nep-agr New Economics Papers
on Agricultural Economics
Issue of 2010‒10‒30
eighteen papers chosen by
Angelo Zago
University of Verona

  1. Finance of Modern Economic Growth - The Historical Role of Agricultural Resources By Ashoka Mody
  2. Effect of Transaction Costs on Seller Decisions among Small-Holder Cassava Farmers in South-Eastern Nigeria By Okoye, B.C; Onyenweaku, C.E; Ukoha, O.O
  3. Modernization of Agriculture and Long-Term Growth By Yang, Dennis; Zhu, Xiaodong
  4. Effects of Credit Constraints on Productivity and Rural Household Income in China By Fengxia Dong; Jing Lu; Allen Featherstone
  5. Is There Surplus Labor in Rural India? By Mark R. Rosenzweig; Andrew D. Foster
  6. Needs, Modes and Efficiency of Economic Organizations and Public Interventions in Agriculture By Bachev, Hrabrin
  7. Analysing Bioenergy and Land Use Competition in a Coupled Modelling System: The Role of Bioenergy in Renewable Energy Policy in Germany By Ruth Delzeit; Horst Gömann; Karin Holm-Müller; Peter Kreins; Bettina Kretschmer; Julia Münch; Sonja Peterson
  8. The Art of Exceptions: Sensitive Products in the Doha Negotiations By Christophe Gouel; Cristina Mitaritonna; Maria Priscila Ramos
  9. An Ordered Probit Model Analysis of Transaction Costs and Market Participation by Small-Holder Cassava Farmers in South-Eastern Nigeria. By Okoye, B.C; Onyenweaku, C.E; Ukoha, O.O
  10. Analysis of the Determinants of Total Factor Productivity among Small-Holder Cassava Farmers in Ohafia L.G.A of Abia State. By Ukoha, O.O; Okoye, B.C; Emetu, J
  11. The Decline and Rise of Agricultural Productivity in Sub-Saharan Africa Since 1961 By Steven Block
  12. Food Prices and Overweight Patterns in Italy By Luca Pieroni; Donatella Lanari; Luca Salmasi
  13. Land Use Regulation as a Barrier to Entry: Evidence from the Texas Lodging Industry By Junichi Suzuki
  14. Does Agricultural Trade Liberalization Help The Poor in Tunisia? A Micro-Macro View in A Dynamic General Equilibrium Context By Nadia Belhaj Hassine; Veronique Robichaud; Bernard Decaluwé
  15. Convergence in Agriculture: Evidence from the regions of an Enlarged EU By Alexiadis, Stilianos; Kokkidis, Stilianos
  16. Adapting to Climate Change An Integrated Biophysical and Economic Assessment for Mozambique By Arndt, Channing; Strzepeck, Kenneth; Tarp, Finn; Thurlow, James; Fant, Charles; Wright, Len
  17. Parker, Wine Spectator and Retail Prices of Bordeaux Wines in Switzerland: Results from Panel Data 1995 - 2000 By Peter Kugler
  18. Agro-Ecosystem Services – Governance Needs and Efficiency By Bachev, Hrabrin

  1. By: Ashoka Mody
    Abstract: The importance of an 'agricultural surplus' for the structural transformation accompanying economic growth is often stressed in development literature. 'Agricultural surplus', defined as the physical marketed surplus of food and raw materials, has an evident role in the expansion of non-farm employment. [Working Paper No. 121]
    Keywords: agriculture, surplus, structural, economic, food, raw materials, employment
    Date: 2010
  2. By: Okoye, B.C; Onyenweaku, C.E; Ukoha, O.O
    Abstract: A linear probability model (LPM) analysis of seller decisions selling cassava on-farm (farm-gate) or off-farm (market) was derived and estimated consistent with a sample 216 farm households. Variables of proportional transaction costs have different effects on off-farm and on-farm market participation decisions. The seller type decision revealed that coefficients for have a personal means of transport, road conditions to the nearest town and marketing experience were positive and significantly related to increase in off-farm cassava sellers at 5% level of probability. The coefficient for distance from the house to the farm was negatively and significantly related to increase in farmers selling off-farm at 1% level of probability. The coefficients for crop transportation costs, distance to the nearest town, distance from the house to the farm and yield were negative and significant at 5% level of probability. These decisions to participate as an off-farm or on-farm seller were as a result of proportional transaction costs associated with participating in the market. It was found that unexpected transaction costs inhibit farm households from selling off-farm. The results therefore calls for policies aimed at infrastructural development especially on roads and establishment of bulking centers to mitigate transportation costs.
    Keywords: Transaction Costs; Seller Decisions and Cassava Farmers
    JEL: D23 D21 D2
    Date: 2010–08–10
  3. By: Yang, Dennis (Chinese University of Hong Kong); Zhu, Xiaodong (University of Toronto)
    Abstract: This paper develops a two-sector model that illuminates the role played by agricultural modernization in the transition from stagnation to growth. When agriculture relies on traditional technology, industrial development reduces the relative price of industrial products, but has a limited effect on per capita income because most labor has to remain in farming. Growth is not sustainable until this relative price drops below a certain threshold, thus inducing farmers to adopt modern technology that employs industry-supplied inputs. Once agricultural modernization begins, per capita income emerges from stasis and accelerates toward modern growth. Our calibrated model is largely consistent with the set of historical data we have compiled on the English economy, accounting well for the growth experience of England encompassing the Industrial Revolution.
    Keywords: long-term growth, transition mechanisms, relative price, agricultural modernization, structural transformation, Industrial Revolution, England
    JEL: O41 O33 N13
    Date: 2010–10
  4. By: Fengxia Dong (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Jing Lu; Allen Featherstone
    Abstract: Agricultural production is strongly conditioned by the fact that inputs are transformed into outputs with considerable time lags, causing the rural household to balance its budget during the season when there are high expenditures for input purchases and consumption and few revenues. With limited access to credit, the budget balance within the year can become a constraint to agricultural production. As is the case in many developing countries, Chinese rural households have been suffering from a lack of access to capital. While China is one of the biggest countries in terms of rural areas and agricultural production, few studies have focused on the impact of credit on agriculture in China. Using survey data, this study aims to examine how credit constraints currently affect agricultural productivity and rural household income in China. The study findings suggest that under credit constraints, production inputs, along with farmers’ capabilities and education, cannot be fully employed. By removing credit constraints, agricultural productivity and rural household income can be improved.
    Keywords: credit constraint, household income, productivity, rural China.
    Date: 2010–10
  5. By: Mark R. Rosenzweig (Department of Economics, Yale University); Andrew D. Foster (Department of Economics, Brown University)
    Abstract: We show empirically using panel data at the plot and farm level and based on a model incorporating supervision costs, risk, credit-market imperfections and scale-economies associated with mechanization that small-scale farming is inefficient in India. Larger farms are more profitable per acre, more mechanized, less constrained in input use after bad shocks, and employ less per-acre labor than small farms. Based on our structural estimates of the effects of farm size on labor use and the distribution of Indian landholdings, we estimate that over 20% of the Indian agricultural labor force is surplus if minimum farm scale is 20 acres.
    Keywords: agriculture, India, scale, profits, labor, tractors
    JEL: O13 O16 O53
    Date: 2010–10
  6. By: Bachev, Hrabrin
    Abstract: There has been a fundamental development in theory and understanding of market, private, collective and public organizations in recent years. This paper incorporates achievements of the interdisciplinary New Institutional and Transaction Costs Economics (combining Economics, Organization, Law, Sociology, Behavioral and Political Sciences) and suggests a framework for assessing the needs and efficiency of economic organizations and public interventions in agriculture. Our new approach includes: study of farm and other agrarian organizations as a governing rather than production structure; assessment of comparative efficiency of alternative market, contract, internal, and hybrid modes of governance; analysis of level of transaction costs and their institutional (distribution and enforcement of de-facto rights between individuals, groups, organizations), behavioral (agents preferences, ability, bounded rationality, tendency for opportunism, risk aversion, trust), dimensional (frequency, uncertainty, assets specificity, and appropriability of transactions), natural, and technological factors; determination of effective horizontal and vertical boundaries of farms and other agrarian organizations; specification of the economic role of government and the needs for public interventions in agrarian sector; assessment of comparative of alternative forms of public involvement in agrarian sector (partnership, regulation, taxation, assistance, provision, in house organization, fundamental property rights modernization). The paper provides new powerful tools for understanding the agrarian organizations and their efficiency, and for improvement of public policies, collective actions, farming and business strategies, and academic analyses in that important sector of social life.
    Keywords: market; private and public modes of governance; efficiency of farms and agrarian organizations; agricultural policies; transaction costs; New Institutional Economics
    JEL: D86 L11 H41 H44 L14 H11 L38 Q13 Q15 L33 D73 L25 D81 D02 Q01 Q12 Q18 D23 L22
    Date: 2010–10
  7. By: Ruth Delzeit; Horst Gömann; Karin Holm-Müller; Peter Kreins; Bettina Kretschmer; Julia Münch; Sonja Peterson
    Abstract: In the context of energy security and climate protection, biomass is given high importance. Nevertheless, land-use conflicts resulting from the cultivation of biomass and their economy-wide effects are yet to be fully understood. To shed light on this issue we link three distinctive models; a global, multi-regional general equilibrium model (DART), a regionalised agricultural sector model for Germany (RAUMIS) and a location model for biogas plants. The DART model allows capturing international and national feedback effects of an increased use of bioenergy such as increased agricultural prices. The interaction of DART and RAUMIS links global markets and connects them to the detailed specification of agricultural land use in Germany. Finally, we link this system to the newly developed location model ReSI-M that accounts for the location choices of biogas plants in Germany and the resulting regional markets for energy crop demand. As a first application of the modelling system we analyse the effects of the German Renewable Energy Source Act on German biogas production and of the EU 10%-biofuel target on German agriculture and world agricultural prices. A main result of the simulations is that accounting for existing land-use restrictions and land-use competition has a significant effect on model results
    Keywords: Bioenergy, land use, renewable energy policy, coupled models, agricultural-sector models, CGE
    JEL: C61 C68 Q15 Q42 Q48
    Date: 2010–10
  8. By: Christophe Gouel; Cristina Mitaritonna; Maria Priscila Ramos
    Abstract: It is necessary for multilateral trade negotiations to include exceptions to accommodate politically sensitive sectors. However, given the highly concentrated distribution of agricultural protection, too many exceptions put at risk the objectives of World Trade Organization. This paper assesses the delicate balance required, based on the case of agricultural trade protection in Europe and Japan, two countries where tariff dismantling in the agricultural sector is a particularly sensitive issue. Since agricultural border protection is heterogeneous, we avoid aggregation bias by extending a multi-country computable general equilibrium model to the product level. This allows us to combine the assets from general equilibrium and partial equilibrium modeling, and to take explicit account of interdependencies and trade policies. The results suggest that consideration of sensitive products strongly limits the potential gains from a possible agriculture agreement at Doha. Moreover, there is no aggregate trade-off between decreasing tariffs and increasing/opening quotas. To achieve “substantial” market access improvements in the agricultural sector, the objective should be most favored nation tariff reduction.
    Keywords: Agricultural trade; Doha Development Agenda; CGE model, disaggregation; sensitive products; tariff-rate quotas
    JEL: C68 F13 F17 Q17 Q18
    Date: 2010–10
  9. By: Okoye, B.C; Onyenweaku, C.E; Ukoha, O.O
    Abstract: The Ordered Probit model analysis procedure was applied to determine the factors (related to fixed and variable transaction costs) influencing the decision to participate in cassava markets by a sample of 360 smallholder farmers in South-Eastern Nigeria. Participation decisions revealed that membership of cooperatives or social organizations, farming experience and marketing experience had a positive relationship with decision to be autarkic other than buyer and seller other than autarkic and significant at 1.0% level of probability. The coefficients for frequency of extension contacts, age, native of community, road conditions to the nearest town and yield were also positive and significantly related to decision to be autarkic other than buyer and seller other than autarkic at 5% level of probability. The coefficient for access to communication facilities was positive and significantly related to decision to remain autarkic other than buyer and seller other than autarkic. The coefficients for education, distance to the nearest town, distance from the farm to the market and crop transportation were negative and significantly related with the decision to remain autarkic other than a seller and buyer other than autarkic at 1% level of probability. The coefficient for gender was positive and significantly related to decision by female farmers to be autarkic other than buyer and seller other than autarkic. These decisions to participate as a buyer, seller or remain autarkic were as a result of fixed and proportional transaction costs associated with participating in the market.
    Keywords: Ordered Probit; Transaction Costs; Market Participation and Cassava
    JEL: D23 D21 D2
    Date: 2010–08–18
  10. By: Ukoha, O.O; Okoye, B.C; Emetu, J
    Abstract: The study analysed the determinants of total factor productivity by the use of OLS regression technique among small-holder cassava farmers in Ohafia Local Government Area of Abia State. The study data was collected through a multi-stage random sampling technique from 90 farmers in 2009. The coefficients for education and extension were negative and significantly related to total factor productivity (TFP) at 10%level of probability. The coefficients for age, fertilizer and access to credit were positive and significant at 1% level of probability. The coefficients for gender and household size were negative and significant at 1% level of probability. The results calls for policies aimed at provision of inputs especially fertilizer and credit targeted mostly on women farmers. Policies on increased education and extension contacts and birth control should be advocated for
    Keywords: Total Factor Productivity and Cassava
    JEL: D2 D29 D24
    Date: 2010–07–14
  11. By: Steven Block
    Abstract: Agricultural productivity growth in sub-Saharan Africa has been a qualified success. Total factor productivity growth has increased rapidly since the early 1980s. By the early 2000s, average annual TFP growth was roughly four times faster than it had been 25 years earlier. This period of accelerated growth, however, followed nearly 20 years of declining rates of TFP growth subsequent to independence in the early 1960s. Average agricultural TFP growth for sub-Saharan Africa was 0.14% per year during 1960 – 84, and increased to 1.24% per year from 1985 – 2002. The average over this period was approximately 0.6% per year, which accounts for 36% of the increase in total crop output over this period. These highly aggregated results conceal substantial regional and country-level variation. Expenditures on agricultural R&D, along with the reform of macroeconomic and sectoral policies shaping agricultural incentives, have played a substantial role in explaining both the decline and the rise in agricultural productivity. The case study of Ghana clearly reflects these broader findings.
    JEL: O13 O4 Q16
    Date: 2010–10
  12. By: Luca Pieroni; Donatella Lanari; Luca Salmasi
    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 I10 I18
    Date: 2010–10–20
  13. By: Junichi Suzuki
    Abstract: This paper examines the anticompetitive effects of land use regulation using microdata on mid-scale chain hotels in Texas. I construct a dynamic entry-exit model that endogenizes hotel chains\' reactions to land use regulation. Estimation results indicate that imposing stringent regulation increases costs considerably. Hotel chains nonetheless enter highly regulated markets even if entry probabilities are lower, anticipating fewer rivals and hence greater market power. Consumers incur the costs of regulation indirectly in the form of high prices.
    Keywords: Land use regulation; firms\' entry; lodging industry;
    JEL: R3 L1 L5
    Date: 2010–10–21
  14. By: Nadia Belhaj Hassine (Economic Research Forum (ERF)); Veronique Robichaud; Bernard Decaluwé
    Abstract: This paper is an attempt to contribute to the research on poverty-alleviation potential of trade, by exploring the poverty effects of agricultural trade liberalization in Tunisia. Specifically, the study uses a small open economy computable general equilibrium (CGE) that includes technology transfer and endogenous productivity effects from trade openness in agriculture to investigate whether the trade reforms benefit the poor and whether agricultural productivity growth boosts the potential gains from trade. The structure of the paper is as follows. Section 2 outlines the plan for empirical investigation and presents the procedure to measure total factor productivity. Section 3 describes the CGE model and explains how the link between productivity and trade policy is incorporated. Section 4 presents some features of the Tunisian economy, in particular with regard to the agricultural sector and reviews the data used in the econometric and CGE models. Section 5 reports the empirical results and section 6 synthesizes the main findings and draws some conclusions.
    Date: 2010–10
  15. By: Alexiadis, Stilianos; Kokkidis, Stilianos
    Abstract: Regional convergence has spurred one of the most debatable topics in contemporary research in economics and one of the most critical issues from a policy perspective. In this paper, the intention is to augment the literature on regional convergence in Europe using the agricultural sector as a context for empirical analysis. More specifically, following the spirit of the literature, we seek in this paper to address the question of whether, during the period 1995-2004 the NUTS-2 regions of EU-25 exhibited any tendencies to converge in terms of agricultural labour productivity. A low annual rate of absolute convergence is estimated over the period 1995-2004 whilst it is established that the regions of European Union follow two different patterns in their convergence behaviour
    Keywords: Club Convergence; Agriculture; European Union Regions
    JEL: O47 C2 Q10
    Date: 2010
  16. By: Arndt, Channing; Strzepeck, Kenneth; Tarp, Finn; Thurlow, James; Fant, Charles; Wright, Len
    Abstract: Mozambique, like many African countries, is already highly susceptible to climate variability and extreme weather events. Climate change threatens to heighten this vulnerability. In order to evaluate potential impacts and adaptation options for Mozambique, we develop an integrated modelling framework that translates atmospheric changes from general circulation model projections into biophysical outcomes via detailed hydrologic, crop, hydropower and infrastructure models. These sector models simulate a historical baseline and four extreme climate change scenarios. Sector results are then passed down to a dynamic computable general equilibrium model, which is used to estimate economy-wide impacts on national welfare, as well as the total cost of damages caused by climate change. Potential damages without changes in policy are significant; our discounted estimates range from US$2.3 to US$7.4 billion during 2003– 50. Our analysis identifies improved road design and agricultural sector investments as key ‘no-regret’ adaptation measures, alongside intensified efforts to develop a more flexible and resilient society. Our findings also support the need for cooperative river basin management and the regional coordination of adaptation strategies.
    Keywords: entrepreneurship, gender, women entrepreneurs, Africa
    Date: 2010
  17. By: Peter Kugler (University of Basel)
    Date: 2010
  18. By: Bachev, Hrabrin
    Abstract: This paper incorporates the interdisciplinary New Institutional and Transaction Costs Economics and suggests a holistic framework for analysis of management agro-ecosystem services. That new approach for analyses and assessment of management of agro-ecosystem services includes: definition of the agro-ecosystem services and the governance; specification of governance needs of agro-ecosystem services and the spectrum of available governing modes (formal and informal institutions, market, private, public and hybrid forms); assessment of efficiency of different modes of governance in terms of their potential to protect diverse eco-rights and investments, assure a socially desirable level of agro-ecosystem services, minimize overall costs, coordinate and stimulate eco-activities, meet individual and social preferences and reconcile conflicts of related agents etc.
    Keywords: ecosystem services; mechanisms of governance; environmental management; market; private; public and hybrid governance
    JEL: D86 Q28 Q57 R58 Q38 Q26 Q13 Q15 Q20 D73 D21 D02 Q24 Q01 Q12 Q25 Q18 D23 D74 Q34 Q56 Q27 Q58
    Date: 2010–10

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