nep-agr New Economics Papers
on Agricultural Economics
Issue of 2010‒09‒03
thirteen papers chosen by
Angelo Zago
University of Verona

  1. Risk Preferences as Determinants of Soil Conservation Decisions in Ethiopia By Teklewold, Hailemariam; Köhlin, Gunnar
  2. Competitiveness, Productivity and Efficiency in the Agricultural and Agri-Food Sectors By Laure Latruffe
  3. Demand Growth in Developing Countries By David Abler
  4. How do governments respond to food price spikes ? lessons from the past By Anderson, Kym; Nelgen, Signe
  5. The Benefits from Agricultural Research and Development, Innovation, and Productivity Growth By Julian M. Alston
  6. Participation in Off-Farm Employment, Rainfall Patterns, and Rate of Time Preferences: The Case of Ethiopia By Bezabih, Mintewab; Gebreegziabher, Zenebe; GebreMedhin, Liyousew; Köhlin, Gunnar
  7. Is Agricultural Production Becoming More or Less Sensitive to Extreme Heat? Evidence from U.S. Corn and Soybean Yields By Michael J. Roberts; Wolfram Schlenker
  8. Carbon Footprint Labeling Activities in the East Asia Summit Region: Spillover Effects to Less Developed Countries By Xunpeng SHI
  9. How Costly is Welfare Stigma? Separating Psychological Costs from Time Costs By Colleen Flaherty Manchester; Kevin J. Mumford
  10. Milking The Prices: The Role of Asymmetries in the Price Transmission Mechanism for Milk Products in Austria By Octavio Fernández-Amador; Josef Baumgartner; Jesús Crespo-Cuaresma
  11. Fair Trade-Organic Coffee Cooperatives, Migration, and Secondary Schooling in Southern Mexico By Seth R. Gitter; Jeremy G. Weber; Bradford L. Barham; Mercedez Callenes; Jessa M. Lewis
  12. Urban Fuel Demand in Ethiopia: An Almost-Ideal Demand System Approach By Gebreegziabher, Zenebe; Oskam, Arie J.; Bayou, Demeke
  13. Modelling the Asymmetric Volatility in Hog Prices in Taiwan: The Impact of Joining the WTO By Chang, C-L.; Huang, B-W.; Chen, M.-G.

  1. By: Teklewold, Hailemariam; Köhlin, Gunnar
    Abstract: Soil degradation is one of the most serious environmental problems in the highlands of Ethiopia. The prevalence of traditional agricultural land use and the absence of appropriate resource management often result in the degradation of natural soil fertility. This has important implications for soil productivity, household food security, and poverty. Given the extreme vulnerability of farmers in this area, we hypothesized that farmers’ risk preferences might affect the sustainability of resource use. This study presents experimental results on the willingness of farmers to take risks and relates the subjective risk preferences to actual soil conservation decisions. The study looks at a random sample of 143 households with 597 farming plots. We found that a high degree of risk aversion significantly decreases the probability of adopting soil conservation. This implies that reducing farmers’ risk exposure could promote soil conservation practices and thus more sustainable natural resource management. This might be achieved by improving tenure security, promoting access to extension services and education, and developing off-farm activities that generate income.
    Keywords: adoption, Ethiopia, risk preference, soil conservation
    JEL: Q12 Q16 Q24 D81
    Date: 2010–08–23
  2. By: Laure Latruffe
    Abstract: This report reviews the literature on competitiveness, productivity and efficiency in the agricultural and agri-food sectors. It clarifies concepts and terminology used in this area, and provides a critical assessment of approaches and indicators used in the literature to measure competitiveness, productivity and efficiency at sectoral and farm levels. It also discusses recent findings on productivity growth, changes in relative competitiveness between sub-sectors and countries, and determinants of competitiveness, in addition to identifying the major knowledge gaps. This report suggests that more attention should be paid to the agri-food sector, non-price factors of competitiveness, and the impact of government intervention on competitiveness.
    Keywords: productivity growth, agriculture, agri-food sector, comparative advantage, Competitiveness indicators, domestic resource costs, farm productivity, determinants of competitiveness
    Date: 2010–08
  3. By: David Abler
    Abstract: This report prepared by a consultant, Dr. David Abler of Penn State University in the United States, examines structural changes in the demand for agricultural products arising from economic growth in a number of large developing and emerging economies comprising primarily the BRIIC group of countries (Brazil, Russia, India, Indonesia and China). It reviews and evaluates a number of studies made of the effects of economic growth in large developing and emerging economies on agricultural product demand and the structure of demand. In particular, the report seeks to evaluate the effects of economic growth and rising incomes on the composition of agricultural product demand across product categories (e.g. cereals vs. meat), within product categories (e.g. lower-quality cereals vs. higher-quality cereals) and on the evolution of price and income elasticities of demand for agricultural products - that is, how rapidly are they moving toward the low elasticities seen in many OECD countries. The report also utilises the results of these studies to draw out the possible implications for agricultural commodity demand, commodity prices, and possible price volatility.
    Keywords: economic growth, agricultural food demand, price and income elasticities of demand, food quality, demand attributes, agricultural commodity prices, price volatility
    Date: 2010–07
  4. By: Anderson, Kym; Nelgen, Signe
    Abstract: Food prices in international markets spiked upward in 2008, doubling or more in a matter of months. Evidence is still being compiled on policy responses over the following two years, but lessons can be learned from the price spike in 1973, the magnitude and speed of which were similar to those experienced around the 2008 spike. In developing countries, policy responses to the earlier spike lowered the (negative) nominal assistance coefficient for agriculture by one-third between 1972 and 1974 before it was returned to the same level by 1976. That was twice the extent of the fall and recovery of the (positive) nominal assistance coefficient for high-income countries. However, the trade and welfare effects of those changes were much less for developing than high-income countries, suggesting the dispersion of distortion rates among farm industries decreased in developing countries. The adjustments were virtually all due to suspension and then reinstatement of import restrictions, with changes in export taxation by developing countries playing an additional (but minor) role during 1972-74. This beggar-thy-neighbor dimension of each government’s food policies is worrying because it reduces the role that trade between nations can play in bringing stability to the world’s food markets. More effort appears to be needed before a multilateral agreement to desist can be reached.
    Keywords: Emerging Markets,Markets and Market Access,Economic Theory&Research,Climate Change Economics,Food&Beverage Industry
    Date: 2010–08–01
  5. By: Julian M. Alston
    Abstract: This report contains a review of the literature on the role of agricultural research and development in fostering innovation and productivity in agriculture. The review seeks to clarify concepts and terminology used in the area, provide a critical assessment of approaches found in the literature, report main results, and draw inferences. A key finding is that the social rate of return to investments in agricultural R&D has been generally high. Specific findings differ depending on methods and modelling assumptions, particularly assumptions concerning the research lag distribution, the nature of the research-induced technological change, and the nature of the markets for the affected commodities.
    Keywords: productivity growth, innovation, Agricultural R&D, agricultural productivity
    Date: 2010–08
  6. By: Bezabih, Mintewab; Gebreegziabher, Zenebe; GebreMedhin, Liyousew; Köhlin, Gunnar
    Abstract: Devoting time to off-farm activities, while complementing agricultural incomes, may be constrained by labor availability and financial capacity. This paper assesses the importance of rainfall patterns, which condition the availability of agricultural labor, and financial constraints on off-farm employment decisions. Using panel data from Ethiopia, which include experimental rate-of-time preference measures, we found that these and rainfall are significant determinants off-farm employment. Rural development policies should take into account the financial capacity of households and the role of off-farm opportunities as safety nets in the face of weather uncertainty.
    Keywords: off-farm employment, rainfall variability, reduced availability of water, rate-of time-preferences, multinomial logit, Ethiopia
    JEL: Q13 D81 C35 C93
    Date: 2010–08–23
  7. By: Michael J. Roberts; Wolfram Schlenker
    Abstract: Extreme heat is the single best predictor of corn and soybean yields in the United States. While average yields have risen continuously since World War II, we find no evidence that relative tolerance to extreme heat has improved between 1950 and 2005. Climate change forecasts project a sharp increase in extreme heat by the end of the century, with the potential to significantly reduce yields under current technologies.
    JEL: Q1
    Date: 2010–08
  8. By: Xunpeng SHI (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: Abstract: This paper discusses carbon footprint (CFP) labeling activities in the East Asia Summit (EAS) region with a focus on their spillover effects on less developed countries (LDCs). Due to increased and increasing economic integration, implementation of CFP labeling schemes in one country will have significant impact on others. The impact is particularly significant for LDCs in the EAS region because: the EAS production networks are highly integrated, which provide necessary condition for the spill-over effects to be generated; LDCs generally lack the capacity to measure and label CFP of their products; and exports from LDCs often produced by relatively small producers. However, the effective inclusion of LDCs in labeling schemes may offer more and cost-effective opportunities for carbon emission reductions. The presence of spillover effects means that countries that are implementing carbon labeling schemes need to take stakeholders outside of their boundaries into consideration. The disadvantages of LDCs can be reduced by well designed carbon labeling schemes, by innovative solutions to low cost data collection and certification, and by technical transfer, training and capacity building.
    Date: 2010–07–01
  9. By: Colleen Flaherty Manchester; Kevin J. Mumford
    Abstract: This paper empirically decomposes the costs of welfare participation using a model of labor supply and participation in multiple welfare programs. Prior estimates of the cost of welfare participation have not differentiated psychological costs, or stigma, from the effort required to become eligible and maintain eligibility (time costs). The relative size of these two costs has implications for policy. We find that psychological costs are at least as large as the time costs associated with participation in food assistance programs. In addition, we find that the incidence of psychological costs is inconsistent with these costs acting as an effective screening mechanism.
    Keywords: Program Participation, Welfare Stigma, Labor Supply, Structural Estimation
    Date: 2010–01
  10. By: Octavio Fernández-Amador; Josef Baumgartner; Jesús Crespo-Cuaresma
    Abstract: We assess empirically the vertical price transmission mechanism between producer and consumer prices of milk products in Austria using monthly data for the period from January 1996 to February 2010. We consider explicitly the existence of asymmetries in the adjustment to the long-run equilibrium using two different types of threshold vector error correction (VEC) models, where an inaction band in the adjustment to the long-run relationship is defined and alternatively where price dynamics differ between periods of increasing and decreasing trends in causal prices. Our results indicate that asymmetries play an important role in the pass-through of prices for milk products in Austria. We provide statistical evidence concerning the fact that the adjustment only tends to take place when deviations from the equilibrium are large enough. Milk, dairy and cheese products and butter tend to remain in positive margins (measured as deviations from the long-run equilibrium) for the retailers' side. The explicit modeling of nonlinearities does not improve out-of-sample forecasting performance.
    Keywords: Asymmetric price transmission, threshold models, cointegration, milk prices.
    JEL: C32 L11 Q13
    Date: 2010–07
  11. By: Seth R. Gitter (Department of Economics, Towson University); Jeremy G. Weber (University of Wisconsin-Madison); Bradford L. Barham (University of Wisconsin-Madison); Mercedez Callenes (Grupo de Analisis para el Desarrollo (GRADE), Peru); Jessa M. Lewis (University of Wisconsin-Madison)
    Abstract: From 1995 to 2005 educational attainment of youth in rural Southern Mexico rose dramatically. Three distinct trends emerged in the region that could explain the rise in education. First, thousands of coffee-producing households joined cooperatives that have entered Fair Trade relationships and/or began adopting organic practices. Then, beginning in approximately 2000, US migration took off, while intra-Mexico migration steadily increased, providing remittance income and more lucrative alternatives in labor markets outside of coffee production. Third, Progresa/Oportunidades, a conditional cash transfer program aimed at promoting education, became available to families in the region in 1998 and 1999. Using survey data from 845 coffee farming households in Oaxaca and Chiapas, Mexico, this paper explores how participation in Fair Trade-organic cooperatives coffee price premiums, migration, and Progresa/Oportunidades shape education attainment for young adults (16-25). Results from a household fixed-effects model show that participating in a Fair Trade-organic cooperative contributed to a one-half year increase in schooling for girls over the study period. The impacts of US migration opportunities appear to have even stronger positive impacts on years of schooling for females, while for males increased migration opportunities tend to diminish the positive effects of being in a Fair Trade- organic cooperative on educational attainment.
    Keywords: Latin America, Mexico, Fair Trade, Organic, Migration, Education.
    JEL: N56 I20 F22
    Date: 2010–08
  12. By: Gebreegziabher, Zenebe; Oskam, Arie J.; Bayou, Demeke
    Abstract: This paper investigates the opportunities for reducing the pressure of urban centers on rural forest areas, using a dataset of 350 urban households in Tigrai in northern Ethiopia. We applied an almost-ideal demand system to fuels. Because the same fuels were not always used by households, the analysis started with a probit model of fuel use. The inverse Mills ratios derived from it were inserted into the estimation of the fuel demand system to obtain a full set of price and income elasticities. The results suggest that reducing the pressure of urban centers on local forests cannot be seen in isolation from broader development policies aimed at raising the level of education and income of the population. Higher income also stimulates the demand for fuel.
    Keywords: price elasticities, income elasticities, almost-ideal fuel demand system, reducing deforestation, Ethiopia
    JEL: O13 O18 Q23
    Date: 2010–08–23
  13. By: Chang, C-L.; Huang, B-W.; Chen, M.-G.
    Abstract: Prices in the hog industry in Taiwan are determined according to an auction system. There are significant differences in hog prices before, during and after joining the World Trade Organization (WTO). The paper models growth rates and volatility in daily hog prices in Taiwan from 23 March 1999 to 30 June 2007, which enables an analysis of the effects of joining the WTO. The empirical results have significant implications for risk management and policy in the agricultural industry. The three sub-samples for the periods before, during and after joining the WTO display significantly different volatility persistence of symmetry, asymmetry and leverage, respectively.
    Keywords: hog prices;joining the WTO;conditional volatility models;asymmetry;leverage;moment conditions
    Date: 2010–07–28

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