotheses underlying the research; (2) defined a typology of growth–poverty pathways; (3) developed metrics to measure the strength of the relationship between growth and poverty reduction; (4) laid out the theory for the measurement of the degree of convergence of public expenditures on social services, that is, the extent to which they are optimized with respect to their impact on labor productivity and growth; and (5) outlined models for (a) the quantification of social services availability at the local level using a single-score concept, (b) the evaluation of the quality and efficiency of public expenditures in social services sectors in rural areas, and (c) the optimization of public expenditures allocation to maximize the impact on growth and poverty reduction; as well as (6) provided initial evidence proving the validity of the theory of convergence.
    Keywords: Poverty, Expenditure, Social services, Convergence, Agriculture, Poverty overhang, Growth deficit, Public investment,
    Date: 2009
  11. By: Frank van Tongeren; John Beghin; Stéphan Marette
    Abstract: This report develops a conceptual framework for the assessment of costs and benefits associated with non-tariff measures that allows an evidence-based comparative assessment of alternative regulatory approaches.
    Keywords: agriculture in international trade, economics of regulation, information and product quality, international trade organisations, standardization and compatibility, trade policy
    JEL: F13 L15 L51 Q17
    Date: 2009–11
  12. By: Galtier, F.
    Abstract: The food crisis of 2007-2008 and the resulting urban riots observed in about forty developing countries placed the question of price instability at the very heart of the debate. The paper states that, since the 80s, the prevailing idea is that the best option is to manage risks without "affecting prices" by means of private risk management instruments (crop insurance, future markets...) in conjunction with the provision of safety nets for vulnerable populations. Indeed, the stabilisation of agricultural prices is thought to be not desirable because i) it prevents prices from playing their role of a signal guiding production and trade behaviour and ii) by dissociating price movements from production variation, it prevents producers from taking advantage of the "natural insurance" resulting from the negative correlation between prices and harvest volumes. Nevertheless, this strategy had difficulty in standing up to the facts: the development of private risk-management instruments did not come to fruition and the safety nets did not succeed in preventing the deterioration of the nutritional situation of vulnerable households. The paper shows that the arguments against price stabilisation (the informational role of prices and the "natural insurance" of producers) do not hold when the different causes of price instability are taken into account. It also proposes a typology of the causes of instability. Instability may be "natural", as a result of natural hazards affecting production (rain, locusts...). However, it may also be "imported from international markets or "endogenous", in other words generated by the markets themselves (speculative bubbles, cobweb phenomena, etc). Lastly, the paper shows that the causes of instability are a crucial factor in the performance of price stabilisation strategies and instruments. It therefore presents the relevant stabilisation policies for each cause of instability. ...French Abstract : La crise alimentaire de 2007-2008 et les émeutes urbaines qu'elle a engendrées dans une quarantaine de PED ont conduit à mettre la question de l'instabilité des prix alimentaires au coeur des débats. L'article rappelle que, depuis les années 80, l'idée domine que la meilleure option consiste à gérer les risques sans " toucher aux prix " grâce à des instruments privés (assurance récolte, marchés à terme...) complétés par des filets de sécurité pour les populations vulnérables. En effet, la stabilisation des prix agricoles est considérée comme non souhaitable car d'une part elle empêche les prix de jouer leur rôle de signal guidant les comportements de production et d'échange et d'autre part, en déconnectant l'évolution des prix de celle de la production, elle empêche les producteurs de bénéficier de " l'assurance naturelle " procurée par la corrélation négative entre prix et niveau des récoltes. Cependant, cette stratégie a mal supporté l'épreuve des faits : le développement des instruments privés de gestion des risques ne s'est pas produit et les filets de sécurité ne sont pas parvenus à enrayer la dégradation de la situation nutritionnelle des ménages vulnérables. L'article montre que les arguments à l'encontre de la stabilisation des prix (le rôle informationnel des prix et " l'assurance naturelle " des producteurs) ne tiennent pas si on prend en compte la diversité des causes de l'instabilité des prix. Il propose en outre une typologie des causes de l'instabilité. Outre l'instabilité d'origine "naturelle" (due aux aléas naturels affectant la production comme la pluie ou les attaques de criquets), l'instabilité des prix peut en effet être "importée" des marchés internationaux ou être " endogène ", c'est-à-dire être générée par le fonctionnement des marchés eux mêmes (bulles spéculatives, phénomènes de cobweb...). Enfin, l'article montre que la performance des stratégies et instruments de stabilisation des prix dépend de manière cruciale des causes de l'instabilité. Il présente les politiques de stabilisation adaptée à chacune des causes d'instabilité.
    JEL: D84 G13 L11 O24 O33 Q11 Q18
    Date: 2009
  13. By: Roengchai Tansuchat (Faculty of Economics, Maejo University); Chia-Lin Chang (Department of Applied Economics, National Chung Hsing University); Michael McAleer (Econometric Institute, Erasmus School of Economics, Erasmus University Rotterdam and Tinbergen Institute and Center for International Research on the Japanese Economy (CIRJE), Faculty of Economics, University of Tokyo)
    Abstract: This paper estimates the long memory volatility model for 16 agricultural commodity futures returns from different futures markets, namely corn, oats, soybeans, soybean meal, soybean oil, wheat, live cattle, cattle feeder, pork, cocoa, coffee, cotton, orange juice, Kansas City wheat, rubber, and palm oil. The class of fractional GARCH models, namely the FIGARCH model of Baillie et al. (1996), FIEGACH model of Bollerslev and Mikkelsen (1996), and FIAPARCH model of Tse (1998), are modelled and compared with the GARCH model of Bollerslev (1986), EGARCH model of Nelson (1991), and APARCH model of Ding et al. (1993). The estimated d parameters, indicating long-term dependence, suggest that fractional integration is found in most of agricultural commodity futures returns series. In addition, the FIGARCH (1,d,1) and FIEGARCH(1,d,1) models are found to outperform their GARCH(1,1) and EGARCH(1,1) counterparts.
    Date: 2009–10
  14. By: Drimie, Scott; Weinand, Julia; Gillespie, Stuart; Wagah, Margaret
    Abstract: The Lake Victoria region has the highest HIV prevalence in the East African Community, which comprises Kenya, Uganda, Tanzania, Rwanda, and Burundi. This region also has a significant concentration of commercial agricultural plantations, which rely on mobile workers, an extensive system of out-grower schemes, and linkages with neighboring communities and transportation routes. This paper reviews the relationships between the various components of the plantation system and the spread of HIV, which is a complex and dynamic process. There has been relatively little research on these dynamic interactions, and the relevant policies and programs are generally silent on mobility-induced vulnerability to HIV. As such, this review first examines how the conditions and structure of the migration process may increase HIV vulnerability for migrants, thereby illuminating key challenges. Second, the review considers what may be done to address these issues, particularly within the plantation system. A comprehensive response to HIV would require that the plantation companies engage in efforts against HIV/AIDS across its entire time line (that is, ranging from efforts to prevent infection to attempts to mitigate its full impact on both agricultural workers and the business as a whole). Despite the logic of this argument, we do not yet have strong financial evidence proving that companies should invest in a comprehensive strategy. This critical gap should be addressed. For example, pilot programs on select plantations could be used to show the cost-benefits of addressing HIV/AIDS through a well-designed set of interventions aimed at the different target groups.
    Keywords: HIV/AIDS, Mobility, Migrant workers, Agricultural plantations,
    Date: 2009
  15. By: Huffman, Wallace
    Abstract: This paper reviews and synthesizes the theory of information economics and empirical evidence on how information changes the behavior of consumers, households and firms. I show that consumers respond to new information in food experiments but perhaps not in retirement account management. Some seeming perverse consumer/investor decision making may be a result of a complex decision with a low expected payoff.
    Keywords: information economics, consumer behavior, behavioral economics, moral hazard, adverse selection.
    JEL: A0
    Date: 2009–11–19
  16. By: Bingen, J.; Sage, J.; Sirieix, L.
    Abstract: American consumers are presented with an increasing number of reasons to buy and eat local food products. One refers to the importance of the origin of the products they purchase. A second, and closely related reason, refers to being concerned about the food miles, or the distance foods have traveled from where they are grown or raised, to where they are purchased or consumed. If the act of "eating local" is often presented as beneficial and virtuous (for example, health, environment, community development and civic responsibility), it also embodies obstacles such as the time and sometimes skills required for both shopping and preparation. Such obstacles often discourage many from buying local fresh produce. This paper draws on the results of several focus groups with consumers in Michigan who are committed to eating local. The paper offers insights into how these consumers cope or balance their commitment to eating local with the constraints they face on buying and preparing local food. ...French Abstract : Les consommateurs des Etats-Unis sont de plus en plus incités à acheter et consommer des produits locaux. L'une des raisons est l'importance de l'origine des produits que l'on achète. Une autre raison est celle de la préoccupation par rapport aux " food miles " c'est à dire la distance parcourue par les produits entre la production et l'achat. Si le fait de consommer local est souvent présenté comme vertueux (pour la santé, l'environnement, le développement local ou la responsabilité sociale), il présente des obstacles tels que le temps passé et les compétences nécessaires pour les achats et la préparation. De tels obstacles peuvent décourager l'achat des produits locaux. Cet article présente les résultats de plusieurs focus groups avec des consommateurs du Michigan impliqués dans l'achat de produits locaux. Il permet de comprendre quelles sont les stratégies de coping utilisées par les consommateurs pour concilier leur engagement et les contraintes auxquelles ils doivent faire face lors de l'achat ou de la préparation des produits.
    JEL: D10 Q01
    Date: 2009
  17. By: Menapace, Luisa; Moschini, GianCarlo
    Abstract: This paper studies firm reputation as a mechanism to assure product quality in perfectly competitive markets in a context in which both certification and trademarks are available. Shapiro’s (1983) model of reputation is extended to reflect both collective and firm-specific reputations, and this framework is used to study certification and trademarks for food products with a regional identity, known as Geographical Indications (GIs). Our model yields two primary results. First, in markets with asymmetric information and moral hazard problems, credible certification schemes reduce the cost of establishing reputation and lead to welfare gains compared to a situation in which only private trademarks are available. Hence, certification improves the ability of reputation to operate as a mechanism for assuring quality. Second, the actual design of the certification scheme plays an important role in mitigating informational problems. From a policy perspective, our results have implications for the current debate and negotiations on GIs at the World Trade Organization and the ongoing product quality policy reform within the European Union. With regard to the instrument of choice to provide intellectual property protection for GIs, our model favors a sui generis scheme based on appellations over certification marks. Finally, our model supports the introduction of a scheme for “traditional products,” based exclusively on quality (rather than on geographical) requirements, the feasibility of which is currently being investigated by the European Union.
    Keywords: Asymmetric Information, Certification, Geographical Indications, Quality, Reputation
    Date: 2009–11–19

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