New Economics Papers
on Agricultural Economics
Issue of 2010‒08‒28
eight papers chosen by

  1. Evaluation of The Necessary of Agriculture Public Expenditure for Poverty Reduction and Food Security in Benin By Labintan, Adeniyi Constant
  2. The Welfare Impacts of Commodity Price Fluctuations: Evidence from Rural Ethiopia By Bellemare, Marc F.; Barrett, Christopher B.; Just, David R.
  3. Pulling Agricultural Innovation and the Market Together By Kimberly Elliott
  4. Estimating households' willingness to pay By Rachel Griffith; Lars Nesheim
  5. Modeling the Volatility in Global Fertilizer Prices By Chen, P.-Y.; Chang, C-L.; Chen, C-C.; McAleer, M.J.
  6. Financing Food Assistance: Options for the World Food Programme to Save Lives and Dollars By Vijaya Ramachandran, Benjamin Leo, and Owen McCarthy
  7. Are Borders Barriers? The Impact of International and Internal Ethnic Borders on Agricultural Markets in West Africa By Jenny C. Aker, Michael W. Klein, Stephen A. O’Connell and Muzhe Yang
  8. When Fair Trade increases unfairness: The case of quinoa from Bolivia By Aurélie Carimentrand; Jérôme Ballet

  1. By: Labintan, Adeniyi Constant
    Abstract: Benin is predominantly an agricultural country which accounted for 39% of GDP with 70% economically active population in the agricultural sector, that year. Small, independent farmers produce 90% of agricultural output, but only about 17% of the total area is cultivated, much of it in the form of collective farms since 1975. Benin with subtropical climate have enough water resources and land facilities to growth and be one power agriculture country but the sector is plagued may many problem such as lack of infrastructure, poor utilization of rural credit, and inefficient and insufficient use of fertilizer, insecticides, and seeds. Those problems have a big effect on agriculture income and rural household income and the high poverty rate.This is contract between resources potentiality and poor living condition. However the manly source of those problems maybe the lack on public expenditure in this sector. The purpose of this research is to evaluate how the low public expenditure has impact on the agriculture growth and poverty rate. To evaluate that, we first made a theory approach of the impact of agriculture growth and poverty reduction by presentation the model of model elaborate by KAWALI and son in 2006 to evaluate the contribution of public expenditure to achieve MDG b agriculture grows. The application of this model on Benin agriculture show Benin need the annual Agriculture expenditure required for 2004-2015 is 356 Million USD( 8,1% agriculture growth per year) with the conservative scenario beside 301 Million USD (7,1% agriculture growth per year) with optimistic scenario. However the analysis of agriculture public expenditure in Benin is very low( lower than 10% of the GDP) and the public expenditure general is lower than 25% of GDP (lower than 25% that is recommend by best practice) and the high rate is in military not in growthing sector. This lack of sufficient public agriculture expenditure is felt at upriver and backing of the agriculture sector. This is justifying by the agriculture production surplus management problem in this year. This is du to inability of crops stocking, crops conservation system lack and crops distribution system lack due to (infrastructure lack) and insufficient investment lack. The importance of public expenditure is become more and more a crucial problem and news policies should be elaborated and focus in major parties of public expenditure in economic growth sector that is agriculture in Benin because with climate change negative effect the situation will be more degradation and rural poor population will be increase faster.
    Keywords: Keys words: Agriculture- Public Expenditure-Poverty Reduction-Benin
    JEL: E62 C33 C60 Q10
    Date: 2010–08–16
  2. By: Bellemare, Marc F.; Barrett, Christopher B.; Just, David R.
    Abstract: Many governments try to stabilize commodity prices based on the widespread belief that households value price stability and that the poor especially benefit from food price stabilization. We derive an exact measure of multivariate price risk aversion and of associated household willingness to pay for price stabilization across multiple commodities. Using data from a panel of Ethiopian households, we estimate that the average household would be willing to pay 6-32 percent of its income to eliminate fluctuations in the prices of the seven primary food commodities. But not everyone benefits from price stabilization. Contrary to conventional wisdom, the welfare gains from eliminating price fluctuations would be concentrated in the upper 40 percent of the income distribution, making food price stabilization a distributionally regressive policy in this context.
    Keywords: Price Fluctuations; Price Stabilization; Price Risk; Risk and Uncertainty
    JEL: D13 E64 D80 Q12 O12
    Date: 2010–08–16
  3. By: Kimberly Elliott
    Abstract: Feeding an additional three billion people over the next four decades, along with providing food security for another one billion people that are currently hungry or malnourished, is a huge challenge. Meeting those goals in a context of land and water scarcity, climate change, and declining crop yields will require another giant leap in agricultural innovation. The aim of this paper is to stimulate a dialogue on what new approaches might be needed to meet these needs and how innovative funding mechanisms could play a role. In particular, could “pull mechanisms,” where donors stimulate demand for new technologies, be a useful complement to traditional “push mechanisms,” where donors provide funding to increase the supply of research and development (R&D). With a pull mechanism, donors seek to engage the private sector, which is almost entirely absent today in developing country R&D for agriculture, and they pay only when specified outcomes are delivered and adopted.
    Keywords: agriculture, pull mechanisms, food security, hunger, innovaction
    Date: 2010–06
  4. By: Rachel Griffith (Institute for Fiscal Studies and University College London); Lars Nesheim (Institute for Fiscal Studies)
    Abstract: <p><p>The recent literature has brought together the characteristics model of utility and classic revealed preference arguments to learn about consumers' willingness to pay. We incorporate market pricing equilibrium conditions into this setting. This allows us to use observed purchase prices and quantities on a large basket of products to learn about individual household's willingness to pay for characteristics, while maintaining a high degree of flexibility and also avoiding the biases that arise from inappropriate aggregation.</p> </p><p><p>We illustrate the approach using scanner data on food purchases to estimate bounds on willingness to pay for the organic characteristic. We combine these estimates with information on households' stated preferences and beliefs to show that on average quality is the most important factor affecting bounds on household willingness to pay for organic, with health concerns coming second, and environmental concerns lagging far behind. </p></p>
    Date: 2010–08
  5. By: Chen, P.-Y.; Chang, C-L.; Chen, C-C.; McAleer, M.J.
    Abstract: The main purpose of this paper is to estimate the volatility in global fertilizer prices. The endogenous structural breakpoint unit root test and alternative volatility models, including the generalized autoregressive conditional heteroskedasticity (GARCH) model, Exponential GARCH (EGARCH) model, and GJR model are estimated for six global fertilizer prices and the crude oil price. Weekly data for 2003-2008 for the seven price series are analysed. The empirical results suggest that the volatility of global fertilizer prices and crude oil price from March to December 2008 are higher than in other periods, and that the peak crude oil price caused greater volatility in the crude oil price and global fertilizer prices.
    Keywords: volatility;global fertilizer price;crude oil price;non-renewable fertilizers;structural breakpoint unit root test
    Date: 2010–08–16
  6. By: Vijaya Ramachandran, Benjamin Leo, and Owen McCarthy
    Abstract: The World Food Programme has world-class logistics, but its ability to manage financial risk is extremely limited. The WFP procures 100 percent of its food through spot markets, which subjects it to substantial commodity and transport price risks and significant delays delivering food. Relying on reactive emergency appeals and on donors that tend to earmark contributions and make commitments one year at a time only adds to operational inflexibility and uncertainty. On the other hand, much of the WFP’s operations are fairly predictable, especially the countries served and the volume of food delivered. The Programme should consider implementing a targeted hedging pilot strategy focused on several chronically food vulnerable countries. Several risk-management instruments are available, such as physical call options, forward contracts, and futures contracts. Key benefits of such hedging strategies would include greater financial predictability, the potential for improved delivery times, and increased local and regional trade that could build on the WFP’s Purchase for Progress initiative. Changes from donors would also help the WFP shore up its operations. Greater commitments of untied cash donations from the United States and other major donors can provide the WFP significant operational flexibility to execute prudent financial management operations. Donor contributions to the proposed Food Security Trust Fund at the World Bank would further support WFP hedging operations. This fund could provide a financial guarantee or modest credit line which would enable the WFP to enter into commodity derivative contracts for up to one year in the future.
    Keywords: World Food Programme, food assistance, poverty, hunger, growth, development
    Date: 2010–04
  7. By: Jenny C. Aker, Michael W. Klein, Stephen A. O’Connell and Muzhe Yang
    Abstract: This paper addresses two important economic issues for Africa: the contribution of national borders and ethnicity to market segmentation and integration between and within countries. Market pair regression analysis provides evidence of higher conditional price dispersion for both a grain and a cash crop between markets separated by the Niger-Nigeria border than between two markets located in the same country. A regressiondiscontinuity analysis also confirms a significant price change at the international border. The international border effect is lower, however, if the cross-border markets share a common ethnicity. Ethnicity is also linked to higher price dispersion within Niger; we find a significant intranational border effect between markets in different ethnic regions of the country. This suggests that ethnic similarities diminishing international border effects could enhance international market integration, and ethnic differences could contribute to intranational market segmentation in sub-Saharan Africa. We provide suggestive evidence that the primary mechanism behind the internal border effect is related to the role of ethnicity in facilitating access to credit in agricultural markets. We argue that the results are not driven by differences in price volatility or observables across borders.
    Keywords: Africa, border effects, agriculture, regression discontinuity design
    JEL: O1 Q1
    Date: 2010–04
  8. By: Aurélie Carimentrand; Jérôme Ballet (Fonds pour la Recherche en Ethique Economique)
    Abstract: Fair Trade movement tackles the question of global justice. It is experiencing growing success. Fair Trade therefore sorts the beneficiaries, usually by means of certification. Numerous impact studies have assessed the beneficial effects of Fair Trade on the intended beneficiaries. Several studies have nevertheless called into question both the impact of certification and Fair trade. Following these studies this paper shows that Fair Trade in quinoa (Chenopodium quinoa Willd.) is actually increasing inequalities between Bolivian producers.
    Keywords: FairTrade, Inequalities, Quinoa, Bolivia
    JEL: Q17
    Date: 2010

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