nep-agr New Economics Papers
on Agricultural Economics
Issue of 2011‒04‒30
twenty papers chosen by
Angelo Zago
University of Verona

  1. A case of integration of organic dairy sheep farm in value chains in Bulgaria By Bachev, Hrabrin
  2. Standard, Reputation and Trade: Evidence from U.S horticultural imports refusals By Marie-Agnès Jouanjean; ;
  3. Pollution and Environmental Issues in Agriculture and the Livestock Industry: A Brief Review of the Japanese Case By Kawata, Yukichika
  4. Cropping practices and labor requirements in field operations for major crops in Ghana: What needs to be mechanized? By Ngeleza, Guyslain K.; Owusua, Rebecca; Jimah, Kipo; Kolavalli, Shashidhara
  5. Sit down at the ball game: how trade barriers make the world less food secure By Rutten, Martine M.; Chant, Lindsay J.; Meijerink, Gerdien W.
  6. Intercommodity price transmission and food price policies: An analysis of Ethiopian cereal markets By Rashid, Shahidur
  7. Censored Demand System Estimation with Endogenous Expenditures in clustered samples: an application to food demand in urban Mozambique By Mikkel Barslund; ;
  8. Farm households' preference for cash-based compensation versus livelihood-enhancing programs: A choice experiment to inform avian flu compensation policy in Nigeria By Oparinde, Adewale; Birol, Ekin
  9. An Economic Analysis of the Special Milk Classes Scheme of Canada and the Agricultural Subsidy By ABE Kenzo
  10. Causality Between Market Liquidity and Depth for Energy and Grains By Ramazan Sari; Shawkat Hammoudeh; Chia-Lin Chang; Michael McAleer
  11. The Household Production Function Approach to Valuing Climate: The Case of Japan By David Maddison; Katrin Rehdanz; Daiju Narita
  12. The role of the regulatory framework for innovation activities: The EU ETS and the German paper industry By Rogge, Karoline S.; Schleich, Joachim; Haussmann, Philipp; Roser, Annette; Reitze, Felix
  13. Does Health Insurance Decrease Health Expenditure Risk in Developing Countries? The Case of China By Juergen Jung; Jialu Liu
  14. Evaluating the long-term impact of antipoverty interventions in Bangladesh: An overview By Quisumbing, Agnes R.; Baulch, Bob; Kumar, Neha
  15. Trade liberalization and inter-provincial dumping in a spatial equilibrium model: the case of the Canadian dairy industry By Abbassi, Abdessalem; Larue, Bruno
  16. Economic development and environmental quality in Nigeria: is there an environmental Kuznets curve? By Chuku, Agbai
  17. Contracting for Impure Public Goods: Carbon Offsets and Additionality By Charles Mason; Andrew Plantinga
  18. Can conditional cash transfers improve maternal health and birth outcomes?: Evidence from El Salvador's Comunidades Solidarias Rurales By de Brauw, Alan; Peterman, Amber
  19. The Riskiness of Risk Models By Christophe Boucher; Bertrand Maillet
  20. Health Insurance Reform and Efficiency of Township Hospitals in rural China: an Analysis from Survey Data By Aurore Pelissier; Martine Audibert; Jacky Mathonnat; Xiao Xian Huang

  1. By: Bachev, Hrabrin
    Abstract: This paper presents the state of integration of small scale dairy farms in value chains in Bulgaria and a case study on organic farming as a new prospective approach for market inclusion. It outlines the evolution of dairy sheep farming and organic production; analyzes the pace, factors and impacts of development of a successful organic dairy sheep farm from North-West Bulgaria; specifies driving factors and prospects of small-scale organic farming development; assesses possibilities for replication of positive experience in other farms, and suggests recommendations for improvement of public policies and farming strategies.
    Keywords: farmers inclusion; supply-chain management; organic farming; dairy farming; Bulgaria
    JEL: Q1 Q13 Q12 Q14 Q18
    Date: 2010–12–01
  2. By: Marie-Agnès Jouanjean; ;
    Abstract: This paper investigates the impact of food safety standards promulgated by governments or imposed by byers from the private sector on the capacity of developing countries to access developed countries' markets for high value agricultural and food products. I offer an analysis that disentangles productivity-sorting from quality-sorting in fresh fruits and vegetables exports. My theoretical model and empirical analysis confirms the importance of taking into consideration importers' preference for quality as well as exporters' capacity to produce quality products when analyzing average export unit prices of fresh fruits and vegetables. Thanks to a new database on U.S import refusals, my empirical analysis shows that a shock to reputation seems to have a downgrading effect, reducing the capacity of countries to export quality products.
    Keywords: SPS, agricultural trade, quality sorting, reputation
    JEL: F13 O13 Q17
    Date: 2011
  3. By: Kawata, Yukichika
    Abstract: This paper presents an overview of the current conditions of livestock-related environmental problems in Japan. The former Basic Agriculture Act, which was effective between 1961 and 1999, promoted single cropping, the use of chemicals in agricultural methods, and the use of large-sized machines, which caused problems such as soil impoverishment, replant failure, chemical residue accumulation, ground water pollution, and productivity reduction. Many of these livestock-related environmental problems are closely linked to substances in livestock excreta and excessive nitrogen, which is the prime cause of concern. These problems are related to externality and can be attributed to the overuse of natural resources. In addition, the former law ignored the multiple functions of agriculture, which, in turn, diminished the positive external effects. These problems are related to externality and can be attributed to the underuse of natural resources. This condition has been improved under the Food, Agriculture and Rural Areas Basic Act (New Basic Agriculture Act). Superficially, livestock excreta and excessive nitrogen contribute to the overuse problem, but if we regard them as unused resources, they can also be categorised as factors that contribute to the underuse problem. The new act offers measures to resolve underuse problems, but these measures continue to remain inadequate to arrive at a complete solution. Therefore, in addition to the legal approaches adopted, voluntary countermeasures by agriculture and livestock farmers should also be promoted.
    Keywords: externality; livestock-related environmental problems; livestock excreta; multiple functions of agriculture; voluntary countermeasures
    JEL: Q53 Q18
    Date: 2011–04–13
  4. By: Ngeleza, Guyslain K.; Owusua, Rebecca; Jimah, Kipo; Kolavalli, Shashidhara
    Abstract: This study is to examine the labor requirements associated with different cropping systems in Ghana in order to guide the prioritization of investments in mechanization in the country. First, major cropping systems are identified in the country by adopting the cropping pattern approach of Ruthenberg (1983), who defined farming systems according to the leading crop activities. Second, labor requirements and costs of production of crops in the various systems are examined at various levels of substitution of either herbicides or animal and mechanical traction for labor. We found that the total labor requirements varied among cropping systems. The requirements were particularly high in the two cocoa cropping systems in the forest zones. The requirements were particularly high for land preparation and crop maintenance. Looking across crops, land preparation and crop maintenance took the largest share of labor for cassava, yam, and maize. Rice, on the other hand, required large shares of labor for land preparation and harvesting. When all the systems are considered together, however, crop maintenance required more labor than land preparation. In response to apparent unavailability and cost of labor, farmers are increasingly demanding mechanical traction for land preparation in Ghana. The benefits of mechanizing land preparation depend on both the system and the type of crop cultivated. Mechanization of land preparation for cassava in the vegetable belt, for instance, is more labor saving and cost effective than m Mechanization of land preparation for cassava in cereals belt. Within systems, there is also variation across crops. Where mechanization is not feasible for land preparation or not yet adopted for other field operations such as weeding, an alternative and common substitution for labor in crop production is herbicides. Herbicides are used to clear land for planting as well as to control weeds in standing crops. We found that where herbicide was used, its application reduced labor requirements for land preparation significantly. Selective herbicides were used to control weeds in all the crops examined and in all the belts except the vegetable belt. They also reduced labor use for weeding drastically.
    Keywords: Cropping systems, labor requirements, mechanization, seasonal labor, Development strategies,
    Date: 2011
  5. By: Rutten, Martine M.; Chant, Lindsay J.; Meijerink, Gerdien W.
    Abstract: This paper analyses the impacts of trade policy responses to rising world food prices by carrying out a series of stylised experiments in the wheat market using a world trade model, GTAP. The sequence of events that is modelled comprises a negative wheat supply shock and subsequent implementation of an export tax by a major net exporter and a reduction in import tariffs by a small importer. The effects of trade policy responses are contrasted with those of full liberalisation of the wheat market. At the core are the (opposite) effects on producers and consumers, as well as the terms-of-trade and trade tax revenue effects. Food security is shown to depend crucially on changes in prices but also in incomes that are associated with changes in factor returns. The results reveal that major net exporters are generally better off when implementing export taxes for food security purposes. Large exporting countries export price instability causing world food prices to rise further. Net importing countries lose out and have limited leeway to reduce tariffs or subsidise imports. Liberalising wheat trade mitigates rising prices and contributes to food security, but to the detriment of production in Africa and Asia, making them more dependent on and vulnerable to changes in the world market. Concerted action at the WTO forum is required, notably clarifying and sharpening the rules regarding export measures.
    Keywords: food security; world food crisis; international grain trade; trade measures; trade liberalisation; CGE modelling
    JEL: C68 F10 Q18
    Date: 2011–04–18
  6. By: Rashid, Shahidur
    Abstract: Cereal price variability in Ethiopia has worsened in recent years, and some of the earlier liberalizations are being reversed due to the unacceptable economic and political costs of increased price variability. The challenge now is to achieve price stability in a cost-effective way. This paper examines intercommodity price relationships to assess the relative importance of each of the three major cereals in generating price volatility. Based on the estimates from a dynamic econometric model, the paper concludes that maize is the most significant in exacerbating price variability with respect to the persistence of shocks to itself and the two other cereals. This implies that focusing on maize, instead of wheat, will not only help better stabilize prices but also reduce costs of stabilization. The results are also discussed in the context of ongoing policy discussions.
    Keywords: Cointegration, common trend, food price stabilization,
    Date: 2011
  7. By: Mikkel Barslund; ;
    Abstract: We address the issue of endogenous expenditures in the context of a censored demand system by an augmented regression approach estimated with a two-step estimator. An application to food demand by urban households in Mozambique shows that accounting for endogeneity is potentially important in obtaining reliable point estimates of price and, in particular, expenditure elasticities. Furthermore, a bootstrap approach to obtain confidence intervals when data are clustered - as is the case with most household surveys - is devised. Based on a Monte Carlo exercise we speculate that previous studies in failing to account for the clustered nature of the data overstate the precision with which elasticities are estimated.
    Keywords: Censored demand system, endogeneity, survey data, elasticities, Mozambique, food demand
    JEL: D12 O12
    Date: 2011
  8. By: Oparinde, Adewale; Birol, Ekin
    Abstract: In this paper we attempt to bridge the resilience school of thought and incentive compatibility in livestock disease control policies through a pilot choice experiment study conducted on 104 farm households in the Nasarawa state of Nigeria. The aim of this study was to shed light on farm households' valuation of various compensation plan attributes and trade-offs among these attributes. In the experiment presented here, compensation plan was defined broadly to include not just the traditional attributes, such as the number of days it takes to receive the payment, the compensation rate, and the method of payment, but also more diverse interventions, such as training in biosecurity measures and access to bank loans, which are expected to have longer-term impacts on households' livelihood outcomes. We analyzed the data using various discrete choice models, the best-fitting of which was the random parameter (or mixed) logit model with interactions, which enabled us to capture both unobserved and observed heterogeneity in farm households' preferences for the compensation plan attributes. The results reveal that overall, study households preferred compensation plans that made payment in fewer days, provided facilitated credit access, and offered biosecurity training. Households with better-educated heads and those with lower income levels valued compensation plans that provided credit access and biosecurity training the most. These findings are expected to inform the design of efficient, effective, equitable, and targeted compensation policies, which could not only reduce the livestock disease risk but also improve the resilience of poor farm households' livelihoods against future poultry-related or other idiosyncratic shocks.
    Keywords: avian flu, choice experiment method, compensation scheme, conditional logit model, livestock disease, random parameter logit model,
    Date: 2011
  9. By: ABE Kenzo
    Abstract: We examine the effects of Canada's Special Milk Classes Scheme on resource allocation and discuss the rationale for average total cost of production as a measure of payments. Our simple model divides the total supply of fluid milk into two classes: one for domestic consumption and the other for export. First we show that the regulated high price of milk sold for domestic consumption does not yield cross subsidization if the processed milk for export is traded freely in the international market. In addition, the price of milk processed and sold for export may not be lower than the average total cost in some cases. It implies that the average total cost standard does not necessarily provide the proper measure of the subsidy.
    Date: 2011–04
  10. By: Ramazan Sari (Department of Business Administration, Middle East Technical University); Shawkat Hammoudeh (Lebow College of Business, Drexel University); Chia-Lin Chang (Department of Applied Economics, National Chung Hsing University); Michael McAleer (Erasmus University Rotterdam, Tinbergen Institute, The Netherlands, and Institute of Economic Research, Kyoto University)
    Abstract: This paper examines the roles of futures prices of crude oil, gasoline, ethanol, corn, soybeans and sugar in the energy-grain nexus. It also investigates the own- and cross-market impacts for lagged grain trading volume and open interest in the energy and grain markets. According to the results, the conventional view, for which the impacts are from oil to gasoline to ethanol to grains in the energy-grain nexus, does not hold well in the long run because the oil price is influenced by gasoline, soybeans and oil. Moreover, gasoline is preceded by only the oil price and ethanol is not foreshadowed by any of the prices. However, in the short run, two-way feedback in both directions exists in all markets. The grain trading volume effect across oil and gasoline is more pronounced in the short run than the long run, satisfying both the overconfidence/disposition and new information hypotheses across markets. The results for the ethanol open interest shows that money flows out of this market in both the short and long run, but no results suggest across market inflows or outflows to the other grain markets.
    Keywords: Causality, market liquidity, depth, energy, grains.
    JEL: Q11 Q18 Q42
    Date: 2011–04
  11. By: David Maddison; Katrin Rehdanz; Daiju Narita
    Abstract: According to household production function theory households combine marketed goods and nonmarket environmental goods to produce service flows of direct value to the household. This readily explains why, as an input to household production activities, households might have preferences over the climate. Using techniques more frequently employed to account for differences in the demographic composition of households we use household production function theory to estimate climate equivalence scales using household expenditure data drawn from 51 Japanese cities over the period 2000-2009. Our results indicate that warmer temperatures result in a small but statistically highly significant reduction in the cost of living. Combining these estimates with climate change scenarios associated with the IPCC A2, A1B, and B1 emissions scenarios other things being equal points to a slight reduction in Japanese households’ cost of living
    Keywords: Consumer Demand; Household Production Function; Climate; Japan
    JEL: D12 D13 Q51 Q54
    Date: 2011–04
  12. By: Rogge, Karoline S.; Schleich, Joachim; Haussmann, Philipp; Roser, Annette; Reitze, Felix
    Abstract: Based on a research framework which combines environmental economics and innovation studies, we explore the relevance of the regulatory framework for innovation activities in the German paper industry, with a focus on climate poli-cies. Innovation activities considered include research and development, adop-tion and organizational change. Empirically, we mainly rely on the survey data of paper producers and technology providers. Findings suggest that innovation activities are mainly governed by market factors and (as yet) are hardly affected by the European Emission Trading System and other climate policies. Also, the impact of these policies on innovation activities is lower for technology providers than for paper producers. However, the majority of companies expect the ef-fects of the regulatory climate policy framework on innovation to increase by 2020. --
    Date: 2011
  13. By: Juergen Jung (Department of Economics, Towson University); Jialu Liu (Department of Economics, Allegheny College)
    Abstract: We make use of panel data from the China Health and Nutrition Survey between 1991 and 2006 to investigate whether health insurance increases out-of-pocket (OOP) health expenditure risk. We find that health insurance increases the probability of catastrophic OOP health expenditures using a series of Probit models. We then use two-part as well as sample selection models to account for selection on unobservable variables and find that although the probability of positive OOP health expenditures increases with the availability of health insurance, the actual level of OOP health expenditures decreases. More specifically, we find that for a per- son with positive OOP health expenditures, having health insurance reduces the level of OOP expenses by 12.56 percent while controlling for selection effects.
    Keywords: health insurance, exposure to health risk, health care in China, out-of-pocket health expenditure in China, two-part model, bivariate sample selection model, Heckman two- step estimator, China Health and Nutrition Survey (CHNS).
    JEL: I11 C33 C34
    Date: 2011–04
  14. By: Quisumbing, Agnes R.; Baulch, Bob; Kumar, Neha
    Abstract: This paper provides an overview of a research project that assessed the long-term impact of three antipoverty interventions in Bangladesh—the introduction of new agricultural technologies, educational transfers, and microfinance—on monetary and nonmonetary measures of well-being. This paper begins by setting out the conceptual framework, methodology, and empirical methods used for the evaluation of long-term impacts. It discusses the context of the evaluations and the longitudinal data used. Key findings from the individual papers are then presented, followed by an indicative analysis of the cost-effectiveness of these interventions. The overview concludes with implications for programs and policy.
    Keywords: antipoverty interventions, Impact evaluation, long-term impact,
    Date: 2011
  15. By: Abbassi, Abdessalem; Larue, Bruno
    Abstract: The paper introduces imperfect competition in a spatial equilibrium model of provincial dairy markets to analyze the welfare impacts of trade liberalization. Our model accounts for output restrictions at the farm level and the potential presence of market power at the processing level. Our model builds on the reciprocal dumping model of Brander and Krugman (1983) because processing firms from different provinces compete with one another in several provinces. Simulations reveal that welfare in the Canadian dairy sector could increase by as much as $1 billion per year if aggressive tariff cuts were made while moderate liberalization plans would yield annual gains of $234.5 million. Even large producing provinces like Quebec and Ontario gain from trade liberalization. In comparison, a perfect competition model yields more modest welfare gains in the range of $15.6 million and $34.5 million. Finally, we show that the switch in the sign of the transport cost-welfare relation identified by Brander and Krugman (1983) occurs at transport costs that are too high to be policy-relevant.
    Keywords: Supply management, Canadian dairy sector, imperfect competition, bilateral dumping
    JEL: F1 L1
    Date: 2011
  16. By: Chuku, Agbai
    Abstract: This study utilizes standard- and nested-EKC models to investigate the income-environment relation for Nigeria, between 1960 and 2008. The results from the standard-EKC model provides weak evidence of an inverted-U shaped relationship with turning point (T.P) around $280.84, while the nested model presents strong evidence of an N-shaped relationship between income and emissions in Nigeria, with a T.P around $237.23. Tests for structural breaks caused by the 1973 oil price shocks and 1986 Structural Adjustment are not rejected, implying that these factors have not significantly affected the income-environment relationship in Nigeria. Further, results from the rolling interdecadal analysis shows that the observed relationship is stable and insensitive to the sample interval chosen. Overall, our findings imply that economic development is compatible with environmental improvements in Nigeria. However, tighter and concentrated environmental policy regimes will be required to ensure that the relationship is maintained around the first two-strands of the N-shape
    Keywords: Environmental Kuznets curve; development; CO2 emissions; nested-EKC model; Nigeria
    JEL: O20 Q01
    Date: 2011–01–11
  17. By: Charles Mason; Andrew Plantinga
    Abstract: Governments contracting with private agents for the provision of an impure public good must contend with agents who would potentially supply the good absent any payments. This additionality problem is centrally important to the use of carbon offsets to mitigate climate change. We analyze optimal contracts for forest carbon, an important offset category. A novel national-scale simulation of the contracts is conducted that uses econometric results derived from micro data. For a 50 million acre increase in forest area, annual government expenditures with optimal contracts are found to be about $4 billion lower compared to costs with a uniform subsidy.
    JEL: D8 L15 Q2
    Date: 2011–04
  18. By: de Brauw, Alan; Peterman, Amber
    Abstract: Although conditional cash transfers (CCTs) are traditionally evaluated in relation to child schooling and nutrition outcomes, there is growing interest in specifically examining maternal and reproductive health impacts. However, since data collection is not typically designed to evaluate these outcomes and sample sizes are often limited, there is a lack of rigorous evidence as to whether and through which pathways these effects may be realized. This paper uses regression discontinuity design and a unique implicit threshold to evaluate the impact of El Salvador's CCT program Comunidades Solidarias Rurales on a range of maternal and reproductive health outcomes: (1) prenatal care, (2) skilled attendance at birth, (3) birth in a health facility, and (4) postnatal care, using data collected by the International Food Policy Research Institute and its collaborators from women who entered the program in 2006 and 2007. Results indicate that robust impacts are found on outcomes at time of birth (skilled attendance and birth in facility), while no impacts are found on healthseeking behavior pre- and postbirth (prenatal and postnatal care). Potential impact pathways as well as the implications of these findings for program design are discussed in the conclusion.
    Keywords: conditional cash transfer, maternal health,
    Date: 2011
  19. By: Christophe Boucher (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, A.A.Advisors-QCG - ABN AMRO); Bertrand Maillet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, A.A.Advisors-QCG - ABN AMRO, EIF - Europlace Institute of Finance)
    Abstract: We provide an economic valuation of the riskiness of risk models by directly measuring the impact of model risks (specification and estimation risks) on VaR estimates. We find that integrating the model risk into the VaR computations implies a substantial minimum correction of the order of 10-40% of VaR levels. We also present results of a practical method - based on a backtesting framework - for incorporating the model risk into the VaR estimates.
    Keywords: Model risk, quantile estimation, VaR, Basel II validation test.
    Date: 2011–03
  20. By: Aurore Pelissier (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Martine Audibert (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Jacky Mathonnat (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Xiao Xian Huang (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: In the rural health-care organization of China, township hospitals ensure the delivery of basic medical services. Particularly damaged by the economic reforms implemented from 1975 to the end of the 1990s, township hospitals efficiency is questioned, mainly with the implementation since 2003 of the reform of health insurance in rural areas. From a database of 24 randomly selected township hospitals observed over the period 2000-2008 in Weifang prefecture (Shandong), the study examines the efficiency of township hospitals through a two-stage approach and the calculation of the Malmquist index. As curative and preventive medical services delivered at township hospital level use different production processes, two data envelopment analysis models are estimated with different orientation chosen to compute scores. Following Simar and Wilson (2007), as the traditional two-stage methodology is not relevant, we used a double bootstrap strategy. Results show that technical efficiency declines over time. Moreover, township hospitals are less efficient in the production of preventive services than in the production of curative ones. Several variables explained efficiency (township hospitals' and environment's characteristics) but our results suggest that in the context of China, the efficiency of township hospitals is also influenced by unobservable factors.
    Keywords: data envelopment analysis;Technical efficiency;Double bootstrapping;China;New Rural Cooperative Medical Scheme;Township Hospitals
    Date: 2011–04–21

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