New Economics Papers
on Agricultural Economics
Issue of 2010‒04‒24
thirteen papers chosen by

  1. Climate Change Impacts on Global Agriculture By Alvaro Calzadilla; Katrin Rehdanz; Richard Betts; Pete Falloon; Andy Wiltshire; Richard S.J. Tol
  2. The World Bank’s approach to increasing the vulnerability of small coffee producers. By Sasha C. Breger Bush
  3. Technical Efï¬ciency, Farm Size and Tropical Deforestation in the Brazilian Amazonian Forest By Sébastien MARCHAND
  4. Modeling the Effects of Pasture Expansion and Yield Increase on Emissions from Land-Use Change By Jerome Dumortier; Dermot J. Hayes; Miguel Carriquiry; Fengxia Dong; Xiaodong Du; Amani Elobeid; Jacinto F. Fabiosa; Kranti Mulik
  5. Land Certification and International Migration: Evidence from Mexico By Valsecchi, Michele
  6. Food Price Subsidy under Public Distribution System in Andhra Pradesh, Maharashtra and Rajasthan By Raghbendra Jha; Raghav Gaiha; Manoj K. Pandey
  7. Drivers of Poverty Reduction in Lagging Regions: Evidence from Rural Western China By Christiaensen, Luc, Demery, Lionel and Kuhl, Jesper
  8. The Right Price of Food: Reflections on the Political Economy of Policy Analysis and Communication By Johan F.M. Swinnen
  9. Trade, tastes and Nutrition in India By David Atkin
  10. Vulnerability and Coping to Disasters: A Study of Household Behaviour in Flood Prone Region of India By Unmesh Patnaik; Narayanan K
  11. The (Evolving) Role of Agriculture in Poverty Reduction: An Empirical Perspective By Christiaensen,Luc; Demery,Lionel and Kuhl, Jesper
  12. What Are the Consequences of Consequentiality? By Herriges, Joseph A.; Kling, Catherine L.; Liu, Chih-Chen; Tobias, Justin
  13. World Trade Patterns and Prices: The Role of Productivity and Quality Heterogeneity By Benedetti Fasil, Cristiana; Borota, Teodora

  1. By: Alvaro Calzadilla; Katrin Rehdanz; Richard Betts; Pete Falloon; Andy Wiltshire; Richard S.J. Tol (Economic and Social Research Institute)
    Abstract: Based on predicted changes in the magnitude and distribution of global precipitation, temperature and river flow under the IPCC SRES A1B and A2 scenarios, this study assesses the potential impacts of climate change and CO2 fertilization on global agriculture. The analysis uses the new version of the GTAP-W model, which distinguishes between rainfed and irrigated agriculture and implements water as an explicit factor of production for irrigated agriculture. Future climate change is likely to modify regional water endowments and soil moisture. As a consequence, the distribution of harvested land would change, modifying production and international trade patterns. The results suggest that a partial analysis of the main factors through which climate change will affect agricultural productivity lead to different outcomes. Our results show that global food production, welfare and GDP fall in the two time periods and SRES scenarios. Higher food prices are expected. Independently of the SRES scenario, expected losses in welfare are marked in the long term. They are larger under the SRES A2 scenario for the 2020s and under the SRES A1B scenario for the 2050s. The results show that countries are not only influenced by regional climate change, but also by climate-induced changes in competitiveness.
    Keywords: Computable General Equilibrium, Climate Change, Agriculture, Water Resources, River Flow
    JEL: D58 Q17 Q25 Q54
    Date: 2010–04
  2. By: Sasha C. Breger Bush
    Abstract: This paper critically engages the World Bank’s recent experiments in providing marketbased price risk management for coffee farmers. Using the case of Mexico and the recent 1998–2002 coffee crisis, I argue that such advocacy of farm-level use of derivatives markets entails large direct and indirect costs for coffee farmer wellbeing. This is especially so for smallholders. Not only might hedging with derivatives further destabilise and reduce producer incomes, but the opportunity cost of the Bank’s advocacy, in terms of foregone risk management alternatives, is also problematic. I conclude with a discussion of several risk management alternatives that may better support small coffee producers facing volatile commodity prices.
    Date: 2010
  3. By: Sébastien MARCHAND
    Abstract: This paper analyses the impact of farm productivity as well as farm size on deforestation in Brazil. A two step econometric approach is adopted. A bootstrapped translog stochastic fron- tier that is a posteriori checked for functional consistency is used in order to estimate technical efï¬ciency of which estimates are introduced in a land use model to assess the impact of pro- ductivity and farm size on deforestation. Analysis of agricultural census tract data suggests that "technical efï¬ciency" has a non-linear (convex) effect: less and more efï¬cient farms use more land for agricultural activities and so they have a positive effect on deforestation. However, the majority of farms are on the ascendant slope so that efï¬ciency implies more deforestation in Brazilian Legal Amazon. Moreover, farmsize has a robust negative effect on deforestation. Con- trary to many studies, this result suggests that small farms convert more natural (forested) land into agricultural land than large ones.
    Keywords: tropical deforestation, productivity, Farm size, Stochastic frontier model, Land usemodel, Brazil.
    JEL: Q24 Q12
    Date: 2010
  4. By: Jerome Dumortier (Center for Agricultural and Rural Development (CARD)); Dermot J. Hayes (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Miguel Carriquiry (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Fengxia Dong (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Xiaodong Du (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Amani Elobeid (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Kranti Mulik
    Abstract: This paper evaluates the land-use and greenhouse gas emission impact of higher yields in the European Union and a livestock tax in the United States using a global agricultural outlook model and a greenhouse gas model that includes land-use change from cropland and pasture. Both policies are intended to reduce greenhouse gas emissions by decreasing carbon release from indirect land-use change and lowering livestock emissions. A yield increase in the European Union leads to savings whereas the tax scenario leads to ambiguous results depending on the assumption about extensification and intensification of livestock production.
    Keywords: crop yield, greenhouse gas emissions, land-use change, pasture extensification.
    Date: 2010–02
  5. By: Valsecchi, Michele (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In this paper we ask whether there is a relationship between property rights and international migration. In order to identify the impact of property rights, we consider a country-wide land certification program, which took place in Mexico throughout the 1990s, and complemented the 1992 Agrarian Law. Our identifica- tion strategy exploits the timing of the program and the heterogeneity in farmers’ eligibility into the program. We find that the change in de facto property rights is associated with a 9-16 percent increase in the likelihood of having a member abroad. The program explains a small but relevant share of the increase in migration to the United States which Mexico experienced throughout the 1990s. In this respect, we add to the current debate on the causes of Mexican migration (Hanson 2006, Hanson and McIntosh 2009, Hanson and McIntosh forthcoming).<p>
    Keywords: International migration; property rights; land titling; land reform
    JEL: D23 F22 Q15
    Date: 2010–04–19
  6. By: Raghbendra Jha; Raghav Gaiha; Manoj K. Pandey
    Abstract: The present paper uses primary household level data collected in 2007-08 for the rural sector of three Indian states, Andhra Pradesh (AP), Maharashtra and Rajasthan, to evaluate the impact of the Targeted Public Distribution System (TPDS) in these three states. The paper presents a basic profile of the TPDS in these states and then goes on to assess the difference between subsidized TPDS price and market price for rice, wheat sugar and kerosene at the village level by per capita expenditure class and then conducts stochastic dominance comparisons across non-participants and participants in the three states. It examines various other characteristics of the experience with TPDS in these states including waiting times for different types of card holders, the distribution of the shares of expenditure on food items brought from TPDS among TPDS households and the distribution of the real income transferred through TPDS. The paper finally reports on a Tobit analysis of the quantity of food items such as wheat, rice and sugar demanded by households through the TPDS.
    Keywords: Targeted Public Distribution System, Food subsidy, Targeting Errors
    JEL: D12 D63 H24 H42
    Date: 2010
  7. By: Christiaensen, Luc, Demery, Lionel and Kuhl, Jesper
    Abstract: Using 2000-04 panel data this study analyses the pathways rural households followed out of poverty in two lagging provinces of China, Inner Mongolia and Gansu. Rising labour productivity in agriculture has been key, and still holds much promise. Labour mobility has also been important in Gansu. So far, rural diversification has not proven to contribute much to poverty reduction. Income transfers and agricultural tax abolishment have helped at the margin. Overall, the findings highlight that the scope for reducing poverty in lagging rural regions is often substantial in agriculture, also in countries where non-agriculture drives overall growth.
    Keywords: agriculture, migration, rural nonfarm employment, lagging region, poverty
    Date: 2010
  8. By: Johan F.M. Swinnen
    Abstract: Only a few years ago the widely shared view was that low food prices were a curse to developing countries and the poor. The dramatic increase of food prices in 2006-2008 appears to have fundamentally altered this view. The vast majority of analyses and reports in 2008 and 2009 state that high food prices have a devastating effect on developing countries and the world’s poor. This reversal of opinion raises questions about the old and the new arguments and about the proposed remedies. It also raises questions about the causes of this dramatic turnaround in analysis and policy conclusions. In this paper I document these changes in perspective and I discuss potential implications and offer hypotheses on the cause of the change in views.
    JEL: J11 J15 Y80
    Date: 2010
  9. By: David Atkin (Economic Growth Center, Yale University)
    Abstract: This paper introduces habit formation into an otherwise standard model of international trade. Household tastes evolve over time to favor foods consumed as a child. The opening of trade causes preferred goods to rise in price, as these were relatively inexpensive in autarky. Neglecting the correlation between tastes and agro-climatic endowments overstates the short-run nutritional gains from agricultural trade liberalization and masks potential caloric losses for laborers. I examine the predictions of this model of trade with habit formation using household survey data from India, both by looking across Indian regions and by examining the consumption patterns of inter-state migrants.
    Keywords: international trade, habit formation, India, Tastes, nutrition
    JEL: O10 O12 Q17 F10
    Date: 2010–04
  10. By: Unmesh Patnaik; Narayanan K
    Abstract: This paper attempts to understand the various risks faced by households living in disaster prone regions of rural India and specifically examine the effectiveness of coping mechanisms adopted by households living in these areas to hedge against the risks. The study area (districts of eastern Uttar Pradesh, India) is highly susceptible to floods with a major flood occurring every ten years and smaller ones happening every one-two years. The data is drawn from primary household surveys undertaken in the study area for flood affected households. The analysis is carried out using a risk sharing and self insurance framework and econometric modeling is carried out using binary outcomes and multivariate probit estimation through GHK (Geweke- Hajivassiliou- Keane) estimator.
    Keywords: multivariate probit estimation, consumption, risk, Vulnerability, livelihoods, developing countries, climate, disasters, rural, Uttar Pradesh, India, floods, households, insurance, econometric modelling,
    Date: 2010
  11. By: Christiaensen,Luc; Demery,Lionel and Kuhl, Jesper
    Abstract: The role of agriculture in development remains much debated. This paper takes an empirical perspective and focuses on poverty, as opposed to growth alone. The contribution of a sector to poverty reduction is shown to depend on its own growth performance, its indirect impact on growth in other sectors, the extent to which poor people participate in the sector, and the size of the sector in the overall economy. Bringing together these different effects using cross-country econometric evidence indicates that agriculture is significantly more effective than nonagriculture in reducing poverty among the poorest of the poor (as reflected in the $1-day squared poverty gap). It is also up to 3.2 times better at reducing $1-day headcount poverty in low-income and resource-rich countries (including those in sub-Saharan Africa), at least when societies are not fundamentally unequal. However, when it comes to the better-off poor (reflected in the $2-day measure), non-agriculture has the edge. These results are driven by the much larger participation of poorer households in growth from agriculture and the lower poverty-reducing effect of non-agriculture in the presence of extractive industries.
    Keywords: agriculture, economic growth, poverty, sub-Saharan Africa
    Date: 2010
  12. By: Herriges, Joseph A.; Kling, Catherine L.; Liu, Chih-Chen; Tobias, Justin
    Abstract: We offer an empirical test of a theoretical result in the contingent valuation literature. Specifically, it has been argued from a theoretical point of view that survey participants who perceive a survey to be ``consequential'' will respond to questions truthfully regardless of the degree of perceived consequentiality. Using survey data from the Iowa Lakes Project, we test this supposition. Specifically, we employ a Bayesian treatment effect model in which the degree of perceived consequentiality, measured as an ordinal response, is permitted to have a structural impact on willingness to pay (WTP) for a hypothetical environmental improvement. We test the theory by determining if the WTP distributions are the same for each value of the ordinal response. In our survey data, a subsample of individuals were randomly assigned supporting information suggesting that their responses to the questionnaires were important and will have an impact on policy decisions. In conjunction with a Bayesian posterior simulator, we use this source of exogenous variation to identify the structural impacts of consequentiality perceptions on willingness to pay, while controlling for the potential of confounding on unobservables. We find evidence consistent with the ``knife-edge'' theoretical results, namely that the willingness to pay distributions are equal among those believing the survey to be at least minimally consequential, and different for those believing that the survey is irrelevant for policy purposes.
    Keywords: nonmarket valuation
    JEL: Q00
    Date: 2010–01–01
  13. By: Benedetti Fasil, Cristiana (European University Institute); Borota, Teodora (Department of Economics)
    Abstract: This paper analyzes the role of product quality and labor efficiency in shaping the trade patterns and trade intensities within and across two groups of countries, the developed and richer North and the developing South. Taking prices as a proxy for quality, recent empirical literature identifies a positive relation between income per capita and both export and import prices, suggesting that rich countries trade goods of relatively higher quality. Instead of relying on specific demand side mechanisms such as non-homothetic preferences, we focus on the North-South differences in technology. We employ a four country North-South trade model with two dimensions of firm heterogeneity. Differences in firms’ product qualities and cost efficiencies result in a price distribution generating different consumption bundles and the observed export and import prices across rich and poor countries. Furthermore, the resulting total expenditure allocation across quality shows that the North (South) spends a larger share of its income on high (low) quality even with the same homothetic preferences across regions.
    Keywords: International trade patterns; North-South trade; import and export prices; heterogeneous firms; product quality
    JEL: F10 F12 F14 L11 L15
    Date: 2010–04–15

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