nep-agr New Economics Papers
on Agricultural Economics
Issue of 2010‒10‒09
twelve papers chosen by
Angelo Zago
University of Verona

  1. Policy Responses in Emerging Economies to International Agricultural Commodity Price Surges By Darryl Jones; Andrzej Kwiecinski
  2. Adoption of certified organic technologies: The case of coffee farming in Colombia By Marcela Ibáñez
  3. A Competing Risk Model for Health and Food Insecurity in the West Bank By Cavatorta, Elisa; Pieroni, Luca
  4. Modeling the Effect of Oil Price on Global Fertilizer Prices By Chen, P.-Y.; Chang, C-L.; Chen, C-C.; McAleer, M.J.
  5. Obesity under affluence varies by welfare regimes: The effect of fast food, insecurity, and inequality.. By Offer, Avner; Pechey, Rachel; Ulijaszek, Stanley
  6. Effects of Family, Friends, and Relative Prices on Fruit and Vegetable Consumption by African American Youths By Oleksandr Zhylyevskyy; Helen H. Jensen; Steven B. Garasky; Carolyn E. Cutrona; Frederick X. Gibbons
  7. Production and Marketing Activities of the Agricultural Co-operatives Association in Aomori Prefecture between the l870s and l920s By Izumi Shirai
  8. Who crops coca and why? The case of Colombian farmers By Marcela Ibáñez
  9. Millers, Commission Agents and Collusion in Grain Auction Markets: Evidence From Basmati Auctions in North India By A. Banerji
  10. The Impact of Connectivity on Market Interlinkages; Evidence from Rural Punjab By Mahvish Shami
  11. Non Linear Contracting and Endogenous Buyer Power between Manufacturers and Retailers: Empirical Evidence on Food Retailing in France By Bonnet, Céline; Dubois, Pierre
  12. Impact of Protection on Forest Quality at Pench Tiger Reserve By M Mahajan; R Sengupta; R B P Singh

  1. By: Darryl Jones; Andrzej Kwiecinski
    Abstract: This report examines and classifies policy responses in ten major emerging economies to the rise in international agricultural commodity prices in 2006-08. It also analyses impacts of these responses on the domestic market to evaluate their effectiveness in meeting stated policy objectives. The report separates government responses into four major types: market interventions to limit the rise in food prices, market interventions to control inflation, assistance to consumers through safety nets and support to producers. As an indication of the relative importance of these responses in a given country, the report estimates the fiscal costs of policies applied. Developments in trade flows, price transmission, inflation, consumption and production were used to investigate impacts on domestic markets and to draw policy conclusions. Market interventions to minimise the impact on consumers were not always successful, even if trade flows were disrupted, and had taxing effects on farmers who could not benefit from higher international prices. These taxing effects were often partly compensated by increased input-linked support to farmers, which had a relatively high fiscal cost in some instances.
    Keywords: emerging economies, food price spikes, policy responses to food price rise, policy conclusions
    JEL: I38 J33 O10 O13 O57 Q10 Q13 Q17 Q18
    Date: 2010–10–01
  2. By: Marcela Ibáñez (Georg-August-University Göttingen)
    Abstract: Agricultural production is an important source of income and employment for developing countries, yet it is the cause of serious environmental problems. Though ECO-labels appear as a promising alternative to control the negative effects of agriculture on the environment and to increase the income of rural poor, the proportion of agricultural land and exports certified as is quite small. We investigate the factors that affect the adoption of certified organic coffee in Colombia and in particular study the effect of economic incentives on adoption. We find that those who have lower cost of adoption are more likely to be certified as organic. Correcting for sample selection, we find that certified organic production is 40% less productive and 31% less costly than non-certified production. Given the price premium in 2007, certified organic production is 15% less profitable than non-organic production. We find that in order to make organic production attractive, the price premium of certified organic coffee should be about 5 times higher than in 2007.
    Keywords: Technology adoption; Switching regression models; Organic Coffee; Colombia useful
    Date: 2010–08–13
  3. By: Cavatorta, Elisa; Pieroni, Luca
    Abstract: This paper explores the interactions between the risk of food insecurity and the decision to health insure in the Palestinian Territories. The risk of adverse health conditions is insurable; the risk of food insecurity is a background risk and no market insurance exists. The vulnerability to food insecurity influences the individual utility from health insuring. We present a competing risk model to reveal this interdependence. We specify the empirical model as a bivariate probit model and evaluate the impact of food insecurity on the household decision to health insure. We find evidence of significant complementarity between the risk of food insecurity and the propensity to health insure. The predicted conditional probabilities reveal that the propensity to health insure is higher in presence of food insecurity among Palestinian households. This study shows that, in presence of a background risk, there are complementarities among risks that policy should be mindful of.
    Keywords: Food insecurity; Health insurance; Competing risks; Bivariate Probit
    JEL: I11 O15 C35
    Date: 2010–09–07
  4. By: Chen, P.-Y.; Chang, C-L.; Chen, C-C.; McAleer, M.J.
    Abstract: The main purpose of this paper is to evaluate the effect of crude oil price on global fertilizer prices in both the mean and volatility. The endogenous structural breakpoint unit root test, the autoregressive distributed lag (ARDL) model, and alternative volatility models, including the generalized autoregressive conditional heteroskedasticity (GARCH) model, Exponential GARCH (EGARCH) model, and GJR model, are used to investigate the relationship between crude oil price and six global fertilizer prices. Weekly data for 2003-2008 for the seven price series are analyzed. The empirical results from ARDL show that most fertilizer prices are significantly affected by the crude oil price, which explains why global fertilizer prices reached a peak in 2008. We also find that 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. As volatility invokes financial risk, the relationship between oil price and global fertilizer prices and their associated volatility is important for public policy relating to the development of optimal energy use, global agricultural production, and financial integration.
    Keywords: volatility;global fertilizer price;crude oil price;non-renewable fertilizers;structural breakpoint unit root test
    Date: 2010–09–28
  5. By: Offer, Avner; Pechey, Rachel; Ulijaszek, Stanley
    Abstract: Among affluent countries, those with market-liberal welfare regimes (which are also English-speaking) tend to have the highest prevalence of obesity. The impact of cheap, accessible high-energy food is often invoked in explanation. An alternative approach is that overeating is a response to stress, and that competition, uncertainty and inequality make market-liberal societies more stressful. This ecological regression meta-study pools 96 body-weight surveys from 11 countries c. 1994-2004. The fast-food ‘shock’ impact is found to work most strongly in market liberal countries. Economic insecurity, measured in several different ways, was almost twice as powerful, while the impact of inequality was weak, and went in the opposite direction.
    Date: 2010–07
  6. By: Oleksandr Zhylyevskyy; Helen H. Jensen (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC)); Steven B. Garasky; Carolyn E. Cutrona; Frederick X. Gibbons
    Abstract: Facilitating healthy eating among young people, particularly among minorities who are at high risk for gaining excess weight, is at the forefront of the current policy discussions in the U.S. We investigate the effects of social interactions and relative prices on fruit and vegetable consumption by African American youths. We estimate a simultaneous equation ordered probit model of food intake using rich behavioral data from the Family and Community Health Study and price data from the Economic Research Service’s Quarterly Food-at-Home Price Database. We find the presence of endogenous effects between a youth and parent, but not between a youth and friend. Lower relative prices of fruits and vegetables tend to increase intakes. Results suggest that health interventions targeting only one family member may be a cost-effective way to increase fruit and vegetable intake by African Americans because of the existence of “spillover†consumption effects between the youths and their parents.
    Keywords: endogenous effects, fruit and vegetable consumption, healthy food choices, simultaneous equation ordered probit model, social interactions. JEL Codes: I12, J15, C35
    Date: 2010–09
  7. By: Izumi Shirai (Graduate School of Economics, Osaka University)
    Abstract: This article analyzed the production and marketing activities of the Agricultural Co-operatives Association established in Takedate Village in the Tsugaru district of Aomori Prefecture in 1907. In the early stages of the Meiji period, this area was considered as backward in terms of commodity production and circulation. However, the Agricultural Co-operatives Association, Takedate-kumiai had been highly evaluated for its business marketing across the nation, and had built a brand name for itself. Takedate-kumiai was the cutting-edge case of the industrial associations which is supposed to have spread out in earnest in the 1930s. We obtained the followings results. (1) By means of production inspection before packaging, the association made an effort toward not only the production of high-quality apples but also their trusted shipment in accordance with the brand name and standards established for itself. All these were extremely advanced efforts in agricultural commodity transactions. (2) However, until the early 1910s, the business sales of the association encountered certain problems. One problem was that the association partners had illegally sold apples to merchants and therefore, could not gather enough apples to sell. Another problem was that the specification wholesalers in the great city did not make all their payments smoothly. While being such status, the association thought much of the trust and the autonomy at the partners and the wholesales. It supported without laying down compulsion and a penalty regulation. (3) The problems mentioned in the above point were solved in the latter half of 1910s. The association received special awarding in 1916 and became flagrant nationwide and succeeded in establishing a brand name image. The partners recognized that apples sold on behalf of the association should be done so at favorable prices. As the associationfs apples became famous in the markets of consuming regions, wholesalers came to recognize special wholesale contracts with this association as an honor. Consequently, the association grew to be an economic organization that took the initiative in product sales to wholesalers even in important cities such as Tokyo.
    Keywords: Japanese Economic History, Agricultural Co-operatives Association, Brand, Marketing, Market
    JEL: N55 N75 N85
    Date: 2010–09
  8. By: Marcela Ibáñez (Georg-August-University Göttingen)
    Abstract: Approximately 1.2% of Colombia’s GNP is spent every year on the war on drugs, but very little is known about coca farming decisions at the household level. In order to understand the decision to cultivate coca as well as that of the amount of land to use for its cultivation, we develop an extended version of the portfolio model of crime that considers the effects of behavioral norms and lack of options in the legal economy. The model is tested using data from an original survey with coca and non-coca farmers living in Putumayo, Colombia. We find that farmers react to economic incentives and hence eradication and substitution programs reduce coca cultivation. More interestingly, we find that coca cultivation decisions are explained by moral considerations as well as by the impossibility of making a living from legal forms of agriculture.
    Keywords: Coca; Colombia; Portfolio Model of Crime; Norms of Behavior
    JEL: D81 G11 K42 Z12 Z13
    Date: 2010–08–13
  9. By: A. Banerji
    Abstract: This paper undertakes structural estimation of asymmetric auction models in a market for basmati, and detects the presence of a cartel consisting of a large (in market share) local miller and commission agents purchasing for large distant millers. The contracts between the distant millers and their commission agents help to explain the specific form that collusion takes. Simulations indicate that (i) the cartel gains considerably by colluding, over the competitive outcome; (ii) however, sellers (farmers) do not lose significantly under collusion when the commission agents bid; (iii) a knowledgeable auctioneer would choose much higher starting prices for auctions when commission agents bid, compared with the observed starting prices. The paper also shows that efficient collusion, the form of collusion commonly assumed in the literature, does not explain the data well. [Working Paper No. 129]
    Keywords: Auctions, Cartels, Agricultural Markets
    Date: 2010
  10. By: Mahvish Shami (Institute of Food and Resource Economics, University of Copenhagen)
    Abstract: Up to the late 1980s it was generally accepted that many of the key issues in agrarian development could not be studied without an understanding that rural markets were interlinked, causing equilibria to be jointly determined. In recent years, however, theory on market interlinkages has disappeared from mainstream agrarian development literature. Based on a household-level survey conducted in rural Pakistan, this paper seeks to re-introduce the importance of interlinkages and to illustrate the exploitative potential this market structure can have for poor peasants, particularly in unequal isolated villages where the landlord is essentially a monopolist/monopsonist. A proposed solution is then to connect villages to the external economy so as to increase peasants’ alternative options. Making use of a natural experiment found in the construction of a motorway, the study finds that while connectivity does not break interlinkages completely - as they do have the functional effect of lowering transaction costs - it does significantly alter the nature of the relationship between landlords and the rural poor in favour of the latter, and in particular to the advantage of the socially lower classes.
    Keywords: Interlinked markets, Rural road networks, Pakistan
    JEL: R2 Q13
    Date: 2010–09
  11. By: Bonnet, Céline; Dubois, Pierre
    Abstract: We present the first empirical estimation of a structural model taking into account explicitly the endogenous buyer power of downstream players facing two part tariffs contracts offered by the upstream level. We consider vertical contracts between manufacturers and retailers where resale price maintenance may be used with two part tariffs and allow retailers to have some endogenous buyer power from the horizontal competition of manufacturers. Our contribution allows to recover price-cost margins at the upstream and downstream levels in these different structural models using the industry structure and estimates of demand parameters. We apply it to the market of bottled water in France, estimating a mixed logit demand model on individual level data. Empirical evidence shows that two part tariffs contracts are used with no resale price maintenance and that the buyer power of supermarket chains is endogenous to the structure of manufacturers competition.
    Keywords: competition; differentiated products; double marginalization; endogenous buyer power; manufacturers; mixed logit; non nested tests; retailers; two part tariffs; vertical contracts; water
    JEL: C12 C33 L13 L81
    Date: 2010–09
  12. By: M Mahajan; R Sengupta; R B P Singh
    Abstract: This paper reports the results of a study undertaken by PSI in the autumn of 2002 to assess the impact of protection on the quality of the forest in the Pench Tiger Reserve in Madhya Pradesh.
    Keywords: Madhya Pradesh, forest, tiger, pench, India, biodiversity
    Date: 2010

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