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on Agricultural Economics |
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Issue of 2010‒07‒17
57 papers chosen by |
| By: | Gurdev Singh |
| Abstract: | This working paper discusses the dependence of Indian agriculture on uncertain rains. In addition the farmers experience other production risks as well as marketing risks related to different crop enterprises and for different agro-climatic regions and areas. It then argues on the need for crop insurance as an alternative to manage production risk. It then takes up the historical overview of crop insurance products and their performance. It is followed by the discussion on the currently available crop insurance products for specific crops and regions. It discusses at length the two important products, namely, National Agricultural Insurance Scheme and Weather Based Insurance Scheme. It also reflects on some deficiencies in these products. [W.P. No. 2010-06-01 |
| Keywords: | Indian agriculture,uncertain rains, crop enterprises, crop insurance, agro-climatic regions, performance, National Agricultural Insurance Scheme, Weather Based Insurance Scheme |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2631&r=agr |
| By: | Anderson, Duncan; Jack, Claire; Connolly, Niamh; Ferris, Conrad; Carson, Alistair |
| Abstract: | The European dairy industry faces an increasingly uncertain world. There is uncertainty about subsidy payment levels and compliance conditions, global competition, price variability, consumer demand, carbon footprints, water quality, biodiversity, landscapes, animal welfare, food safety, etc. The future is uncertain because it cannot be reliably predicted; therefore the industry must adopt production systems that will be financially robust over a wide range of possible circumstances. Adding to the uncertainty is a lack of consensus regarding the specific characteristics of these sustainable production systems. In this interdisciplinary research project we developed a profit maximizing whole-farm model and employ it to identify robust milk production systems for Northern Ireland under varying market, policy and farm family conditions. The milk production systems incorporated into the model involve variations in date of calving, quantity of concentrate fed, and nature of forage utilized. The model also incorporates a disaggregated specification of time use within farm households and links intra-household resource allocation to the process of agricultural technology adoption. This work illustrates how profit maximizing whole-farm models can play a decision support role in helping farmers, agricultural researchers, agribusiness advisers and agricultural policy makers to identify economically sustainable agricultural production systems. |
| Keywords: | Production Economics, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91801&r=agr |
| By: | Quillérou, Emmanuelle; Fraser, Rob, Prof.; Fraser, Iain, Dr |
| Abstract: | The Environmental Stewardship Scheme provides payments to farmers for the provision of environmental services based on foregone agricultural income. This creates a potential incentive compatibility problem which, combined with an information asymmetry on farm land heterogeneity, could lead to adverse selection of farmers into the Scheme and therefore reduced cost-effectiveness of the Scheme. This reduced cost-effectiveness would be represented by a systematic overpayment of farmers for the land enrolled into the Scheme, compared to the opportunity cost of production. This paper examines the potential adverse selection problem affecting the higher tier of the Environmental Stewardship, the Higher Level Stewardship, using a principal agent framework combined with farm-level data on participation in the HLS. Empirically, it is found that, at the farm level, HLS participation is negatively related to cereal yields, suggesting the existence of adverse selection in the HLS and farmer overcompensation from entering the scheme. |
| Keywords: | Adverse selection, agri-environment, Environmental Stewardship, principal-agent, contract, Environmental Economics and Policy, D78, D82, H44, Q18, Q58, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91676&r=agr |
| By: | Davis, Kristin; Nkonya, Ephraim; Kato, Edward; Mekonnen, Daniel Ayalew; Odendo, Martins; Miiro, Richard; Nkuba, Jackson |
| Abstract: | Farmer field schools (FFSs) are a popular education and extension approach worldwide. Such schools use experiential learning and a group approach to facilitate farmers in making decisions, solving problems, and learning new techniques. However, there is limited or conflicting evidence as to their effect on productivity and poverty, especially in East Africa. This study is unique in that it uses a longitudinal impact evaluation (difference in difference approach) with quasi-experimental methods (propensity score matching and covariate matching) together with qualitative approaches to provide rigorous evidence to policymakers and other stakeholders on an FFS project in Kenya, Tanzania, and Uganda. The study provides evidence on participation in FFSs and on the effects of FFSs on various outcomes. The study found that younger farmers who belong to other groups, such as savings and credit groups, tended to participate in field schools. Females made up 50 percent of FFS membership. Reasons for not joining an FFS included lack of time and information. FFSs were shown to be especially beneficial to women, people with low literacy levels, and farmers with medium-size land holdings. FFS participants had significant differences in outcomes with respect to value of crops produced per acre, livestock value gain per capita, and agricultural income per capita. FFSs had a greater impact on crop productivity for those in the middle land area (land poverty) tercile. Participation in FFSs increased income by 61 percent when pooling the three countries. FFSs improved income and productivity overall, but differences were seen at the country level. Participation in FFSs led to increased production, productivity, and income in nearly all cases: Kenya, Tanzania, and at the project level (all three countries combined). The most significant change was seen in Kenya for crops (80 percent increase) and in Tanzania for agricultural income (more than 100 percent increase). A lack of significant increases in Uganda was likely due to Uganda’s National Agricultural Advisory Services. When disaggregating by gender, however, female-headed households benefited significantly more than male-headed households in Uganda. |
| Keywords: | farmer field schools, agricultural productivity, adoption, extension services, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:992&r=agr |
| By: | Zhang, Lichun; McErlean, Seamus; Patton, Myles |
| Abstract: | This paper examines farmersâ decision making under risk and uncertainty. In particular, the study identifies the type of risk preference (averse, neutral or seeking) and measures the magnitude of risk preference before and after the introduction of the Single Farm Payment (SFP). The analysis therefore provides an insight into the impact of this fundamental policy change on farmer risk behaviour. Furthermore, it examines agricultural production decision making under price uncertainty. Empirically, it evaluates the impact of risk and uncertainty using Farm Business Survey (FBS) data of NI dairy farms. Using an econometric approach (maximize expected utility), a comprehensive methodology is employed that enables price uncertainty and risk preference under the Common Agricultural Policy (CAP) to be analysed simultaneously. The methodology permits the testing of common risk aversion theoretical hypotheses, including Arrowâs hypothesis on the effect of wealth on the measures of risk aversion. Also, this methodology enables the identification of the impact of farmersâ attitude to risk, price uncertainty and other criteria (e.g. age, education, and family labour) on their production decisions. The results are relevant to both policy makers and farmers. With regards to the former, the results reveal the factors which influence famersâ decision making, therefore, enabling policy makers to evaluate the effectiveness and efficiency of agricultural policies and thus introduce improvements in future policies. With regards to farmers, the results demonstrate the consequences of risk and uncertainty on their operational environment. |
| Keywords: | Agricultural and Food Policy, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91802&r=agr |
| By: | Yu, Bingxin; Liu, Fengwei; You, Liangzhi |
| Abstract: | China has experienced dramatic economic transformation and is facing the challenge of ensuring steady agricultural growth. This study examines the crop sector by estimating the supply response for major crops in Henan province from 1998 to 2007. We use a Nerlovian adjustment adaptive expectation model. The estimation uses dynamic Generalized Method of Moments (GMM) panel estimation based on pooled data across 108 counties. We estimate acreage and yield response functions and derive the supply response elasticities. This research links supply response to exogenous factors (weather, irrigation, government policy, capital investment, and infrastructure) and endogenous factors (prices). The significant feature of the model specification used in the study is that it addresses the endogeneity problem by capturing different responses to own- and cross-prices. Empirical results illustrate that there is still great potential to increase crop production through improvement of investment priorities and proper government policy. We confirm that farmers respond to price by both reallocating land and more intensively applying non-land inputs to boost yield. Investment in rural infrastructure, human capacity, and technology are highlighted as major drivers for yield increase. Policy incentives such as taxes and subsidies prove to be effective in encouraging grain production. |
| Keywords: | acreage and yield response, dynamic panel model, Generalized Method of Moments (GMM), supply elasticity, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:987&r=agr |
| By: | Costa-Font, Montserrat; Tranter, Richard; Gil, José M; Jones, Philip; Gylling, Morten |
| Abstract: | The introduction and communication of new technologies in the food industries has given rise in the past to some scientific uncertainty that hampers informed choice. Here we draw upon the case of Genetically Modified (GM) technology and, in particular, on different types of GM food, to investigate consumersâ behavioural reactions to GM food as well as their willingness to pay for avoiding GM food in three EU countries, Denmark, GB and Spain in 2007. Our unique contribution lies in that our empirical analysis concerns two food products containing different characteristics. In particular, we compare consumersâ reactions to cornflakes (to represent a processed food) and tomatoes (to represent a 'fresh' food) juxtaposed with GM and conventionally produced food. Our results reveal that, although GM food is the least preferred production process (vis-Ã -vis organic or conventional food), consumers can be divided into two groups depending on their preferences for organic food. Namely, a first group is made up of GB and Spain where consumers are willing to pay a small, or modest, premium over the respective market average price, and a second group is that of Denmark where consumersâ willingness to pay is significantly larger. Although risk is an influential characteristic, risk rankings indicate that GM food is perceived as less risky than irradiation, artificial growth hormones in food or pesticides used in the production process. |
| Keywords: | Genetically modified food, consumer behaviour, choice models, Denmark, Grate Britain and Spain., Food Security and Poverty, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91750&r=agr |
| By: | Murphy, Geraldine; Hynes, Stephen; Murphy, Eithne; OâDonoghue, Cathal |
| Abstract: | This paper modelled the participation decision of Irish farmers in an agri-environmental scheme. It also uses the sub sample of farmers in the National Farm Survey actively participating in the scheme in 2007 to model the various biodiversity options undertaken as a function of farmer demographic characteristics, farm characteristic and habitat variables. The results of the analysis demonstrate that younger, married farmers with larger farms are more likely to participate in REPS and that the voluntary aspect of REPS can mean that not all habitat types are equally likely to be covered by the scheme. Farmers with internationally important habitats on their farm, like intact peatlands or semi-natural grasslands are more likely to participate in REPS. However, there is evidence to suggest that these farmers are choosing to participate in REPS because they view their land as having low economic value rather than having high ecological value. Farmers with water or wetland and forest are less likely to participate in REPS, which indicates that some important ecosystems may not be included in the scheme. The 1 biodiversity options undertaken by the farmers are found to facilitate the management of the system of farming on the holing rather than the type of habitats on the land. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91829&r=agr |
| By: | Erdem, Seda; Rigby, Dan; Wossink, Ada |
| Abstract: | We report results of an analysis of the attribution of relative responsibility across the stages of the food chain for ensuring food safety. Specifically, we identify perceptions of the share of the overall responsibility that each stage in the food chain has to ensure that the meat people cook and eat at home does not cause them to become ill. Results are reported for two groups of stakeholders: consumers and farmers, and for two types of meat: chicken and beef. The stakeholdersâ opinions regarding the relative degrees of responsibility of the sequential food chain stages (feed supplier, farmer, livestock transportation, abattoir,⦠consumer) are elicited via surveys using the Maximum Difference technique (best-worst scaling). The data are analyzed using mixed logit models estimated via Bayesian techniques. We find that consumers and farmers both tend to allocate a relatively low share of responsibility to their own food safety role. So, consumes tend to think farmers are more responsible for ensuring meat safety than farmers do. Similarly, farmers tend to think consumers have a greater degree of responsibility than consumers themselves believe. Thus, there is a consistent pattern of downplaying the extent of oneâs own responsibility. Further, consumers tend to allocate the highest shares of responsibility to the middle stages of the meat food chain. This contrasts with farmers who tend to allocate the highest shares of responsibility to the latter stages of the chain towards consumers, believing that the earlier stages of the chain (until the livestock arrive at the abattoir) have a relatively low share of responsibility. In the conclusion, we elaborate on the implications of our findings for further research into food safety economics. |
| Keywords: | Food Consumption/Nutrition/Food Safety, Q18, Q51, D03, D12, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91813&r=agr |
| By: | Kotakou, Christina A.; Katranidis, Stelios D |
| Abstract: | This paper examines the effects of decoupling policies on Greek cotton production under the hypothesis that producers face uncertainty about output price and quantity. Using our estimation results we simulate the effects on cotton production under four alternative policy scenarios: the âOldâ CAP regime (i.e. the policy practiced until 2005), the Mid Term Review regime, a fully decoupled policy regime and a free tradeno policy scenario. Our results indicate the decoupled payment will have two contradictious effects on risk aversion. Producers become less risk averse through the wealth effect but more risk averse because of the increased output variance. The overall result of these two effects depends on the degree of risk aversion by farmers. We found that when the degree of risk aversion is high the wealth effect is positive. However, in the case of low risk aversion and a wealth effect equal to zero the decoupled payments become production neutral. |
| Keywords: | Common Agricultural Policy, decoupling, uncertainty, Agricultural and Food Policy, D21, Q18, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91753&r=agr |
| By: | Hassouneh, Islam; Radwan, Amr; Serra, Teresa; Gil, José M. |
| Abstract: | In recent years, health risks have received increasing attention among consumers and created interest in analysing the relationship between food scares, food consumption and market prices. One of the most relevant and recent food scares is the avian influenza that has had important effects not only on human and animal health, but also on the economy. We assess effects of avian influenza on price transmission along the Egyptian poultry marketing chain. Although Egypt has been one of the most affected countries by avian influenza, this article is the first attempt to understand this food scareâs impacts on Egyptian poultry markets. In doing so, a multivariate smooth transition vector error correction model (STVECM) is applied to monthly poultry price data. In order to reflect consumer awareness of the crisis, an avian influenza food scare information index is developed and used within the model as a transition variable. Our results suggest that price adjustments to deviations from the market equilibrium parity depend on the magnitude of the avian influenza crisis. Results also suggest that food safety information indices, that have been widely used to assess the economic impacts of food scare crises in developed countries, also contribute to understanding the economic effects of food scare crises in developing countries. |
| Keywords: | Food scare, avian influenza, price transmission, Egypt., Production Economics, C22, Q13, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91830&r=agr |
| By: | Raabe, Katharina |
| Abstract: | The global hunger indices of 2008 and 2009 (Grebmer et al. 2008, 2009) point to persistently high levels of hunger and food insecurity and a worsening of the situation due to rising crop prices. At the same time, there is a lack of empirical knowledge on the demand- and supply-side determinants of crop prices. Given this situation, this paper estimates structural equation models by means of the three-stage least-squares estimator to identify the sensitivity of the price of three major crops (wheat, maize, and rice) in up to eight countries (India, China, Egypt, Thailand, Ecuador, Uruguay, the United States, and Australia) to global and country-specific crop demand and supply conditions. The evidence suggests that conclusions regarding the determinants of crop prices critically depend on the choice of crop and country. The nonexistence of a consistent and homogenous set of price determinants suggests that the stability and predictability of crop prices depends on country-specific domestic policies that target both the crop demand and supply side. The evidence also suggests that supply-side initiatives are likely to be more effective to this end. |
| Keywords: | Agriculture, food prices, crop prices, simultaneous equations, three-stage least-squares |
| JEL: | C32 Q11 Q19 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-451&r=agr |
| By: | Mary, Sébastien |
| Abstract: | The Common Agricultural Policy has radically been reformed in 2003 with the introduction of âdecoupledâ direct payments. Economic theory suggests that direct payments are expected to have no impact on production in a static deterministic environment with perfect markets for capital and labour. But if factor market imperfections or uncertainty are taken into account, this is no longer true. Taking into account these potential impacts, the empirical literature has studied the impacts of farm payments. However, most studies are based on assumptions such as perfect markets, risk neutrality or static environment. Recent researches have also often neglected the role of debt constraints. The paper develops and numerically solves a dynamic stochastic farm household model with occasionally binding debt constraints and investment adjustment costs. The impacts of direct and counter-cyclical payments are explored and compared to an increase in the intervention price. Results show that both types of payments will positively impact on investment, but the impacts on output will not be as significant as it is with an increase in intervention price. Further, the degree of decoupling of Single Farm Payments in the French crops sector is found to be significantly linked to the degree of capital market imperfections. |
| Keywords: | Single Farm Payment, farm investment, dynamic stochastic farm household model, debt constraints., Agricultural and Food Policy, Q12, Q18, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91681&r=agr |
| By: | Bokushevar, Raushan; Kumbhakar, Subal C; Lehmann, Bernard |
| Abstract: | This paper analyzes the evolution of Swiss farm productivity during the implementation of environmental policy reforms. We employ a production model formulation with technology parameters defined as the functions of subsidies, as well as individual farm characteristics. Our estimates for two groups of farms â milk-producing and crop farms â show that introducing environmental regulations induced serious changes in the production technology and productivity of inputs, especially of land, labor and fertilizer. The overall effect of the subsidies on the production output has been found negative. At the same time, we find that farms do not use their resources optimally, which indicates some deficiencies in structural adjustments, primarily in the land and labor markets. |
| Keywords: | environmental regulations, productivity analysis, Swiss agriculture., Environmental Economics and Policy, Q120, D240, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91828&r=agr |
| By: | Omilola, Babatunde; Lambert, Melissa |
| Abstract: | At the national level, dozens of African countries have pledged to implement the Comprehensive Africa Agriculture Development Programme (CAADP) of the New Partnership for Africa's Development (NEPAD) and the African Union (AU). This African-led plan aims to stimulate agriculture on the continent to achieve the first Millennium Development Goal (MDG1) of halving poverty and hunger by 2015. To do so, countries are expected to pursue 6 percent average annual agriculture growth at the national level, allocate 10 percent of national budgets to the agricultural sector, and improve overall policy efficiency through peer-review and accountability. The purpose of this paper is to evaluate trends in agricultural development, performance, and spending in Africa and to track corresponding progress in key poverty and hunger indicators following the recent food price crisis. The reason for tracking this information is that the recent food price crisis has the potential to derail the progress made toward reducing poverty and hunger in many African countries. This paper draws on policy research results in the literature to highlight some of the strategic policy options available to African governments for accelerating agricultural growth in line with the principles of CAADP. In this regard, the paper provides information on CAADPs agenda by reviewing the progress of implementation and performance against a number of key benchmarks. |
| Keywords: | African agriculture, Comprehensive Africa Agriculture Development Programme (CAADP), expenditures, Food prices, Millennium Development Goals (MDG), trends, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:965&r=agr |
| By: | Kumbhar, Vijay |
| Abstract: | The issue of food security, especially in a developing nation like India, raises the twin problems of uncertain food production and unequal food distribution. The impact of unequal food distribution can have adverse effects on the rural and urban population living below the poverty line. Food insecurity is not only economic problem but also problem of non-humanity approach in India. There availability of the food grains is enough to satisfy their needs. According to the statistical data published by the ‘Food Corporation of India’ and the government of India foodgrain availability is 229 million tonnes in 2008-09 which is 230 million tonnes in previous year. While it is happening because, foodgrain traders are doing speculation practice and sealing them in high prices than fair prices. We may say that, Food insecurity is not only natural but also manmade |
| Keywords: | Supply ; Demand; Manmade |
| JEL: | Q18 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23661&r=agr |
| By: | Cairns, Alex; Meilke, K. D.; Benett, Nick |
| Abstract: | Since the inception of supply management in Canada during the 1970s, milk production quota has been used to regulate output and participation in the dairy industry. In recent years, milk quota values have increased dramatically, almost tripling in value since the mid-1980s. This led to the Dairy Farmers of Ontario intervening on the milk production quota exchange on two occasions: first, in November 2006 with a progressive transfer assessment and then in July 2009, replacing the former policy with a firm price ceiling â fixing the unit price of quota at $25,000. These policies represent a significant redistribution of economic benefits within the Ontario dairy community from milk producers approaching retirement and selling their quota to those remaining in the industry. The objective of this study is to first explore the reasons for the increase in production quota values; and second, to assess the welfare and distributional effects of each of the two quota policy schemes. Our results suggest that the increase in quota values were driven by basic economic factors expected to influence asset values and that the efficiency losses from intervention in the quota exchange are non-trivial. We conclude by suggesting there are several alternative policy options that could minimize efficiency losses while moderating the escalation in quota values. |
| Keywords: | milk, quota, policy, risk, supply, management, Agricultural and Food Policy, International Relations/Trade, Political Economy, |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:catpwp:91474&r=agr |
| By: | Bellemare, Marc F. |
| Abstract: | This article tests whether agricultural extension and imperfect supervision -- conflated here into the number of visits by a technical assistant -- increase productivity in a sample of contract farming arrangements between a processing rm and small agricultural producers in Madagascar. Production functions are estimated which treat the number of visits by a technical assistant as an input and which exploit the variation in the number of visits between the contracted crops grown on a given plot by a speci c grower, thereby accounting for district-, grower-, and plot-level unobserved heterogeneity. Results indicate that the elasticity of yield with respect to the number of visits lies between 1.3 and 1.7. |
| Keywords: | Supervision; Extension; Contract Farming; Grower-Processor Contracts |
| JEL: | O13 L24 Q12 O14 |
| Date: | 2010–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23788&r=agr |
| By: | Meinzen-Dick, Ruth; Quisumbing, Agnes; Behrman, Julia; Biermayr-Jenzano, Patricia; Wilde, Vicki; Noordeloos, Marco; Ragasa, Catherine; Beintema, Nienke |
| Abstract: | This paper makes a case for gender equity in the agricultural R&D system. It reviews the evidence on exactly why it is important to pay attention to gender issues in agriculture and why it is necessary to recognize womens distinct food-security roles throughout the entire value chainfor both food and nonfood crops, marketed and nonmarketed commodities. The authors examine whether women are factored into the work of research institutions, and whether research institutions effectively focus on womens needs. In short, are these institutions conducting research by and for women? The papers conceptual framework demonstrates the need to integrate gender into setting agricultural priorities; conducting the research itself; designing, implementing, and adopting extension services; and evaluating their impacts. It concludes with recommendations regarding how to make these suggested changes. |
| Keywords: | Agriculture, extension services, Gender equity, nonmarket commodities, Priority setting, R&D, value chains, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:973&r=agr |
| By: | Blandford, David; Gaasland, Ivar; VÃ¥rdal, Erling |
| Abstract: | As a result of substantial government support, Norway is more or less self-sufficient in its main agricultural products. This contributes to both trade distortions and higher greenhouse gas (GHG) emissions. In multinational negotiations separate efforts are being made to liberalize trade (through the World Trade Organization) and to reduce global GHG emissions (through the United Nations). Using a model of Norwegian agriculture, we explore interconnections between trade liberalization and GHG emission reductions. We show that the Doha proposals would involve no major cut in either agricultural production or GHG emissions due to weakness in the disciplines on trade distorting support. We contrast further trade liberalization and the use of a carbon tax to achieve emission reductions. Trade liberalization involves relatively large impacts on agricultural activity. Trade distortions decrease, and, economic welfare increases substantially due to lower production. For a high cost country like Norway, this indicates that the GHG abatement cost is negative in the sector if no value is attributed to agricultural activity beyond the world market price of food. A more targeted policy to reduce GHG emissions is to use a carbon tax. Compared to the trade liberalization case, both production and land use can be kept at a higher level with only a modest decrease in economic welfare. The side-effect is, however, higher trade distortions |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91729&r=agr |
| By: | MARTIN, Elsa; STAHN, Hubert |
| Abstract: | The point of departure of this work is the situation occurring in the Crau area (South-East of France). In this region, organic farmers use surface water for irrigation and excess water percolates into an aquifer that is used as a source for local residents. In contrast to the standard framework, agricultural production thus increases groundwater levels. In this paper, using a dynamic model, we derive the myopic and socially optimal food and water consumption paths. The first aim is to bring to the fore that an intervention is needed and that, in such a specific case, the environment can be protected thanks to some "good" production incentives. We then analyze the problem of coordination that can occur when two distinct local authorities - an agricultural and a water one, optimize food production and water use. In order to do so, we use an open-loop Nash game. We furthermore add into the picture environmental externalities linked with irrigation water flows that can generate amenities when they replenish wetlands or negative externalities when they induce floods. |
| Keywords: | externalities, agricultural policy, water policy, coordination of policies, Environmental Economics and Policy, H23, Q18, Q28., |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91811&r=agr |
| By: | Dewbre, Joshua |
| Abstract: | This paper uses data collected in an extensive survey of farm costs in the Dong Nai River Basin of Vietnam to estimate the parameters of production functions for rice, vegetables, and coffee. These estimates are then combined with price information to estimate marginal value products for irrigation, fertilizer, labor, and other farm inputs. Comparing marginal value products of the various inputs across crops and with factor prices suggests there may be potential for improving resource allocation and farm incomes. One novel contribution is the consideration of water and irrigation—a concern of considerable interest amidst rising water scarcity in the region. Most notably, the results indicate that fertilizer is the primary constraint to increased yields and farm income. Across all crops the marginal return to phosphorous, for example, ranges from 6,000–20,000 Vietnamese dong (VND) (US$1 = VND1, 800).Making similar comparisons with irrigation water suggests there is potential for improving resource allocation by diverting water from vegetables and coffee toward rice production. The marginal return to irrigation water for rice production is VND 2,500. For coffee and vegetables, marginal returns are negative. For vegetables, preliminary evidence suggests that all irrigation water is not created equal—groundwater and sprinkler irrigation systems have marginal physical products more than double that of traditional sources. |
| Keywords: | Dong Nai basin, farm input allocation, irrigation efficiency, translog production function, water allocation policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:984&r=agr |
| By: | Buckley, Cathal, Dr |
| Abstract: | Within the constraints of the EU Nitrates and Water Framework Directives, controlling and managing nutrient transfers to water from excessive nutrient use on agricultural land is a significant environmental policy challenge. This paper assesses whether there is room to reduce nitrogen and phosphorus applications by exploring the extent of their over application by land managers using data envelopment analysis methodology. This paper concentrates on specialist dairy and tillage farms stratified by land use potential as these agricultural systems are the most intensive and may pose the greatest risk in terms of managing nutrient transfer from agricultural land to water courses. Results demonstrate considerable inefficiency in the utilisation of nitrogen and phosphorus fertilisers across these systems. Average over application on dairy farms compared to efficient benchmark farms ranged from 25.9 to 33.3 kg Nitrogen ha-1 and 3.0 to 3.04 kg Phosphorus ha-1. Results for specialist tillage farms indicate over application of 21.2 kg N ha-1 and 3.3 kg P ha-1in 2008. Average, potential cost savings on chemical fertilisers across all systems on average ranged from â¬36 ha-1 to â¬50 ha-1. Additionally, potential cost savings on imported feeds of â¬68 to â¬113 per livestock units were indicated on dairy farms. Such reductions have the potential to deliver a double dividend by reducing the risk of nutrient leaching and diffuse pollution from agricultural land while improving economic margins at farm level. |
| Keywords: | Agribusiness, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91752&r=agr |
| By: | Madior Fall; Laurent Piet; Muriel Roger |
| Abstract: | .Knowledge and projection of farm numbers and the structure of their population is an important issue for agricultural economists and policy makers. Although Markov chain models have enjoyed decades of popularity in forecasting total farm numbers, they generally fail to provide a detailed insight of the farm population’s structure; to overcome this caveat we estimate a parametric distribution of the utilized agricultural area of French commercial farms. Our method provides detailed information on the structure of the population and accounts for the specificity of off-land farming. We also model the influence of variables such as the farm’s legal status, type of farming and farm holder’s age. The estimation leads to a relevant description of the entire population of professional farm. When compared with the 2005 Farm Structure Survey data, our simulations based on FADN data display a close match across a number of key variables. |
| Keywords: | farm structures, farm size distribution, maximum likelihood, simulation |
| JEL: | Q12 C13 C15 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201004&r=agr |
| By: | EZE, CHRISTOPHER C .; LEMCHI, J.I; UGOCHUKWU, A.I.; EZE, V .C.; AWULONU, C.A.O; OKON, A.X. |
| Abstract: | The study examined the agricultural financing policies of the government of Nigeria and effects on rural development .The study found that though the government has made serious efforts at making good agricultural policies through schemes, programmes and institutions, it has not been able to back them up with adequate budgetary allocation and financing coupled with corruption in the execution of the policies. It is recommended that for the government agricultural financing policies to achieve its target of rural development, Nigeria will need an adequate level of strategically targeted investment in agriculture, upgrade rural infrastructure, boost productivity, and increase competitiveness of the farm output, in addition to fighting corruption. |
| Keywords: | Agricultural financing, policies, institutions, rural, development, International Development, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91677&r=agr |
| By: | Sauer, Johannes; Walsh, John |
| Abstract: | The overall aim of this study is to empirically investigate the cost structure of a management agreement type agri-environmental instrument and to identify factors for cost variation over space and time. We control for the actual level of compliance by using compliance weighted average scheme cost ratios. Beside technological and economic performance measures, we also incorporate risk proxies. In addition, we consider unobserved heterogeneity or path dependency with respect to unknown administrative, spatial and farm specific factors. Hence, we try to disentangle random and fixed scheme cost effects by applying a bootstrapped mixed-effects regression approach using the empirical case of the Environmental Stewardship Scheme in the UK. Regional and sectoral variation in the scheme uptake and the cost of compliance for the participating farms lead to significant cost effects reflecting heterogeneity with respect to management skills and attitudes, production focus, location, technologies, economic performance and risk. |
| Keywords: | Ecosystem Services, Scheme Cost, Risk, Mixed-Effects Regression, Agricultural and Food Policy, Q18, Q57, Q58, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91731&r=agr |
| By: | Akramov, Kamiljon T.; Yu, Bingxin; Fan, Shenggen |
| Abstract: | This study explores the differences between mountain and non-mountain countries in food security and its determinants. Econometric analysis shows that mountain regions are likely to have lower food security. The findings suggest that people in mountain countries are especially affected by external shocks such as surges in global food prices. The results of regression decomposition indicate that the disparity in food availability we observed between mountain and non-mountain countries can be explained by differences in population size, income, road density, and governance factors as well as by a differential impact of external price shocks. The direct impacts of geographic and agroecological factors seem rather limited. |
| Keywords: | altitude, Developing countries, food security, global food prices, mountain regions, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:989&r=agr |
| By: | Hussein, Mohamud; Fearne, Andrew, Prof; Martinez, Marian Garcia, Dr; Di Falco, Salvatore, Dr |
| Abstract: | Food safety controls are currently enforced in the UK by a variety of regulatory approaches that considerably differ in their efficiency and effectiveness in achieving social goals of safe food supply and improved consumer confidence. Aim of this study is to establish whether a coregulatory enforcement of these controls is more cost-effective than the traditional commandand- control enforcement modes. First of its kind, the study reviewed a vast theoretical literature on economics of food safety and incentives to develop a conceptual framework and appropriate methodology for comparative cost-effectiveness analysis of co-regulatory approaches to food hygiene controls in the UK meat industry. A panel data on costs and compliance of 710 meat firms operating in the UK and Northern Ireland is collected analysed using fixed-effects model. Results of this analysis show that the co-regulatory approaches can be cost-effective when regulators are capable of devising incentive mechanism that encourages compliance. These findings call for a systematic evaluation of existing regulatory and market incentives to facilitate a more widespread consideration of co-regulation in the UK food industry and supply chains, particularly in sectors that do not presently lend themselves to co-regulation. The findings of the study have empirical implications for food policymakers, analysts and enforcement officers engaged in the analysis, development and implementation of strategies for improving food safety. |
| Keywords: | cost-effectiveness, co-regulation, food safety, incentives, panel data modelling., Food Consumption/Nutrition/Food Safety, C23, K32, Q18, Q28, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91725&r=agr |
| By: | Revoredo-Giha, Cesar; Kupiec-Teahan, Beata; Wrieden, Wendy; Davis, Victoria; Milne, Anne; Leat, Philip |
| Abstract: | This paper addresses consumersâ choices by looking into: current food choices made by different socio-economic groups; price barriers for diet improvement; and ways in which marketing may affect product choice. The study seeks: first, to analyze the differences in consumption of sausages of different nutritional composition among different socio-demographic and lifestage groups; and second, to measure whether it is possible to improve diet quality without affecting household expenditure. Sausages represent a relatively high proportion of red and processed meat purchases in Scotland, contributing significantly to the fat and sodium in the Scottish diet. The data used consisted of two-years of weekly information from a top-4, UK supermarket. The results suggest that it is possible to purchase similar quantities of a lower saturated fat or lower sodium sausage for the same price as a higher saturated fat or sodium sausage. However, it would cost more for some the groups to replace both a lower saturated fat and a lower sodium sausage in the householdâs food basket. |
| Keywords: | Scotland, saturated fats, sodium, consumer choices, sausages consumption, Food Consumption/Nutrition/Food Safety, D1, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91678&r=agr |
| By: | Hill, Ruth Vargas; Viceisza, Angelino |
| Abstract: | We conduct a framed field experiment in rural Ethiopia to test the seminal hypothesis that insurance provision induces farmers to take greater, yet profitable, risks. Farmers participated in a game protocol in which they were asked to make a simple decision: whether to purchase fertilizer, and if so, how many bags. The return to fertilizer was dependent on a stochastic weather draw made in each round of the game protocol. In later rounds of the game protocol, a random selection of farmers made this decision in the presence of a stylized weather-index insurance contract. Insurance was found to have some positive effect on fertilizer purchases. Purchases were also found to depend on the realization of the weather in the previous round. We explore the mechanisms of this relationship and find that it may be the result of both changes in wealth weather brings about and changes in perceptions of the costs and benefits of fertilizer purchases. |
| Keywords: | Fertilizer, field experiment, hypothesis, input response, Insurance, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:974&r=agr |
| By: | Dyer, George A.; Taylor, J. Edward |
| Abstract: | Assessing the human and environmental impacts of biofuels requires unraveling the connection between international trade, on one hand, and local land-use and social change, on the other, while accounting for cross-scalar linkages between and within social and environmental systems. We propose a disaggregated approach to model how macro shocks shape rural householdsâ decisions, and how these decisions integrate onto aggregate supply and landuse patterns. The approach, built on an agent-based model of rural Mexico, is used to explore the impacts of ethanol-driven US corn price increases. Our estimate of a 5.7% expansion in corn area by 2008 and wide variation across regions corresponds fairly well with ex post reports. Estimates from alternative models exceed ours by up to 200%. Corn land expanded between 1.6% in the southeast and 16% in the northwest. A 3% increase in agricultural value added nevertheless did not promote rural development, whether measured in terms of total rural value added or income. Direct and indirect (multiplier) effects on rural incomes were limited. Rural households experienced a 0.02% increase in real income, while absentee (non-rural) landholdersâ income increased 3.9%. Our approach highlights the crucial role of local market conditions and interactions among microeconomic actors in shaping biofuelsâ impacts via local feedback mechanisms. It suggests that subsistence activities might keep deforestation pressures in check in some developing areas while precluding the rural population from benefiting. A disaggregated approach should help integrate future research on land-use change and economics. |
| Keywords: | Crop Production/Industries, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91804&r=agr |
| By: | Sintori, A.; Tsiboukas, K. |
| Abstract: | Agricultural activity has been identified as a considerable source of Greenhouse Gas (GHG) emissions. Emissions from ruminant livestock farms are produced particularly due to CH4 emissions from enteric fermentation. Dairy sheep farming is the most important livestock production activity in Greece, characterized by a high degree of farm diversification. This paper addresses the issue of the evaluation of GHG emissions of Greek dairy sheep farms, through the use of a whole farm mathematical programming model that uses farm level data and optimizes total gross margin. Mathematical programming models are an appropriate tool, when addressing complex issues, such as GHG emissions. The analysis is undertaken on different farm types, instead of a representative farm, to account for the heterogeneity of the sheep farming activity. Thus, marginal abatement cost and appropriate mitigation strategies for diversified farms are determined. The results indicate that intensive farms cause few emissions per produced milk (2.7kg of CO2 eq). Also, the marginal abatement cost ranges among 51-64â¬/t for all types of sheep farms (at 20% abatement level). The model used in this analysis and the results it yields are useful to researchers and policy makers, who aim to design efficient mitigation measures. |
| Keywords: | Dairy sheep farming, linear programming, GHG emissions, abatement cost, Environmental Economics and Policy, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91812&r=agr |
| By: | Apata, T.G; Ogunyinka, A.I; Sanusi, R.A; Ogunwande, S |
| Abstract: | This paper presents an empirical analysis of the effects of global warming on Nigerian agriculture and estimation of the determinants of adaptation to climate change. Data used for this study are from both secondary and primary sources. The set of secondary sources of data helped to examine the coverage of the three scenarios (1971-1980; 1981-1990 and 1991-2000). The primary data set consists of 1500 respondentsâ but only 1250 cases were useful. This study analyzed determinants of farm-level climate adaptation measures using a Multinomial choice and stochastic-simulation model to investigate the effects of rapid climatic change on grain production and the human population in Nigeria. The model calculates the production, consumption and storage of grains under different climate scenarios over a 10-year scenery. In most scenarios, either an optimistic baseline annual increase of agricultural output of 1.85% or a more pessimistic appraisal of 0.75% was used. The rate of natural increase of the human population exclusive of excess hunger-related deaths was set at 1.65% per year. Results indicated that hunger-related deaths could double if grain productions do not keep pace with population growth in an unfavourable climatic environment. However, Climate change adaptations have significant impact on farm productivity. |
| Keywords: | Climate change, Adaptation, Economic consequences, Farm level productivity, Average Rainfall, Nigeria, Food Security and Poverty, D6, D91, E21, O13, Q01, Q2, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91751&r=agr |
| By: | Peterman, Amber; Behrman, Julia; Quisumbing, Agnes |
| Abstract: | This paper reviews existing microeconomic empirical literature on gender differences in use, access, and adoption of nonland agricultural inputs in developing countries. This review focuses on four key areas: (1) technological resources, (2) natural resources, (3) human resources, and (4) social and political capital. In general, there has been more empirical research on inorganic fertilizer, seed varieties, extension services, and group membership than on tools and mechanization, life-cycle effects, and political participation. Across input areas, generally men have higher input measures than women; however, this finding is often sensitive to the use of models that control for other background factors, as well as the type of gender indicator implemented in the analysis. We find few studies that meet our inclusion criteria outside Sub-Saharan Africa. Finally, future directions, opportunities, and recommendations for microeconomic gender analysis of nonland agricultural inputs are discussed. |
| Keywords: | access to farm inputs, Agricultural inputs, Agriculture, assets, Developing countries, Gender, life-cycle effects, mechanization, Women, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:975&r=agr |
| By: | Breisinger, Clemens; van Rheenen, Teunis; Ringler, Claudia; Nin Pratt, Alejandro; Minot, Nicholas; Aragon, Catherine; Yu, Bingxin; Ecker, Olivier; Zhu, Tingju |
| Keywords: | Agriculture, Economic development, food security, Growth, health, Middle East and Northern African (MENA) region, Policy reform, trade, water, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:985&r=agr |
| By: | Hernandez, Manuel; Torero, Maximo |
| Abstract: | This study examines the dynamic relationship between spot and futures prices of agricultural commodities. We first briefly discuss what the non-arbitrage and asset pricing theory has to say about the relationship between spot and futures markets. Next, using recent price data for corn, wheat, and soybeans, we perform Granger causality tests to empirically uncover the direction of information flows between spot and futures prices. Linear as well as nonlinear (nonparametric) causality tests are conducted on both spot and futures returns and their volatility. The results indicate that spot prices are generally discovered in futures markets. In particular, we find that changes in futures prices lead changes in spot prices more often than the reverse. These findings also contribute to the debate on alternative instruments to address excessive volatility in grain markets. Our results support, for example, the viability of implementing a global virtual reserve, recently proposed by von Braun and Torero (2008, 2009), to prevent disproportionate spikes in grain spot prices through signals and, if necessary, market assessment in the exchange of futures. |
| Keywords: | agricultural commodity markets, futures prices, granger causality, spot prices, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:988&r=agr |
| By: | Saunders, Caroline M.; Kaye-Blake, William; Campbell, Rachel |
| Abstract: | This paper takes the capital based approach to sustainability and applies this to examine the sustainability of different farming methods. The capital based approach argues that for future generations to be as well off as the present than the capital base should at least be maintained. The paper explores some of the issues around this approach such as the definition of capitals, their measurement and weakness in the approach which do not account for the resilience of system and/ or the substitutability of capitals. The paper outlines how this could be applied to agriculture and show sustainability across different farming methods. The data used is from the ARGOS (Agricultural Research Group on Sustainability) project which has collected data on social, economic and environmental factors from kiwifruit orchards green, green organic and gold, for five years. The results show little significant differences across orchard types. This may be due to the homogeneity of kiwifruit orchards and it is intended to expand this to the sheep sector to examine this further. |
| Keywords: | Agricultural and Food Policy, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91720&r=agr |
| By: | Sauer, Johannes; Wossink, Ada |
| Abstract: | We provide a new approach for assessing the cost of marginal ecosystem changes and the effectiveness of green payment schemes. The approach is based on a theoretical and empirical analysis of the bio-economic production interactions between marketed outputs and non-marketed ecosystem services at the micro level. To frame the economic nature of the problem, we employ a generalized joint production model in combination with cost minimization. The generalized joint production framework allows for the consideration of complementary, substitutive and competitive relationships between agricultural production and non-marketed ecosystem services generation and avoids double counting. From this theoretical model we distinguish three theoretical cases depending on the imposed minimum acceptable level of the non-marketed ecosystem services. We employ farm level panel data for the UK to empirically investigate these cases. More specifically, to represent and evaluate the production structure, we estimate first- and second-order elasticities derived from a flexible transformation function. Results show that the majority of farms produce agricultural output and ecosystem services in a complementary relationship. Generation of multiple ecosystem services on the same farm showed either a substitutive or competitive relationship. Changing the composition of the ecosystem services output would have very different implications for individual farms. |
| Keywords: | ecosystem services, green payments, bio-economic modelling, economies of scale and scope, program evaluation., Environmental Economics and Policy, Q18, Q57, Q58., |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91807&r=agr |
| By: | Fraser, Iain, Dr; Bitzios, Michael; Haddock-Fraser, Janet, Dr |
| Abstract: | In this paper we present the results of a Choice Experiment (CE) conducted to examine how the inclusion of an attribute for a functional ingredient affects consumer food choice. Specifically, we examine consumer attitudes towards bread and the inclusion of a functional ingredient (eg, inulin), which can be added to bread to increase the quantity and the effectiveness of fibre in the final product A novel feature of the design of this CE was the use of Means-End-Chain analysis via semi-structured interviews to reveal key attributes to be included in the CE. In addition, the CE included the Dutch Eating Behaviour Questionnaire (DEBQ) so as to collect information on all participants underlying eating behaviours. Preliminary analysis of the data reveals that bread type determines choice, and that the inclusion of a functional ingredient yielded relatively small measures of value. Also, the use of a Latent Class Model reveals that there are differences in willingness-to-pay (WTP) between groups of respondents and that group membership can be partly explained by the DEBQ information. The public health implications of these findings are discussed. |
| Keywords: | Functional Food, Bread, Choice Experiment, Food Consumption/Nutrition/Food Safety, I10, Q10, R22, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91755&r=agr |
| By: | Jambor, Attila; Harvey, David |
| Abstract: | The European Unionâs Common Agricultural Policy is continually evolving. The growing debate about the future of the EU Budget post 2013 raises major questions about the future of the CAP. A formal Communication on the future of the Common Agriculture Policy (CAP) after 2013 is due to be published by the Commission in the summer/early autumn of this year â in order to launch a full public debate on the issues, and as a part of the Budget Review of 2011. Formal legislative proposals on the post-2013 CAP will then follow in mid-2011 â together with Commission proposals for the post-2013 Financial Perspectives.  It is, therefore, appropriate to review the discussions of further reforms, and also to consider our professional capacity to provide robust analysis of potential futures. The debate on the future CAP is of more than an agricultural interest as it affects, inter alia, the environment, climate change, food quality and security and rural communities and their development. Numerous views have already been expressed on the future of the CAP. However there is very limited synthesis of the options and principles underlying their evolutionary fitness â that is, the extent to which suggestions correspond to the socio-economic environment and political climate upon which the future persistence of the CAP depends. This paper synthesises present views on the future of CAP, and outlines a possible conceptual framework for future research and analyses in the field. |
| Keywords: | Agricultural and Food Policy, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91719&r=agr |
| By: | Pratt, Alejandro Nin; Fan, Shenggen |
| Abstract: | This paper estimates required investment and its allocation among different regions to maximize agricultural output gains and poverty reduction. The analysis uses a social welfare function to simulate the optimal allocation of research and development (R&D) investment across developing regions (1) to maximize agricultural growth or (2) to maximize poverty reduction at the global level. Due to uncertainties of the parameters used, we conducted sensitivity analyses to evaluate the effect of different values of R&D and poverty elasticities on the optimal allocation of R&D investment across regions. Our simulation results are robust for a wide range of parameters and show that to maximize agricultural output growth in developing countries, R&D investment should be allocated mainly to Southeast Asia and South Asia, whereas to maximize poverty reduction, priority should be given to Sub-Saharan Africa and South Asia. |
| Keywords: | Agriculture, Growth, optimization, Poverty, R&D investment, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:986&r=agr |
| By: | Salois, Matthew J; Tiffin, Richard |
| Abstract: | The extant literature on fat taxes and thin subsidies tends to focus on the overall effectiveness of such fiscal instruments in altering diets and improving health. However, little is known about the welfare impacts of fiscal food policies on society. This paper fills a gap in the literature by assessing the distributional impacts and welfare effects resulting from a tax-subsidy combination on different food groups. Using the methods derived from marginal tax reform theory, a formal welfare economics framework is developed allowing the calculation of the distributional characteristics of various food groups and approximate welfare measures of prices changes caused by a tax-subsidy combination. The distributional characteristics reveal that many of the food groups target by a fat tax are consumed in greater concentration by low-income households than higher-income households. The overall welfare effect of a fat tax and thin subsidy combination is found to be negative, meaning that the thin subsidy is not enough to compensate for the negative impacts of the fat tax. |
| Keywords: | distributional characteristic, fat tax, obesity, thin subsidy, welfare., Health Economics and Policy, D30, D60, H20, I10, I30., |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91754&r=agr |
| By: | G. Mythili |
| Abstract: | This study estimates supply response for major crops during pre and post reform periods using Nerlovian adjustment cum adaptive expectation model. Estimation is based on dynamic panel data approach with pooled cross section - time series data across states for India.[WP-2006-009] |
| Keywords: | Supply Response, Indian Farmers, Reforms, Nerlovian adjustment, dynamic panel |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2633&r=agr |
| By: | Arndt, Channing; Pauw, Karl; Thurlow, James |
| Abstract: | Biofuels provide a new opportunity to enhance economic development in Tanzania. Drawing on detailed cost estimates, we develop a dynamic computable general equilibrium model to estimate the impact of different biofuel production scenarios on growth and poverty. Our results indicate that maximizing the poverty-reducing effects of a biofuels industry in Tanzania requires engaging and improving the productivity of smallholder farmers. Evidence shows that cassava-based ethanol production is more profitable than other feedstock options. Our findings also indicate that cassava generates higher levels of pro-poor growth than do sugarcane-based systems. However, if smallholder yields can be improved rather than expanding cultivated land, then sugarcane and cassava outgrower schemes can produce similar pro-poor outcomes. We conclude that in so far as the public investments needed to establish a biofuels industry in Tanzania are in accordance with national development plans, producing biofuels will contribute to achieving the countrys overall development objectives. |
| Keywords: | Biofuels, Cassava, Computable general equilibrium (CGE) model, Growth, Poverty, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:966&r=agr |
| By: | Pieroni, Luca; Lanari , Donatella; Salmasi, Luca |
| Abstract: | In this paper we examine the role of relative food prices in determining the recent increase in body weight in Italy. Cross-price elasticities of unhealthy and healthy foods estimated by a demand system provide a consistent framework to evaluate substitution effects, when a close association is assumed between unhealthy (healthy) foods and more (less) energy-dense foods. We used a dataset constructed from a series of cross-sections of the Italian Household Budget Survey (1997-2005) to obtain the variables of the demand system, which accounts for regional price variability. The relative increase of healthy food prices was found to produce nontrivial elasticities of substitution towards higher relative consumption of unhealthy foods, with effects on weight outcomes. In addition, these changes were unevenly distributed among individuals and were particularly significant for those who were poorer and had less education. |
| Keywords: | Household Survey Data; Healthy and Unhealthy Foods; Overweight and Obesity; Elasticity of Substitution |
| JEL: | D12 I18 I10 |
| Date: | 2010–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23744&r=agr |
| By: | Yano, Yuki; Blandford, David; Surry, Yves |
| Abstract: | The U.S. Renewable Fuel Standard program (RFS), which involves mandates for various biofuels, is complex and has been often misinterpreted or oversimplified in previous studies. In this paper we analyze the implications of the RFS for the U.S. domestic and international ethanol markets. We demonstrate the vital role of the advanced biofuel mandate within the RFS. Impacts of changes in tariffs on imported fuel ethanol and subsidies for U.S. domestic ethanol production are examined. One of our important findings is that the RFS could result in serious misallocation of resources in both a national and international context. There is a possibility that the United States could be required to import sugarcane-based ethanol to meet the advanced biofuel mandate, simultaneously exporting corn-based ethanol, while satisfying the national overall mandate. Since the provision of subsidies for domestic ethanol production can stimulate exports of corn-based ethanol, they are equivalent to export subsidies in this situation. The removal of tariffs can reduce the burden imposed on consumers in the United States from the operation of the RFS. Our analysis shows that it is extremely important to understand the potential impact of the RFS on agricultural and energy markets. |
| Keywords: | Ethanol, trade liberalization, Renewable Fuel Standard, mandate, subsidies, Industrial Organization, F13, Q18, Q42, Q48, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91832&r=agr |
| By: | Marnie Griffith |
| Abstract: | Conditions for the dairy industry in northern Victoria over the past decade have been tough. High prices for feed inputs, especially when combined with low farmgate milk prices, have seen situations where dairy farmers are losing money feeding cows. In this environment, it is natural to consider whether culling in response to drought followed by replacement as conditions return to normal would leave farmers better off. This working paper develops a methodology to quantitatively evaluate culling during drought conditions for the northern Victorian dairy industry. The methodology is applied to two recent years of drought, 2002 03 and 2007 08. While higher feed costs provide reason to cull, this is largely offset by lower cull prices and higher replacement heifer costs. Farmgate milk prices also play an important role. The methodology was extended to consider a two-year drought. It was found that duration of the drought has a potentially large impact on optimal culling response. |
| Keywords: | dairy system, optimal replacement, drought |
| JEL: | C61 Q15 Q25 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-200&r=agr |
| By: | Vosough Ahmadi, B; Dwyer, C.M.; Erhard, H.W.; Morgan-Davies, C; Waterhouse, A; Milne, C.E; Kupiec-Teahan, B; Ringrose, S; Goddard, P; Phillips, K; Stott, A. W |
| Abstract: | This study quantified interactions between animal welfare and farm profitability in British extensive sheep farming systems. Qualitative welfare assessment methodology was used to assess welfare from the animal's perspective in 20 commercial extensive sheep farms and to estimate labour demand for welfare, based on the assessed welfare scores using data collected from farm inventories. The estimated labour demand was then used as a coefficient in a linear program based model to establish the gross margin maximising farm management strategy for given farm situations, subject to constraints that reflected current resource limitations including labour supply. Regression analysis showed a significant relationship between the qualitative welfare assessment scores and labour supply on the inventoried farms but there was no significant relationship between current gross margin and assessed welfare scores. However, to meet the labour demand of the best welfare score, a reduction in flock size and in the average maximum farm gross margin was often required. These findings supported the hypothesis that trade-offs between animal welfare and farm profitability are necessary in providing maximum animal welfare via on-farm labour and sustainable British extensive sheep farming systems. |
| Keywords: | Sheep, Labour, Animal Welfare, Linear Programme, Livestock Production/Industries, C6, Q10, Q19, Q57, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91803&r=agr |
| By: | Mapa, Dennis S.; Han, Fatima C.; Estrada, Kristine Claire O. |
| Abstract: | The high level of hunger incidence in the country is perhaps one of the most pressing issues that need to be addressed by our policy makers. Official government statistics and data from self-rated hunger surveys show an increasing trend in hunger incidence among Filipino households. Data from National Statistical Coordination Board (NSCB) show that the percentage of subsistence poor in the country increased to 14.6 percent in 2006 from 13.5 percent in 2003. The Social Weather Stations (SWS) quarterly surveys on hunger incidence also show an increasing trend in the percentage of families that experienced hunger, reaching an alarming level of 24 percent in December 2009, representing about 4.4 million households. One probable cause of the increasing trend in hunger is the rising food prices akin to what the country experienced in 2008. This paper aims to determine the impact of food inflation and underemployment on hunger incidence in the Philippines, using the hunger incidence data from the SWS quarterly surveys on hunger. A vector autoregressive (VAR) model is used to determine the effect of a shock or increase to food inflation and underemployment on total involuntary hunger. Results from the model show that an increase in food prices at the current quarter will increase hunger incidence for a period of five quarters, starting with immediate quarter after the shock occurred. Shocks to underemployment will also increase hunger incidence but the effects last for only two quarters, also starting with immediate quarter after the shock. The results of this study provide relevant information that will be useful in crafting policies related to the Hunger Mitigation Program of the government. |
| Keywords: | hunger; food inflation; underemployment; vector autoregressive models |
| JEL: | C22 I32 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:23670&r=agr |
| By: | Ecker, Olivier; Breisinger, Clemens; McCool, Christen; Diao, Xinshen; Funes, Jose; You, Liangzhi; Yu, Bingxin |
| Abstract: | The lack of updated information about food security is of concern to many countries, especially during and after economic crises, natural disasters, and conflicts. In this paper we present an analytical framework for assessing the effects of such crises on food security. This methodology can compensate for the lack of recent data in the aftermath of various crisis situations and thus provide important information to policymakers. We apply this methodology to Yemen, a country where the recent food price crisis and global economic recession have been especially damaging. Little is known about how the recent triple crisis (food, fuel, and financial crisis) has affected food security and what the current state of food security is on the macro- (national) and microlevels (local). The results of our findings suggest an alarming state of food insecurity. Food security at the macrolevel has dramatically deteriorated in recent years, and it is projected that the country will remain highly vulnerable to external shocks in the future if no action is taken. At the household level we found that 32.1 percent of the population in Yemen is food insecure and that 57.9 percent of all children are malnourished. Rural-urban inequalities are high in Yemen. The number of food-insecure people living in rural areas (37.3 percent) is more than five times higher than in urban areas (17.7 percent). Underweight children and children with stunted growth are found more commonly in rural than urban areas. Major challenges for food security are the lack of job-creating growth within the oil-dependent economic structure; a distorted economic incentive system, coupled with an inefficient social transfer system rapidly depleting oil and water resources; and the growing production and consumption of qat. |
| Keywords: | food security, Middle East and Northern African (MENA) region, Poverty, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:982&r=agr |
| By: | Gulseven, Osman; Wohlgenant, Michael |
| Abstract: | This article introduces the Hedonic Metric (HM) approach as an original method to model the demand for differentiated products. Using this approach, initially we create an n-dimensional hedonic space based on the characteristic information available to consumers. Next, we allocate products into this space and estimate the elasticities using distances. What distinguishes our model from traditional demand models such as Almost Ideal Demand System (AIDS) and Rotterdam Model is the way we link elasticities with product characteristics. Moreover, our model significantly reduces the number of parameters to be estimated, thereby making it possible to estimate large number of differentiated products in a single demand system. We applied our model to estimate the retail demand for fluid milk products. We also compared our results with the Distance Metric (DM) approach of Rojas and Peterson (2008) using the estimation results from traditional models as a benchmark point. Our approach is shown to give superior results and better approximations to original models. |
| Keywords: | Hedonic Metrics, Distance Metrics, Rotterdam Model, Almost Ideal Demand System, Differentiated Products, Milk Demand., Food Security and Poverty, C30, C80, Q11, Q13, Q18, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91675&r=agr |
| By: | BanoviÄ, Marija; Cristina Monteiro, Ana; Lemos, José Pedro Cardoso; Madalena Barreira, Maria; Fontes, Magda Aguiar |
| Abstract: | The consumer has the final word in food choice, which is determined by his perceived quality. Within a project coordinated by the Faculty of Veterinary Medicine we tried to relate objective quality with the consumer quality evaluation. To do so, we have measured the expected and experienced quality of a sample of Portuguese consumers towards three types of beef (PDO, national and imported) at the shop, and compared this subjective evaluation with the beef objective quality. Results at the consumer level show that respondents perceived PDO beef to be of higher quality than the two other types of beef for different attributes and for overall quality at the shop location. In terms of objective quality results, the three types of beef showed highly similar physicochemical characteristics and there were no differences, on average, in terms of the aspects mostly considered by the consumers - tenderness, colour and fat content. Hence, it was not possible to show that physicochemical characteristics are good predictors of consumer preferences. However shear force revealed a positive asymmetry showing a higher probability to find a tender beef in PDO than in the other types of beef. This should constitute an area for further research. |
| Keywords: | PDO beef, perceived quality, objective quality, Food Consumption/Nutrition/Food Safety, Q130, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91680&r=agr |
| By: | Frank van Tongeren; Anne-Célia Disdier; Joanna Komorowska; Stéphane Marette; Martin von Lampe |
| Abstract: | This report applies a cost-benefit analysis to quantify the economic effects of non-tariff measures in the agri-food sector. Three case studies are presented to demonstrate how such analysis can help identify least-cost solutions of Non-Trade Measures (NTMs) designed to ensure that imported products meet domestic requirements. The present analysis examines benefits and costs for the different domestic and foreign stakeholders involved, thus taking a broader view that goes beyond evaluating the trade impact alone. |
| Keywords: | international trade, trade policy, non-tariff measures, food safety, plant health |
| JEL: | D61 F13 L51 Q17 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:oec:agraaa:28-en&r=agr |
| By: | Shaun K. Roache |
| Abstract: | The macroeconomic effects of large food price swings can be broad and far-reaching, including the balance of payments of importers and exporters, budgets, inflation, and poverty. For market participants and policymakers, managing low frequency volatility—i.e., the component of volatility that persists for longer than one harvest year—may be more challenging as uncertainty regarding its persistence is likely to be higher. This paper measures the low frequency volatility of food commodity spot prices using the spline- GARCH approach. It finds that low frequency volatility is positively correlated across different commodities, suggesting an important role for common factors. It also identifies a number of determinants of low frequency volatility, two of which—the variation in U.S. inflation and the U.S. dollar exchange rate—explain a relatively large part of the rise in volatility since the mid-1990s. |
| Date: | 2010–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/129&r=agr |
| By: | Bouët, Antoine; Laborde Debucquet, David; Dienesch, Elisa; Elliot, Kimberly |
| Abstract: | This paper examines the potential benefits and costs of providing duty-free, quota-free (DFQF) market access to the least developed countries and the effects of extending eligibility for DFQF access to other small and poor countries. Using the MIRAGE computable general equilibrium model, the paper assesses the impact of scenarios involving different levels of coverage for products, recipient countries, and preference-giving countries on participating countries, as well as competing developing countries that are excluded. The main goals of this paper are to highlight the role that rich and emerging countries could play in helping poor countries to improve their trade performance, to assess the distribution of costs and benefits for developing countries, and to determine whether the potential costs for domestic producers are in line with political feasibility in preference-giving countries. |
| Keywords: | CGE Modeling, duty-free market access, preference erosion, technical barriers to trade, Trade policy, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:990&r=agr |
| By: | Bakucs, Zoltan; Falkowski, Jan; FertÅ, Imre |
| Abstract: | In this paper we test the retail milk price integration between two countries, Poland and Hungary. Conventional linear cointegration methods do not reveal any relationship between the two prices, therefore we apply Gonzalo and Pitakaris (2006) method to test the linear cointegration null against the threshold cointegration with an exogenous threshold variable alternative hypothesis. Our results show, that the Hungarian Forint â Polish Zloty exchange rate is econometrically an appropriate threshold variable, the linearity null is rejected, and the two alternative regimes may be characterised with different long-run equilibrium relationships. Corresponding trade data however questions the economic appropriateness of the selected threshold variable. Further research is needed to analyse the actual effective milk trade flows between the two countries, subject to exchange rate variations. |
| Keywords: | horizontal integration, milk market, threshold cointegration, Food Security and Poverty, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91809&r=agr |
| By: | Paul, Catherine J. Morrison; Sauer, Johannes |
| Abstract: | This contribution is based on the notion that different technologies are present in an industry. These different technologies result in differential âdriversâ of economic performance depending on the kind of technology used by the individual firm. In a first step different technologies are empirically distinguished. Subsequently, the associated production patterns are approximated and the respective change over time is estimated. A latent class modelling approach is used to distinguish different technologies for a representative sample of E.U. dairy producers as an industry exhibiting significant structural changes and differences in production systems in the past decades. The production technology is modelled and evaluated by using the flexible functional form of a transformation function and measures of first- and second-order elasticities. We find that overall (average) measures do not well reflect individual firmsâ production patterns if the technology of an industry is heterogeneous. If there is more than one type of production frontier embodied in the data, it should be recognized that different firms may exhibit very different output or input intensities and changes associated with different production systems. In particular, in the context of localized technical change, firms with different technologies can be expected to show different technical change patterns, both in terms of overall magnitudes and associated relative output and input mix changes. Assuming a homogenous technology would result in inefficient policy recommendations leading to suboptimal industry outcomes. |
| Keywords: | Heterogenous Technologies, Transformation Function, Localized Technical Change, Production Economics, Q12, O33, C35, |
| Date: | 2010–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc10:91749&r=agr |