nep-agr New Economics Papers
on Agricultural Economics
Issue of 2010‒02‒27
fourteen papers chosen by
Angelo Zago
University of Verona

  1. Toward a typology of food security in developing countries: By Yu, Bingxin; You, Liangzhi; Fan, Shenggen
  2. Bio-economics of Conservation Agriculture and Soil Carbon Sequestration in Developing Countries By Akpalu, Wisdom; Anders, Ekbom
  3. Agricultural growth, poverty, and nutrition in Tanzania: By Pauw, Karl; Thurlow, James
  4. Labeling genetically modified food in India: Economic consequences in four marketing channels By Bansal, Sangeeta; Gruère, Guillaume
  5. Micro-level practices to adapt to climate change for African small-scale farmers: By Below, Till; Artner, Astrid; Siebert, Rosemarie; Sieber, Stefan
  6. Modelling the Effects of the EU Common Agricultural Policy By Catherine Costa; Michelle Osborne; Xiao-guang Zhang; Pierre Boulanger; Patrick Jomini
  7. Implications of avian flu for economic development in Kenya: By Thurlow, James
  8. Prospects of Non-Farm Employment and Welfare in Rural Areas By Simrit Kaur; Vani S. Kulkarni; Raghav Gaiha; Manoj K. Pandey
  9. Rural credit cooperatives in spain (1890‐1935): a good start was not enough By Angel Pascual Martínez Soto; Susana Martínez Rodríguez
  10. Private Regulation, Supply Chain and Contractual Networks: The Case of Food Safety By Fabrizio Cafaggi
  11. Herding in a Shifting Mediterranean Changing agro-pastoral livelihoods in the Mashreq & Maghreb region By Michele Nori; Mohamed El Mourid; Ali Nefzaoui; Pamela Giorgi
  12. Internal migration and rural service provision in northern Ghana: By Wouterse, Fleur
  13. Incidence of Climate on Emerging Economies: Lessons from English's Past By Stéphane Auray; Aurélien Eyquem; Frédéric Jouneau-Sion
  14. Cap-and-Trade Properties under Different Scheme Designs By Georg Grüll; Luca Taschini

  1. By: Yu, Bingxin; You, Liangzhi; Fan, Shenggen
    Abstract: The recent global food and financial crises have reversed the last decade's progress in reducing hunger and poverty. This paper conducts a factor and sequential typology analysis to identify groups of countries categorized according to five measures of food security—consumption, production, imports, distribution, and agricultural potential—by using indicators from 175 countries. The analysis first identifies five distinct food security groups, characterized by food intake, and then further splits these groups based on the various measures of food production, trade security, and agricultural potential. The results suggest that the general category of “developing countries” is extremely heterogeneous and is not particularly useful if the focus is on issues of food security. The results also indicate that different responses are needed by different types of food-insecure countries to address the food and financial crises.
    Keywords: food security, Typology, agricultural potential, factor analysis, Poverty, Hunger, financial crisis, Developing countries, Development strategies,
    Date: 2010
  2. By: Akpalu, Wisdom (Department of History, Economics and Politics (HEP), State University of New York-Farmingdale); Anders, Ekbom (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Improvement in soil carbon through conservation agriculture in developing countries may generate some private benefits to farmers as well as sequester carbon emissions, which is a positive externality to society. Leaving crop residue on the farm has become an important option in conservation agriculture practice. However, in developing countries, using crop residue for conservation agriculture has the opportunity cost of say feed for livestock. In this paper, we model and develop an expression for an optimum economic incentive that is necessary to internalize the positive externality. A crude value of the tax is calculated using data from Kenya. We also empirically investigated the determinants of the crop residue left on the farm and found that it depends on cation exchange capacity (CEC) of the soil, the prices of maize, whether extension officers visit the plot or not, household size, the level of education of the household head and alternative cost of soil conservation.<p>
    Keywords: conservation agriculture; soil carbon; climate change; bioeconomics; Kenya
    JEL: C61 Q18 Q24 Q54 Q56
    Date: 2010–02–15
  3. By: Pauw, Karl; Thurlow, James
    Abstract: Rapid economic growth has failed to significantly improve poverty and nutrition outcomes in Tanzania. This raises concerns over a decoupling of growth, poverty, and nutrition. We link recent production trends to household incomes using a regionalized, dynamic computable general equilibrium and microsimulation model. Results indicate that the structure of economic growth—not the level—is currently constraining the rate of poverty reduction in Tanzania. Most importantly, agricultural growth trends have been driven by larger-scale farmers and by crops grown in only a few regions of the country. The slow expansion of food crops and livestock also explains the weak relationship between agricultural growth and nutrition outcomes. Additional model simulations find that accelerating agricultural growth, particularly in maize, greatly strengthens the growth–poverty relationship and enhances households' caloric availability. We conclude that low productivity, market constraints (including downstream agroprocessing), and barriers to import substitution for major food crops are among the more binding constraints to reducing poverty and improving nutrition in Tanzania.
    Keywords: economic growth, Poverty, Nutrition, household incomes, Computable general equilibrium (CGE) modeling, Agricultural growth, Microsimulation model, livestock, Food crops, low productivity, market constraints, Development strategies,
    Date: 2010
  4. By: Bansal, Sangeeta; Gruère, Guillaume
    Abstract: In 2006, India proposed a draft rule requiring the labeling of all genetically modified (GM) foods and products derived thereof. In this paper, we use primary and secondary market data to assess the economic implications of introducing such a mandatory labeling policy for GM food. We focus on four products that would likely be the first affected by such a regulation in India: cottonseed oil, soybean oil, brinjal (eggplant), and rice. We find that GM food labeling would generate a specific market outcome for each of these products. With GM labeling, virtually all cottonseed oil would be labeled as GM, with limited costs for all actors involved, but also limited benefit for consumers. Labeling soybean oil derived from GM crops could affect market shares for edible oils at the benefit of domestic oils, and non-GM soybean oil could appear on the market at a very limited scale. Labeling GM brinjal would be extremely challenging. Assuming it was implemented, some non-GM brinjal would be sold at a premium in high-income retail outlets, while virtually all others would be labeled GM. A similar outcome would occur for rice, with high-quality rice used for both domestic consumption and exports markets certified non-GM and most of the remaining rice labeled as GM. In each of the cases, labeling would generate significant adjustment costs for the industry and large enforcement costs, and consumer benefit would not always be visible and would highly depend on the degree of enforcement. In fact, voluntary labeling could achieve less-distorted results with lower costs and therefore appears to be a superior regulatory solution. Still, provided enforcement is ensured, a well-designed mandatory labeling regulation with limited product coverage, a non-zero labeling threshold, and an informative labeling content would lead to a much better outcome and lower costs in India than the current draft rule, especially if it is accompanied by a large awareness campaign regarding GM food and consumer safety in India.
    Keywords: Genetically modified food, Labeling, market shares, domestic consumption, soybean oil, export markets, rice, cottonseed oil, enforcement costs, consumer safety, Food marketing, Genetic resources,
    Date: 2010
  5. By: Below, Till; Artner, Astrid; Siebert, Rosemarie; Sieber, Stefan
    Abstract: This paper discusses micro-level practices for adapting to climate change that are available to small-scale farmers in Africa. The analysis is based on a review of 17 studies about practices that boost small-scale farmers' resilience or reduce their vulnerability to observed or expected changes in climate; it includes data from more than 16 countries in Africa, the Americas, Europe, and Asia. The review shows that African smallholders are already using a wide variety of creative practices to deal with climate risks; these can be further adjusted to the challenge of climate change by planned adaptation programs. We found 104 different practices relevant to climate change adaptation and organized them in five categories: farm management and technology; farm financial management; diversification on and beyond the farm; government interventions in infrastructure, health, and risk reduction; and knowledge management, networks, and governance. We conclude that adaptation policies should complement farmers' autonomous response to climate change through the development of new drought-resistant varieties and improved weather forecasts, the provision of financial services, improvement of rural transportation infrastructure, investments in public healthcare and public welfare programs, and policies that improve local governance and coordinate donor activities.
    Keywords: Climate change, adaptation practices, content analysis, Small-scale farmers, climate risks, Farm management, diversification, risk reduction, government interventions, public welfare programs
    Date: 2010
  6. By: Catherine Costa; Michelle Osborne; Xiao-guang Zhang; Pierre Boulanger; Patrick Jomini (Productivity Commission)
    Abstract: The Common Agricultural Policy (CAP) of the European Union has undergone significant reform since the early 1990s, with the aim of improving its market orientation. There is an increasing focus on breaking the link between direct income payments and production decisions — so called 'decoupling'. Expenditure on the CAP accounts for about 46 per cent of total EU budgetary expenditure, or over 50 billion Euros. The majority of expenditure is in the form of direct income payments to farmers. Expenditure also includes market price support and rural development programs. The European Union also assists its agricultural sector with various border protection measures including import duties and other non-tariff barriers. In this study, economic impacts of the CAP are evaluated using the GTAP model. According to the modelling results, the effects of the CAP include - higher output of the farm and food processing sectors in the European Union, of about 8 and 6 per cent respectively; lower output of the EU manufacturing and services sectors; lower GDP in the European Union of about 0.3 per cent, or $US 52 billion. The additional farm and food output in the European Union is estimated to depress world prices for these goods by between 1 and 4 per cent. World prices for manufactured goods and services increase. These price movements induce a contraction in agriculture and food processing in non-EU regions, and an expansion in the manufacturing and services sectors. The estimated net effect of the CAP is to reduce global welfare by about $US 45 billion, with a cost to the European Union of $US 30 billion. The largest contributor to this welfare loss is the border protection component of the CAP. Important caveats to these modelling results apply. The estimates are sensitive to parameter choices, specific model features, and the structure of the database. In addition, the modelling does not capture some aspects of the CAP including the effects of cross-compliance measures, any impacts on productivity in the agricultural sector, and positive and negative externalities associated with the policy. Therefore, these results should be interpreted as only indicative of the magnitude of the economic impacts of the CAP. The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.
    Keywords: Common Agricultural Policy (CAP), food security, rural development, Global Trade Analysis Project, direct income payments, export subsidies, border protection, general equilibrium
    Date: 2009–12
  7. By: Thurlow, James
    Abstract: Kenya is vulnerable to avian flu given its position along migratory bird routes and proximity to other high-risk countries. This raises concerns about the effect an outbreak could have on economic development. We use a dynamic computable general equilibrium model of Kenya to simulate potential outbreaks of different severities, durations, and geographic spreads. Results indicate that even a severe outbreak does not greatly reduce economic growth. It does, however, significantly worsen poverty, because poultry is an important income source for poor farmers and a major food item in consumers' baskets. Avian flu therefore does pose a threat to future development in Kenya. Reducing the duration and geographic spread of an outbreak is found to substantially lower economic losses. However, losses are still incurred when poultry demand falls, even without a confirmed outbreak but only the threat of an outbreak. Our findings support monitoring poultry production and trade, responding rapidly to possible infections, and improving both farmers' and consumers' awareness of avian flu.
    Keywords: Avian influenza Developing countries, avian flu, economic growth, Poverty, Computable General Equilibrium (CGE) model, Development strategies,
    Date: 2010
  8. By: Simrit Kaur; Vani S. Kulkarni; Raghav Gaiha; Manoj K. Pandey
    Abstract: Employment elasticity with respect to agriculture value added in South Asia has weakened in recent years. While crop diversification has grown and value added per hectare also grew, employment growth was sluggish. However, the linkages between farm and non-farm employment remain strong. Drawing upon the 50th and 61st rounds of the National Sample Surveys (NSS) for India in 1993 and 2004, we first review the changes in participation rates in farm and non-farm activities by gender, age, education and caste affiliations. This is followed by an econometric analysis of contribution of farm and non-farm employment towards welfare in terms of per capita expenditure. The focus is on household characteristics (size, composition, education, land holding), and community characteristics (access to roads, power and financial services). Using a measure of normalised rainfall, we assess how rainfall shocks influence welfare in farm and non-farm activities. The fact that welfare of selfemployed in non-farm activities became more sensitive to rainfall shocks in 2004, relative to 1993, suggests stronger linkages between farm and non-farm activities. Also, the welfare of self-employed in agriculture became more sensitive to rainfall shocks in 2004, presumably due to expansion of agriculture into arid and semi-arid areas. Finally, and not so surprising is the greater sensitiveness of welfare of agricultural labour households to rainfall shocks. So while education and better infrastructure will help enhance welfare in farm and non-farm activities, the policy concern for resilience against rainfall shocks is reinforced.
    Keywords: Rainfall Shocks, Agriculture, Non-Agriculture, Employment, Income, Consumption, Infrastructure, Education, South Asia, India
    JEL: H53 I32 Q15 R23
    Date: 2010
  9. By: Angel Pascual Martínez Soto (University of Murcia); Susana Martínez Rodríguez (Department of Economics and Related Studies, University of York)
    Abstract: The spread of agrarian credit cooperativism in Spain (1890‐1934) was done under a variety of ideological and economic orientations. This article focuses on the construction of a few tools and indicators to explain the characteristics of agricultural credit cooperatives. An analysis of financial operations of rural savings banks is related with socio‐political aspects that influenced their development; this analysis helps us to explain the relative success of German credit cooperative models adopted in the context of Spanish agriculture, as happened on European periphery.
    Keywords: Agrarian credit cooperativism, rural savings banks, denominational movement.
    JEL: G29 N53 Q13
    Date: 2010–01
  10. By: Fabrizio Cafaggi
    Abstract: Within agriculture industry chains, important changes have taken place. Both vertical integration and vertical disintegration are occurring. These transformations may have effects on the adoption of private standards, but more importantly, may also effect the functions that private standards may play within the chain. I develop a coordinated approach that integrates the value supply chain perspective with regulatory theory to show that co-evolutionary patterns explain the changes in the supply chain and the increasing use of transnational private regulation. I then focus on different coordination mechanisms that are, or can be, used in food chains, and propose a wider deployment of contractual networks to improve effectiveness of food safety regulation. I distinguish between contractual networks directed at information production and transfer and contractual networks concerning risk assessment and risk management. I conclude with some policy recommendations.
    Date: 2010–02–15
  11. By: Michele Nori; Mohamed El Mourid; Ali Nefzaoui; Pamela Giorgi
    Abstract: Pastoralism is a characteristic livelihood system for the whole Mediterranean basin. From Morocco to Turkey, from Sardinia to Libya, herding societies are a common feature of all countries and civilisations that have inhabited the region. Though the material and symbolic wealth of pastoral groups is an integral part to the Mediterranean livelihood as well as cultural systems (i.e. milk, lambs, transhumance, etc…), these societies have long suffered various forms of socio-political and economic marginalisation. While the lands and environments herders insisted upon have become a main target for modernization policies, from natural reserve to farming expansion, from mining exploitation to livestock market off-takes, their rights have been seldom acknowledged and their technical skills and institutional capacities hardly recognized. Recently, low population density, remoteness and political marginality have made pastoral areas the prime targets for state retrenchment under Structural Adjustment Programs and cuts to public budgets. On the other side important potentials exist for a fairer development of these communities, such as the increasing consumption demand for animal proteins, together with the recognition of pastoralism as an environmental-friendly natural resource management, and processes of enhanced autonomy and local participation in political decision-making offered by recent reforms implying decentralisation and devolution. During the last decades, access to and control of resources in pastoral areas have gone through specific transformation processes, which have reshaped to a large extent pastoralists dependence on their natural resource base and enhanced integration into state and market dynamics. Yet the outcomes of these processes are yet to prove beneficial to pastoral communities, whose sense of marginalisation, disillusionment and resentment towards state or regional institutions is an important element that helps explaining to an extent processes of political radicalisation in many pastoral regions. As a result, pastoral groups seem increasingly exposed to climatic vagaries, increasingly trapped in the vicious circle characterised by high levels of food insecurity, conflict and environmental degradation. Within the climate change framework the vulnerability of these communities to extremes climatic events, i.e. drought, is being increasingly acknowledged (WISP, 2007). This paper addresses the dynamics perceived, the problems faced and the applied coping strategies by some pastoral communities inhabiting the Middle East North Africa (MENA) region. With case studies from Morocco and Tunisia and a wider regional analysis which also include cases from Jordan, Syria and Palestine, this paper addresses the shifting vulnerability of pastoral communities under changing environmental and socio-political domains. An innovative participatory tool, the historical livelihood matrix is presented and brought into discussion as an appropriate tool which enables discussing livelihood dynamics in an historical perspective, taking into account the gender as well as generational perspectives. The research work has been undertaken within the ICARDA Maghreb and Mashreq program, complemented with some other development works undertaken by the author in the region with the NGO Ucodep.
    Keywords: participation; risk-sharing mechanisms; institutionalisation; gender policy; Mediterranean
    Date: 2009–10–15
  12. By: Wouterse, Fleur
    Abstract: This paper uses a two-stage conditional maximum likelihood procedure and new data from Ghana to identify the determinants of rural-urban migration at the individual, household and community levels, with a particular focus on rural services. The econometric evidence supports the theoretical expectation that human-capital and network variables as well as assets are important determinants of migration. Taking the possible endogeneity of rural services into account, the evidence suggests that rural service improvements aimed at reducing economic isolation can enhance labor mobility and free up on-farm labor for migration by lowering transaction costs.
    Keywords: Rural-urban migration, rural services, Development strategies,
    Date: 2010
  13. By: Stéphane Auray (Université Lille 3 (GREMARS), Université de Sherbrooke (GREDI) and CIRPÉE); Aurélien Eyquem (GATE, UMR 5824, Université de Lyon and Ecole Normale Supérieure Lettres et Sciences Humaines, France); Frédéric Jouneau-Sion (Universites Lille Nord de France)
    Abstract: Evidence from English real wages and real land rents for the period 1500-1800 are used to evaluate the impact of temperature and precipitations on under-developed economies. Estimating key parameters of an AK-growth model, we extract Total Factor Productivity (TFP hereafter) shocks and estimate the impact of temperature and extreme precipitation events (droughts and and flood) on TFP. We produce evidence that a two degree reduction of temperature lowers TFP by 0.1 (one standard deviation of TFP shocks). We also show that, conditionally on temperatures, the impact of floods on TFP is statistically significant while the impact of droughts is not. We consider these results as a useful benchmark to measure the impact of global warming and/or measures intended to contain it on developing economies.
    Keywords: Economic growth, Climate, Real wages, Land rents
    JEL: C22 N13 O41 O47 Q54
    Date: 2010–01–04
  14. By: Georg Grüll; Luca Taschini
    Abstract: This paper examines the key design mechanisms of existing and proposed cap-and-trade markets. First, it is shown that the hybrid systems under investigation (safety-valve with offsets, price floor using a subsidy, price collar, allowance reserve, and options offered by the regulator) can be decomposed into a combination of an ordinary cap-and-trade scheme with European- or American-style call and put options. Then, we quantify and discuss the advantages and disadvantages of the proposed hybrid schemes by investigating whether pre-set objectives (enforcement of permit price bounds and reduction of potential costs for relevant companies) can be accomplished while maintaining the original environmental targets.
    Date: 2009–11

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