New Economics Papers
on Agricultural Economics
Issue of 2011‒02‒26
sixteen papers chosen by

  1. Agricultural Land Market Trends 1991–2010: The 2010 SDSU South Dakota Farm Real Estate Survey By Larry Janssen; Burton Pflueger; Emmanuel Opoku
  2. Wouth Dakota Agricultural Land Market Factors, 2010 By Burton Pflueger; Larry Janssen; Emmanuel Opoku
  3. The role of fundamental Q and financing frictions in agricultural investment decisions: an analysis pre and post financial crisis By Conor M. O'Toole; Carol Newman; Thia Hennessy
  4. Food and energy prices, government subsidies and fiscal balances in south Mediterranean countries By Albers, Ronald; Peeters, Marga
  5. A Barrel of Oil or a Bottle of Wine: How Do Global Growth Dynamics Affect Commodity Prices? By Tahsin Saadi-Sedik; Serhan Cevik
  6. International Support of Climate Change Policies in Developing Countries: Strategic, Moral and Fairness Aspects By Dirk Rübbelke
  7. Fall Crop Insurance Considerations By Matthew Diersen
  8. Effects of Land Holding on School Enrollment in Rural Kenya By Kazuya Wada
  9. Incentive and crowding out effects of foodassistance: Evidence from randomizedevaluation of food-for-training project inSouthern Sudan By Munshi Sulaiman
  10. Minimum Quality Standards in Hedonic Markets with Environmental Externalities By G. Ecchia; L. Lambertini; A. Tampieri
  11. Designing climate change adaptation policies : an economic framework By Hallegatte, Stephane; Lecocq, Franck; de Perthuis, Christian
  12. The War on Illegal Drugs in Producer and Consumer Countries: A simple analytical framework By Daniel Mejia; Pascual Restrepo
  13. Vertical Specialisation and Regional Trade Integration. A Study on Italy and Northern African Countries By Giancarlo Corò; Marco Giansoldati; Mario Volpe
  14. Economic Impact of the Beef Industry in South Dakota; Statistical Comparison Essay By Taylor, Gary; Li, Jing
  15. The effects of land transfer taxes on real estate markets: Evidence from a natural experiment in Toronto By Ben Dachis; Gilles Duranton; Matthew A. Turner
  16. Natural disasters : what is the role for social safety nets? By Pelham, Larissa; Clay, Edward; Braunholz, Tim

  1. By: Larry Janssen (Department of Economics, South Dakota State University); Burton Pflueger (Department of Economics, South Dakota State University); Emmanuel Opoku (Department of Economics, South Dakota State University)
    Abstract: Agricultural land values and cash rental rates in South Dakota, by region and by state, are the primary topics of this report. The target audiences for this report are farmers and ranchers, landowners, agricultural professionals (lenders, rural appraisers, professional farm managers), and policy makers interested in agricultural land market trends. This report contains the results of the 2010 SDSU South Dakota Farm Real Estate Market Survey, the 20th annual SDSU survey developed to estimate agricultural land values and cash rental rates by land use in different regions of South Dakota.
    Keywords: Agricultural Land,farmland, Cropland, Land Ownership, Land leasing, Land Use, Landownership
    JEL: Q12 Q15
    Date: 2011–01
  2. By: Burton Pflueger (Deparment of Economics, South Dakota State University); Larry Janssen (Deparment of Economics, South Dakota State University); Emmanuel Opoku (Deparment of Economics, South Dakota State University)
    Date: 2010–07
  3. By: Conor M. O'Toole (Department of Economics, Trinity College Dublin); Carol Newman (Department of Economics, Trinity College Dublin); Thia Hennessy (Rural Economy Development Programme, Teagasc)
    Abstract: This paper uses a fundamental Q model of investment to consider the role played by financing frictions in agricultural investment decisions, controlling econometrically for censoring, heterogeneity and errors-in-variables. Our findings suggest that farmer's investment decisions are not driven by market fundamentals. We find some evidence that debt overhang restricts investment but investment is not dependent on liquidity or internal funds. The role of financing frictions in determining investment decisions changes in the post-financial crisis period when debt overhang becomes a significant impediment to farm investment. The evidence suggests that farmers increasingly rely on internal liquidity to drive investment. Finally, we find no evidence that farmers use off-farm capital to fund on-farm investment.
    Keywords: Credit Constraints, Firm Level Investment, Tobin's Q, Debt
    JEL: G31 G32 F34
    Date: 2011–02
  4. By: Albers, Ronald; Peeters, Marga
    Abstract: Just before the global crisis soaring commodity prices pushed up inflation significantly, not least in EU neighbour countries at the Mediterranean. These price shocks affected public finances in the southern Mediterranean region, notably via government subsidies. Partly due to lags in the transmission of commodity prices into prices for final users the subsidies burden continued to be felt, despite the price falls registered in the wake of the credit crisis. We show that downward price rigidities play a role. Recently, commodity price pressures have re-emerged. We focus on food prices and analyse recent developments in food inflation in Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the occupied Palestinian territories, Syria and Tunisia in comparison with other middle income economies. Subsidies on food and fuel are quantified per country for the period 2002-2010. The incremental government subsidies entail an estimated deterioration of the government balances of up to more than 2% of GDP in 2008 and, for most countries only slight improvements in the global recession year 2009. Ensuing longer-term challenges for public finances remain as inflation rises on the back of higher global economic growth. As recent events in Tunisia and Egypt illustrate, these can have important political implications. Finally, the paper discusses some options that can lead to more efficient government spending, even in the event of sharp swings in prices of basic necessities.
    Keywords: food prices; energy prices; inflation; public finances; government subsidies
    JEL: E62 L71 L66 H2 E3
    Date: 2011–01
  5. By: Tahsin Saadi-Sedik; Serhan Cevik
    Abstract: This paper investigates the causes of extreme fluctuations in commodity prices from 1990 to 2010. Analyzing two very distinct commodities-crude oil and fine wine, we find that macroeconomic factors are the main determinants of commodity prices. Although supply constraints have the expected effect, aggregate demand growth is the key factor. The empirical results show that while advanced economies account for more than half of global consumption, emerging economies make up the bulk of the incremental change in demand, thereby having a greater weight in commodity price formation. The results also show that the shift in the composition of aggregate commodity demand is a recent phenomenon.
    Keywords: Agricultural commodities , Agricultural prices , Commodity price fluctuations , Consumption , Demand , Economic growth , Emerging markets , International liquidity , Oil prices , Oil sector , Supply ,
    Date: 2011–01–04
  6. By: Dirk Rübbelke
    Abstract: International transfers in climate policy channeled from the industrialized to the developing<br /> world either support the mitigation of climate change or the adaptation to global warming.<br /> From an allocative efficiency point of view, transfers supporting mitigation tend to be Pareto-improving<br /> whereas this is not very likely in the case of adaptation support. We illustrate this<br /> by regarding transfer schemes currently applied under the UN Framework Convention on<br /> Climate Change (UNFCCC) and the Kyoto framework.<br /> However, if we enrich the analysis by integrating distributional aspects, we find that<br /> international adaptation funding may help both developing and developed world. Interestingly<br /> this is not due to altruistic incentives, but due to follow-up effects on international<br /> negotiations on climate change mitigation. We argue that the lack of fairness perceived by<br /> developing countries in the international climate policy arena can be reduced by the support<br /> of adaptation in these countries. As we show – taking into account different fairness concepts<br /> – this might raise the prospects of success in international negotiations on climate change.<br /> Yet, we find that the influence of transfers may induce different fairness effects on climate<br /> change mitigation negotiations to run counter.<br /> We discuss whether current transfer schemes under the UNFCCC and the Kyoto framework<br /> adequately serve the distributive and allocative objectives pursued in international climate<br /> policy.<br />
    Keywords: adaptation, climate change, fairness, Global Environmental Facility, international climate policy, mitigation, reciprocity, transfers
    Date: 2011–02
  7. By: Matthew Diersen (Deparment of Economics South Dakota State University)
    Date: 2010–08
  8. By: Kazuya Wada
    Date: 2010–07
  9. By: Munshi Sulaiman
    Abstract: Food assistance is one of the most common forms of safety net programs in postconflictsituations. Besides the humanitarian and promotional roles, there arewidespread scepticisms of food assistance regarding its possible influence ondisincentive to work and on crowding out of private transfers. While there is arelatively large amount of empirical research on social protection in stable context, itis less researched in post-conflict situations. Based on randomized evaluation of afood-for-training program implemented in Southern Sudan, this paper estimatesthese effects. We observe a significant negative impact (about 13%) on per capitahousehold income. However, there is no effect on the hours of work or the type ofthe economic activities of the adult members. The decline in income mostlyhappened through a reduction in child labor. There is also a positive effect on schoolenrolment for girls (about 10 percentage points) and an improvement in theirhousing status. We also do not find any indication of crowding out of privatetransfers for the participants. This is most likely due to the extent of private transfersbeing very low to begin with. However, there is a small but significant impact of thetransfers given out by the participants.
    Keywords: food assistance, incentive, crowding-out, Southern Sudan
    JEL: J22 O12 Q18 L
    Date: 2010–12
  10. By: G. Ecchia; L. Lambertini; A. Tampieri
    Abstract: We investigate the introduction of a minimum quality standard (MQS) in a vertically differentiated duopoly with an environmental externality. We establish that the MQS bites only if the hedonic component of consumer preferences is sufficiently strong. Then, we illustrate an underlying tradeoff between the beneficial effects of quality enhancement on prices and the associated undesirable increase in the environmental externality.
    JEL: L13 L51 Q50
    Date: 2011–02
  11. By: Hallegatte, Stephane; Lecocq, Franck; de Perthuis, Christian
    Abstract: Adaptation has long been neglected in the debate and policies surrounding climate change. However, increasing awareness of climate change has led many stakeholders to look for the best way to limit its consequences and has resulted in a large number of initiatives related to adaptation, particularly at the local level. This report proposes a general economic framework to help stakeholders in the public sector to develop effective adaptation strategies. To do so, it lays out the general issues involved in adaptation, including the role of uncertainty and inertia, and the need to consider structural changes in addition to marginal adjustments. Then, it identifies the reasons for legitimate public action in terms of adaptation, and four main domains of action: the production and dissemination of information on climate change and its impacts; the adaptation of standards, regulations and fiscal policies; the required changes in institutions; and direct adaptation actions of governments and local communities in terms of public infrastructure, public buildings and ecosystems. Finally, the report suggests a method to build public adaptation plans and to assess the desirability of possible policies.
    Keywords: Climate Change Economics,Wetlands,Climate Change Mitigation and Green House Gases,Adaptation to Climate Change,Science of Climate Change
    Date: 2011–02–01
  12. By: Daniel Mejia; Pascual Restrepo
    Abstract: This paper develops a simple model of the war against illegal drugs in producer and consumer countries. Our analysis shows how the equilibrium quantity of illegal drugs, as well as their price, depends on key parameters of the model, among them the price elasticity of demand, and the effectiveness of the resources allocated to enforcement and prevention and treatment policies. Importantly, this paper studies the trade-off faced by drug consumer country`s government between prevention policies (aimed at reducing the demand for illegal drugs) and enforcement policies (aimed at reducing the production and trafficking of illegal drugs in producer countries). We use available data for the war against cocaine production and trafficking in Colombia, and that against consumption in the U.S. in order to calibrate the unobservable parameters of the model. Among these are the effectiveness of prevention and treatment policies in reducing the demand for cocaine; the relative effectiveness of interdiction efforts at reducing the amount of cocaine reaching consumer countries; and the cost of illegal drug production and trafficking activities in producer countries.
    Date: 2011–02–01
  13. By: Giancarlo Corò (Department of Economics, University Of Venice Cà Foscari); Marco Giansoldati (Department of Economics, University Of Venice Cà Foscari); Mario Volpe (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This paper uses a multistage approach to investigate the role of Italy in the Northern African countries, both in terms of trade and investment. In particular, we show that Italian import flows for two typically Made in Italy industries, namely textile and clothing on one hand, and leather and footwear on the other hand, are strongly related not only to export flows of the same sector, but also to a set of variables capturing features of the Italian and the foreign country. In this way, we supply a first result supporting the hypothesis of an international fragmentation of production. To offer this outcome additional strength, we endow the present contribution with information on the attractiveness of the Northern African countries, looking at the volume of inward FDI flows and stocks, but with no industry disaggregation, due to data unavailability. Although we start from a global perspective, we rapidly shift to consider only the Italian investments in the area, with a breakdown by outward region. Thanks to the availability of a detailed dataset made available by the Bank of Italy, we are able to provide further evidence on the Italian internationalisation in the North of Africa. Indeed, our second result highlights the remarkable heterogeneity across countries and the emergence of the major role played by Tunisia.
    Keywords: Northern Africa, Italian regions, Made in Italy, FDI, fragmentation, Global Value Chains
    JEL: F14 F21 F23 L67
    Date: 2011
  14. By: Taylor, Gary (Deparment of Economics South Dakota State University); Li, Jing (Deparment of Economics South Dakota State University)
    Date: 2010–09
  15. By: Ben Dachis; Gilles Duranton; Matthew A. Turner
    Abstract: Taxes levied on the sale or purchase of real estate are pervasive but little studied. By exploiting a natural experiment arising from Toronto’s imposition of a Land Transfer Tax (LTT) in early 2008, we estimate the impact of real estate transfer taxes on the market for single family homes. Our data show that Toronto’s 1.1% tax caused a 15% decline in the number of sales and a decline in housing prices about equal to the tax. Relative to an equivalent property tax, the associated welfare loss is substantial, about $ 1 for every $ 8 in tax revenue. The magnitude of this welfare loss is comparable to those associated with better known interventions in the housing market. Unlike many possible tax reforms, eliminating existing LTTs in favour of revenue equivalent property taxes appears straightforward.
    Keywords: Land transfer tax, property tax, land regulation
    JEL: R21 R51
    Date: 2011–02–14
  16. By: Pelham, Larissa; Clay, Edward; Braunholz, Tim
    Abstract: This paper makes the case for why safety nets are an important tool for managing the risk of natural hazards. The use of safety nets is advocated both ex ante, to prevent and mitigate the impact of natural disaster and ex post, to cope with the impacts of natural shocks. Firstly, the paper explores the implications of contextual factors to be taken into account in the design of an effective safety net system to respond to the needs generated by natural disasters. Learning from the responses to a number of recent natural disasters, a typology of the different types of natural hazards which require different approaches to reduce their risk is introduced. Secondly, the paper considers some'guidelines'for improving the design and implementation of safety nets either to prevent and/or to recover from natural disasters. Finally, some conclusions and recommendations for more effective safety net and suggestions for addressing key issues are outlined.
    Keywords: Safety Nets and Transfers,Hazard Risk Management,Food&Beverage Industry,Labor Policies,Natural Disasters
    Date: 2011–02–01

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