New Economics Papers
on Agricultural Economics
Issue of 2010‒06‒11
twelve papers chosen by

  1. The Global Bioenergy Expansion: How Large Are the Food−Fuel Trade-Offs? By Fabiosa, Jacinto F.; Beghin, John C.; Dong, Fengxia; Elobeid, Amani; Tokgoz, Simla; Yu, Tun-Hsiang
  2. Perceptions of Best Management Practices on Thai Citrus Farms and the Development of an Agri-Environmental Policy: A Case Study in the Ping River Basin, Thailand By Wimolpat Bumbudsanpharoke
  3. Mediterranean Desertification and the Economic System By Luca Salvati
  4. Price Transmission in the Pineapple Market – What Role for Organic Fruit? By Linda Kleemann; Alexandra Effenberger
  5. Aflatoxin Redux: Does European Aflatoxin Regulation Hurt Groundnut Exporters from Africa? By Xiong, Bo; Beghin, John C.
  6. Impact of ASEAN-India FTA on India’s Plantation Commodities: A Simulation Analysis By Gordhan K. Saini
  7. Intra-Industry Trade in Agricultural Products: The Case of China By Wang Jing; Nuno Carlos Leitão; Horácio C. Faustino
  8. Fiscal Stimulus, Agricultural Growth and Poverty in Asia By Raghav Gaiha; Katsushi S. Imai; Ganesh Thapa; Woojin KANG
  9. Allocating Land for an Ecosystem Service: A Simple Model of Nutrient Retention with an Application to the Chesapeake Bay Watershed By David Simpson
  10. Rural development policies at regional level in the enlarged EU. The impact on farm structures By Francesco Pecci; Elisa Montresor; Nicola Pontarollo
  11. The Effects of an Environmental Policy on Consumers: Lessons from the Chinese Plastic Bag Regulation By He, Haoran
  12. Change and development in the Spanish wine industry, 1950-2009 By José Miguel Martínez-Carrión; Francisco José Medina-Albaladejo

  1. By: Fabiosa, Jacinto F.; Beghin, John C.; Dong, Fengxia; Elobeid, Amani; Tokgoz, Simla; Yu, Tun-Hsiang
    Abstract: We summarize a large set of recent simulations and policy analyses based on FAPRI’s world multimarket, partial-equilibrium models. We first quantify and project the emergence of biofuel markets in US and world agriculture for the coming decade. Then, we perturb the models with incremental shocks in US and world ethanol consumption in deviation from this projected emergence to assess their effects on world agricultural and food markets. Various food-biofuel trade-offs are quantified and examined. Increases in food prices are moderate for the US ethanol expansion and even smaller for the ethanol expansion outside the United States, which is based on sugarcane feedstock, which has little feedback on other markets. With the US expansion, the high protection in the US ethanol market limits potential adjustments in the world ethanol markets and increases the demand for feedstock within the United States. Changes in US grain and oilseed market prices propagate to world markets, as the United States is a large exporter in these markets. With changes in world prices, land allocation in the rest of the world responds to the new relative prices as in the United States but with smaller magnitudes because price transmission to local markets is less than full.
    Keywords: ethanol; biofuel; land effects; food prices; trade-offs
    Date: 2010–01–01
  2. By: Wimolpat Bumbudsanpharoke (Scottish Agricultural College, University of Edinburgh)
    Abstract: The Ping river basin, one of the major tributaries in northern Thailand, is strategically interlinked with major waterways livening agricultural activities for centuries. The basin is considerably recognised as an area to be protected from potential water-consumption threats impacting downstream's agricultural and industrial activities and residential areas. Over decades, economic expansion has changed the pattern of land use putting pressures on natural resources. One of the main concerns in the Ping river basin is a deterioration of water quality. Emissions from point sources, exemplified by large industrial facilities and communities, are regulated under command and control strategies. However, diffuse discharges from agricultural activities pose pervasive difficulties in management and policy design. The recent government report highlights citrus cultivation as the activity with a high application rate of chemicals, coupled with forest encroachment. Recognition of the significant of nonpoint source pollution problems has stimulated policy makers to promote Best Management Practices (BMPs) to control farm emissions at the watershed level. A number of agricultural economics studies have made policy recommendation based on an assumption that farmers are homogenous and make decision to maximise their well-being. However, there is a lack of research around behavioural responses to agri-environmental policy. As such, this study is tailored to employ contemporary interests of economic and behavioural principles in order to tackle the problem by understanding farmers' perspective and serving correct requirements rather than traditionally campaigning policies without sound agreements. The main objective of this study is to consider psychological perspectives on farmer decision making in relation to BMP adoption. The study attempts to investigate beliefs that are associated with decision making, to understand subjectivity in conservation behaviour, to assess costs of various BMP, and to make relevant policy recommendations. Prior to the main analysis, a set of BMPs is defined. Twelve BMPs suitable for implementation in the Ping river basin are selected based on expert judgement. Two psychological theories, the Theory of Planned Behaviour and QMethodology, are proposed to investigate farmers' behavioural intentions and latent perceptions, respectively. Further, the economic analysis of BMP cost at farm level is conducted to investigate cost effects and adoption intention.
    Keywords: citrus farm, agri-environmental policy, Thailand
    Date: 2010–03
  3. By: Luca Salvati (Sapienza University of Rome and National Council for Research in Agriculture)
    Abstract: This paper reviews the role of market, population growth, social issues, developmental policies, and other (minor) economic variables contributing to Mediterranean desertification. These variables were classified as describing the micro-economic and macro-economic factors suitable to assure a better comprehension of the environmental-economic nexus. Micro-economic factors like the higher prices and lower wages in the primary sector, as well as the reduction of off-farm employment reflect some potential causes of LD. It was also argued how technical change, agricultural input prices, and household income may affect land vulnerability but their contribution to this ecological problem is poorly known. On the contrary, the role of macroeconomic factors such as population density, poverty, and environmental policies, although more extensively studied on a qualitative base, was regarded as important but still relatively ambiguous, and needs further quantitative studies. Territorial disparities in land distribution, as well as increasing rural poverty and unsustainable management of soil and water were described as a consequence of the process triggering Mediterranean desertification. The effectiveness of policies aimed at mitigating LD and thus reducing desertification risk was finally discussed.
    Keywords: Land degradation, desertification, economic system, micro-economic causes, macro-economic factors, Mediterranean basin
    Date: 2010
  4. By: Linda Kleemann; Alexandra Effenberger
    Abstract: As consumers’ demand for organic products and especially organic food grows, organic certification for tropical fruit is increasingly promoted in many developing countries. Certified organic pineapple exports only started taking off after 2005 and are rapidly increasing. The organic and conventional fresh pineapple value chains are dominated by certification standards and large multinational companies respectively. The two markets, however, still differ greatly in size. We analyze if this influences the price structure in these markets. Specifically, the paper attempts to single out the existence and direction of causality between the conventional and organic pineapple price using the European pineapple market as an example. We study spatial price transmission, i.e. the difference in prices between the markets for organic and conventional pineapple. The results indicate the dependence of organic market price movements on conventional ones. On the contrary, the conventional market is not affected by this niche market
    Keywords: price transmission, private standards, organic agriculture, organic markets
    JEL: F14 L11 L15 O13 Q13 Q17
    Date: 2010–06
  5. By: Xiong, Bo; Beghin, John C.
    Abstract: We provide an ex-post econometric examination of the harmonization and tightening of the EU Maximum Residues Limit (MRL) on aflatoxins in 2002 and its impact on African exports of groundnut products. We show that the MRL set by the EU has no significant trade impact on groundnut exports from Africa across various methods of estimation. African domestic supply plays an important role in the determination of the volumes of trade and the propensity to trade. Our findings suggest that the trade potential of African groundnut exporters is more constrained by domestic supply issues rather than by limited market access.
    Keywords: food safety; market access; standards; aflatoxin; MRL; groundnut; Africa; EU
    JEL: F13 Q17
    Date: 2010–06–02
  6. By: Gordhan K. Saini (Indira Gandhi Institute of Development Research)
    Abstract: The present study attempts a quantitative assessment of the impact of recently signed ASEAN-India FTA (AIFTA) for selected plantation commodities (coffee, tea and pepper) in India. We use partial equilibrium modeling approach (SMART model and gravity model) to simulate the likely import increase of the plantation commodities under the proposed tariff reduction schedule of the AIFTA. Overall, the results suggest that the AIFTA will cause significant increase in India’s import of plantation commodities. The increase in imports is mostly driven by trade creation rather than trade diversion. From the economic efficiency point of view, trade creation improves welfare as the new imports replace the high-cost domestic production. The analysis shows that the proposed tariff reduction may lead to significant tariff revenue loss to the government. However, the gain in consumer surplus (due to the fall in domestic price and the consequent reduction in dead-weight loss) outweighs the loss in tariff revenue leading to net welfare gain. By and large, the simulations based on the SMART and gravity models provide similar results on the magnitude of total increase in imports. The surge of new imports may have adverse impact for the livelihood of the Indian farmers engaged in the production of these commodities. Farmers will have to realign the structure of production according to the changing price signals and hence it is critical to provide adjustment assistance to the affected farmers.
    Keywords: SMART Model, Gravity Model, Simulation Analysis
    JEL: F10 F14 F17
    Date: 2010
  7. By: Wang Jing; Nuno Carlos Leitão; Horácio C. Faustino
    Abstract: This paper studies the extent and determinants of intra-industry trade (IIT) in agricultural products of China for the period 1997-2006. The IIT index shows that the level of IIT in agricultural products between China and its thirteen main trading partners is not high. Using a panel data analysis, the empirical results of determinants of IIT indicate that differences in per-capita income and geographical distance have a negative effect on Chinese IIT in agricultural products. Free trade agreements between China and some trading partners weaken the negative effect of per-capita income differences on IIT. The results also suggest that cultural similarity between China and some countries has a positive influence on this type of trade.
    Keywords: agricultural products; intra-industry trade; China.
    JEL: F14
    Date: 2010–04
  8. By: Raghav Gaiha (Faculty of Management Studies, University of Delhi, India); Katsushi S. Imai (Economics, School of Social Science, University of Manchester, UK); Ganesh Thapa (International Fund for Agricultural Development, Rome, Italy); Woojin KANG (Economics, School of Social Sciences, University of Manchester, UK)
    Abstract: Recent debates on a sustainable recovery of the global economy have tended to overemphasise the "savings glut" hypothesis and the unavoidable imperative of higher consumption in China and other emerging Asian countries. That oversaving and not underinvestment is coming in the way of a quicker and more durable recovery is not just simplistic but misleading from a medium- term growth perspective for emerging Asian countries and other developing countries in this region. Drawing upon country panel data for developing countries and a sub-sample of Asian countries during the period 1991 to 2007, the present study makes a case for a bold and coordinated fiscal stimulus, directed to stimulating agricultural and overall growth, and mitigation of poverty and hunger. Our simulations further suggest that poverty reduction is likely to be larger if the fiscal stimulus is directed to social spending in health and education sectors. Indeed, if our simulations of fiscal impacts have any validity, the dire predictions of millions getting trapped in poverty and hunger may turn out to be exaggerated. The prospects of a strong recovery led by fiscal stimulus are thus real and achievable.
    Keywords: Government Expenditure, Fiscal Policy, Economic Growth, Agricultural Growth, Poverty, Asia
    JEL: C21 C33 E62
    Date: 2010–04
  9. By: David Simpson
    Abstract: There has been great interest in recent decades in “ecosystem services”. One of the services most often mentioned is the retention of nutrients. I construct a simple model of agricultural land use under a regulatory requirement that nutrient loading cannot exceed a fixed ceiling develop three propositions. First, when the regulatory constraint is relatively weak there will be a corner solution in which no land is set aside to provide the service of nutrient retention. Second, for any given regulatory constraint there is in general a minimum amount of land that would be set aside to provide ecosystem services, regardless of the efficiency with which preserved land provides the nutrient retention function. Third, there is sort of paradox of value: the more valuable it is to set some land aside for nutrient retention, the less land in total would optimally be preserved for this purpose. I illustrate the implications of this model with an application to the Chesapeake Bay watershed. Estimates reported in the literature suggest that land retained in natural cover could prove very effective in retaining reactive nitrogen and other nutrients. If so, there is a sort of “good news/bad news” scenario for conservation advocates touting the importance of ecosystem services. The good news is that the ecosystem service of nitrogen retention is, in fact, likely to be very valuable. The bad news is that “a little may go a long way”: setting aside small areas of land may be sufficient.
    Keywords: Reactive nitrogen, diamonds and water paradox, Ecosystem services, constrained optimization, Land use regulation, corner solution
    JEL: Q24 Q53 Q58
    Date: 2010–04
  10. By: Francesco Pecci (Department of Economics (University of Verona)); Elisa Montresor (Department of Economics (University of Verona)); Nicola Pontarollo (Department of Economics (University of Verona))
    Date: 2010–05
  11. By: He, Haoran (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: To reduce plastic bag litter, China introduced a nationwide regulation requiring all retailers to charge for plastic shopping bags on June 1, 2008. By using the policy implementation as a natural experiment and collecting individual-level data before and after the implementation, we investigate the impacts of the regulation on consumers’ bag use. We find that the regulation implementation caused a 49% reduction in the use of new bags. Besides regulation enforcement, consumers’ attitude toward the regulation and some consumers’ socioeconomic characteristics also affected bag consumption. However, the regulation effects differ largely among consumer groups and among regions and shopping occasions.<p>
    Keywords: China; litter; market-based policy; natural experiment; plastic bag
    JEL: Q53 Q58
    Date: 2010–06–03
  12. By: José Miguel Martínez-Carrión (Applied Economics Department, Faculty of Economics and Business (Universidad de Murcia). Campus Espinardo, 30100, Espinardo (Murcia, Spain)); Francisco José Medina-Albaladejo (Applied Economics Department, Faculty of Economics and Business (Universidad de Murcia). Campus Espinardo, 30100, Espinardo (Murcia, Spain))
    Abstract: In recent years the European winegrowing regions have been carrying out deep changes in response to increasing international competition, outstanding the case of Spain. This study analyses the main sequences of changes the Spanish wine industry has undergone: the evolution of consumption; the role of exports; the spread of marketing and business organization; the factors that have been involved in the modernization of the wineries. An initial valuation leads us to conclude that it has been an authentic wine revolution in reference to the transformations that have occurred in a period of farming changes and technological modernization for the businesses
    Keywords: Wine industry revolution, technological modernization, enological change, Spain, twentieth century.
    JEL: N54 O33 Q13 L66
    Date: 2010–06

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