New Economics Papers
on Agricultural Economics
Issue of 2011‒05‒30
twenty-two papers chosen by

  1. Multifunctional agricultural land use in a sustainable world. Design and simulation of an agricultural economy model By Takashashi, Y.; Nijkamp, P.
  2. Rising Food Prices and Household Welfare: Evidence from Brazil in 2008 By Ferreira, Francisco H.G.; Fruttero, Anna; Leite, Phillippe; Lucchetti, Leonardo
  3. World Fertilizer Model—The World N-P-K Model By Rosas, Juan (Francisco)
  4. A Nonlinear Offset Program to Reduce Nitrous Oxide Emissions Induced by Excessive Nitrogen Application By Rosas, Juan (Francisco); Babcock, Bruce A.; Hayes, Dermot J.
  5. Nonparametric approach for measuring the productivity change and assessing the water use efficiency in the irrigated areas of Tunisia By Fraj Chemak
  6. Long-Dated Agricultural Futures Price Estimates Using the Seasonal Nelson-Siegel Model By Jason West
  7. Re-examination of supply response to changes in food commodity prices in Asian countries By Katsushi Imai; Raghav Gaiha; Ganesh Thapa; Abdilahi Ali
  8. "Are genetically modified foods bad for my health?". Individuals' valutation and the choice among different information sources By Sergio Beraldo; Stefania Ottone; Gilberto Turati
  9. Cotton subsidies, the WTO, and the'cotton problem' By Baffes, John
  10. Rural Livelihoods, Forest Access and Time Use: A Study of Forest Communities in Northwest India By Naidu, Sirisha C.
  11. Impact of Rural Employment Guarantee Schemes on Seasonal Labor Markets: Optimum Compensation and Workers' Welfare By Basu, Arnab K.
  12. Isolating the Effect of Major Depression on Obesity: Role of Selection Bias By Dhaval M. Dave; Jennifer Tennant; Gregory J. Colman
  13. Can Strategic Environmental and Social Assessment of REDD+ Improve Forest Governance? By Slunge, Daniel; Ekbom, Anders; Loayza, F.; Guthiga, P.; Nyangena, Wilfred
  14. Weather Shocks, Sweet Potatoes and Peasant Revolts in Historical China By Ruixue Jia
  15. Consumer Preferences for Eco, Health and Fair Trade Labels. An Application to Seafood Product in France By Dorothée Brécard; Sterenn Lucas; Nathalie Pichot; Frédéric Salladaré
  16. Analysis of the relationship between cost, price and profit in lignite extraction By ciumag, anca; ciumag, marin
  17. A Note on the Presence of Inconvenience Yields in Bulk Commodity Markets By Jason West
  18. The engine of sustainable rural development: Embeddedness of entrepreneurs in rural Turkey By Akgun, A.A.; Baycan Levent, T.; Nijkamp, P.
  19. The Uncertainty about the Total Economic Impact of Climate Change By Tol, Richard S. J.
  20. Biodiversity: Economic perspectives By Nunes, P.A.L.D.; Nijkamp, P.
  21. Gendered effects of work and participation in collective forest management By Naidu, Sirisha C.
  22. Ecosystem Good and Service Co-Effects of Terrestrial Carbon Sequestration: Implications for the U.S. Geological Survey’s LandCarbon Methodology By Boyd, James; Brookshire, David S.

  1. By: Takashashi, Y.; Nijkamp, P.
    Date: 2011
  2. By: Ferreira, Francisco H.G. (World Bank); Fruttero, Anna (World Bank); Leite, Phillippe (World Bank); Lucchetti, Leonardo (University of Illinois at Urbana-Champaign)
    Abstract: Food price inflation in Brazil in the twelve months to June 2008 was 18 percent, while overall inflation was 5.3 percent. This paper uses spatially disaggregated monthly data on consumer prices and two different household surveys to estimate the welfare consequences of these food price increases, and their distribution across households. Because Brazil is a large food producer, with a predominantly wage-earning agricultural labor force, our estimates include general equilibrium effects on market and transfer incomes, as well as the standard estimates of changes in consumer surplus. While the expenditure (or consumer surplus) effects were large, negative and markedly regressive everywhere, the market income effect was positive and progressive, particularly in rural areas. Because of this effect on the rural poor, and of the partial protection afforded by increases in two large social assistance benefits, the overall impact of higher food prices in Brazil was U-shaped, with the middle-income groups suffering larger proportional losses than the very poor. Nevertheless, since Brazil is 80 percent urban, higher food prices still led to a greater incidence and depth of poverty at the national level.
    Keywords: food prices, welfare, poverty, inequality, price change incidence curve, Brazil
    JEL: D31 I38 O15
    Date: 2011–05
  3. By: Rosas, Juan (Francisco)
    Abstract: We introduce a world fertilizers model that is capable of producing fertilizer demand projections by crop, by country, by macronutrients, and by year. For each crop, the most relevant countries in terms of production, consumption, or trade are explicitly modeled. The remaining countries are modeled, for each crop, within a regional aggregate. The nutrient coverage includes nitrogen (N), phosphorous (P), and potassium (K). In this report we present the data and procedures used to set up the model as well as the assumptions made. The fertilizer model interacts with the yield equations of the FAPRI-ISU model (Food and Agricultural Policy Research Institute at Iowa State University), and by means of a set of production elasticities, projects each nutrient’s application rate per hectare for each commodity and each country covered by the FAPRI-ISU model. Then, the application rates and the areas projected by FAPRI-ISU are used to obtain projections of fertilizer demand from agriculture on a global scale. With this fertilizer module, policies that directly affect fertilizer markets, such as input taxes or subsidies, quantity use restrictions, and trade restrictions, can now be explicitly formulated and evaluated. The effects of these policies on global agricultural markets and on greenhouse gas emissions can be evaluated with the FAPRI-ISU model and the Greenhouse Gas in Agriculture Simulation Model (GreenAgSiM). Also, any other policy affecting commodity markets such as input and output price shocks, biofuels mandates, and land-use change can now be evaluated with regard to its impacts on the world fertilizer markets.
    Keywords: agriculture; fertilizer; nitrogen; phosphorous; policy analysis; potassium; projections.
    JEL: Q10 Q11 Q18
    Date: 2011–04–26
  4. By: Rosas, Juan (Francisco); Babcock, Bruce A.; Hayes, Dermot J.
    Abstract: On average, U.S. farmers choose to apply nitrogen fertilizer at a rate that exceeds the ex post agronomically optimal rate. The technology underlying the yield response to nitrogen rewards producers who over apply in years when rainfall is excessive. The overapplication of nutrients has negative environmental consequences because the nitrogen that is not taken up by the plant will typically volatilize causing N2O emissions, or leach causing water pollution. We present a nonlinear offset program that induces farmers to reduce their nitrogen applications to the level that will be consumed by the plant in a typical year and, as a result, reduce N2O emissions from agriculture. The offset program is nonlinear because of the nonlinear relationship between N2O and nitrogen application rates. We assume that the farmer solves an expected utility maximization problem, choosing the optimal nitrogen application rate. The key contribution is a set of simulations that shows that modest offset payments will induce participation in the program and will have a significant impact on both expected and actual N2O emissions without having a significant impact on actual or expected yields. We also find that more risk-averse farmers will reduce emissions by a greater amount than less risk-averse farmers. Finally, we show the distribution of emission reductions induced by this nonlinear offset scheme.
    Keywords: nitrogen fertilizer; carbon offsets; nitrous oxide; pollution; uncertainty.
    JEL: D8 Q12 Q18 Q51 Q53 Q54
    Date: 2011–04–28
  5. By: Fraj Chemak (Rural Economic Laboratory , National Institute for Agricultural Research of Tunisia)
    Abstract: In order to cope with the water scarcity, Tunisia has to manage efficiently the demand of the economic and social sectors mainly that of the agricultural irrigated activities. Within this context, this investigation aims to analyze the technical efficiency, the water use efficiency and the dynamic of the productivity of the irrigated areas in the Sidi Bouzid region. Farm surveys have been carried out during 2003 and 2007 harvesting years and technology performance has been assessed using Data Envelopment Analysis approach. Malmquist index has been also computed in order to characterize the productivity change. Empirical findings showed that the technical efficiency of the farms has increased by 19% during this period leading to an improvement of the water use efficiency up to 24%. Both, the technical efficiency change as well as the technical change reveal a positive impact on the productivity change. However, in 2007, the water use efficiency was only 79%. Therefore, farmers have to improve further their irrigated practices in order to save more water.
    Keywords: Irrigated Area, Technical Efficiency, Water Use Efficiency, Productivity Change, Data Envelopment Analysis
    JEL: C14 Q12 Q25
    Date: 2011
  6. By: Jason West
    Keywords: Commodity prices, Nelson-Siegel function, seasonality, liquidity
    JEL: C51 C53 G13
    Date: 2011–07
  7. By: Katsushi Imai; Raghav Gaiha; Ganesh Thapa; Abdilahi Ali
    Date: 2011
  8. By: Sergio Beraldo; Stefania Ottone; Gilberto Turati
    Abstract: We investigate the role of information on consumers’ valuation for food products containing genetically modified organisms (GMOs), using data from a specifically designed survey. We provide three main results. First, we show that introducing mandatory labels to identify whether or not a food product contains GMOs, significantly reduces consumers’ valuation. Second, adding to the label additional information on GMOs significantly affects valuation. Third, no matter the sign of the information previously received, consumers are more willing to trust General Practitioners (GPs), the information source they prefer most. Overall, these results indicate that the crucial issue is not the presence of the label per se, but the availability of the necessary information to make good use of the label content to assess potential health risks deriving from GM foods. In particular, our findings suggest that this can be achieved by properly informing (and convincing) GPs and other health professionals that risks for human health are minimal.
    Keywords: Genetically modified foods, information, health risks, General practitioners, labelling.
    JEL: C91 D82
    Date: 2011–04
  9. By: Baffes, John
    Abstract: Following an 8-year long dispute over cotton subsidies, Brazil and the United States signed a Memorandum of Understanding on April 21, 2010, effectively paving the way for settling the dispute. This paper argues that cotton subsidies are just the tip of the iceberg while a number of other, perhaps more important, issues require attention and, indeed, political will. Chief among them is the persistent divergence between cotton prices and the prices of other agricultural commodities, which reflects, for the most part, the large supply response by China and India, a direct consequence of con-version to biotech cotton varieties in these (and other) countries. Such response -- which kept cotton prices low, compared with other commodities -- imposes a competitive disadvantage to non-users of biotech cotton. The paper also highlights two additional constraints faced by the cotton producing countries of West and Central Africa, namely, the structural inefficiencies of their primary processing industries (also known as ginning) and the appreciation of the CFA franc against the US dollar. Without downplaying the importance of subsidy elimination, the paper concludes that these impediments should receive high priority in the policy agenda.
    Keywords: Economic Theory&Research,Crops&Crop Management Systems,Emerging Markets,Livestock&Animal Husbandry,Agricultural Industry
    Date: 2011–05–01
  10. By: Naidu, Sirisha C.
    Abstract: This paper investigates the effects of the size of private land holdings and access to forest commons on the labour allocation to livelihood activities. The statistical analysis indicates that land and forests are complementary assets in the rural production process. Differential access to private land and common forests together explain variability in time allocation to rural livelihoods in the forested regions of northwest India. Development and conservation policies that might cause displacements or disruptions to such livelihoods must therefore consider the impact of policy making on private wealth as well as access to the natural commons.
    Keywords: time use; rural livelihoods; forest commons; protected areas; South Asia; India
    JEL: D13 Q23 J22 B59 Q12
    Date: 2011–03
  11. By: Basu, Arnab K. (College of William and Mary)
    Abstract: The recent enactment of the National Rural Employment Guarantee Act in India has been widely hailed a policy that provides a safety net for the rural poor with the potential to boost rural income, stabilize agricultural production and reduce rural-urban migration. This paper, models the impact of such employment guarantee schemes in the context of an agrarian economy characterized by lean season involuntary unemployment as a consequence of tied-labor contracts. Specifically, we examine labor and output market responses to a productive rural Employment Guarantee Scheme (EGS) and determine the optimal compensation to public work employees consistent with the objectives of (i) productive efficiency in agriculture and (ii) welfare maximization of the laborers. Our framework provides a theoretical framework for the evaluation of a number of (sometimes) conflicting observations and empirical results on the impact of an EGS on agricultural wages, employment and output, and underscores the importance of the relative productivity of workers in the EGS program vis-à-vis their counterparts engaged in agricultural production in determining the success of these programs.
    Keywords: labor contracts, rural unemployment, employment guarantee schemes, public input, optimal wage
    JEL: J3 Q38 Q12
    Date: 2011–05
  12. By: Dhaval M. Dave; Jennifer Tennant; Gregory J. Colman
    Abstract: There is suggestive evidence that rates of major depression have risen markedly in the U.S. concurrent with the rise in obesity. The economic burden of depression, about $100 billion annually, is under-estimated if depression has a positive causal impact on obesity. If depression plays a causal role in increasing the prevalence of obesity, then policy interventions aimed at promoting mental health may also have the indirect benefits of promoting a healthy bodyweight. However, virtually the entire existing literature on the connection between the two conditions has examined merely whether they are significantly correlated, sometimes holding constant a limited set of demographic factors. This study utilizes multiple large-scale nationally-representative datasets to assess whether, and the extent to which, the positive association reflects a causal link from major depression to higher BMI and obesity. While contemporaneous effects are considered, the study primarily focuses on the effects of past and lifetime depression to bypass reverse causality and further assess the role of non-random selection on unobservable factors. There are expectedly no significant or substantial effects of current depression on BMI or overweight/obesity, given that BMI is a stock measure that changes relatively slowly over time. Results are also not supportive of a causal interpretation among males. However, among females, estimates indicate that past or lifetime diagnosis of major depression raises the probability of being overweight or obese by about seven percentage points. Results also suggest that this effect appears to plausibly operate through shifts in food consumption and physical activity. We estimate that this higher risk of overweight and obesity among females could potentially add about 10% (or $9.7 billion) to the estimated economic burden of depression.
    JEL: I1 I12 I18
    Date: 2011–05
  13. By: Slunge, Daniel (Department of Economics, School of Business, Economics and Law, Göteborg University); Ekbom, Anders (Department of Economics, School of Business, Economics and Law, Göteborg University); Loayza, F. (The World Bank, Environment Department); Guthiga, P. (Kenya Institute for Public Policy Research and Analysis (KIPPRA), Kenya); Nyangena, Wilfred (Kenya Institute for Public Policy Research and Analysis (KIPPRA), Kenya)
    Abstract: The Forest Carbon Partnership Facility has recently proposed the application of strategic environmental social assessment (SESA) for incorporating environmental and social considerations in the preparation of REDD+ initiatives. This paper discusses the potential contribution of SESA to REDD+ initiatives drawing on experiences from earlier attempts to large scale forestry sector reforms and a recent World Bank pilot program on strategic environmental assessment. The paper suggests that SESA can be a useful approach for strengthening institutions and governance needed for managing diverse environmental and social impacts related to REDD+. More specifically, SESA can enhance policy making and governance through raising attention to environmental and social priorities, strengthening constituencies for policy change and improving social accountability. In order for SESA to contribute to these outcomes it needs to be assured that broad national “ownership” is achieved and that it becomes part of a long-term policy learning process with repeated and sustained stakeholder interaction. Through strengthening constituencies in policy reform SESA can potentially reduce the risk of regulatory capture of REDD+ by vested interests and make institutional checks and balances more effective. An analysis of Kenyas process of preparing a national REDD+ strategy is used to illustrate our case in the paper. <p>
    Keywords: REDD; forest management; GHG emissions; governance; stakeholder participation; World Bank
    JEL: Q23 Q28 Q54
    Date: 2011–04–26
  14. By: Ruixue Jia (Institute for International Economic Studies, Stockholm University)
    Abstract: Does production technology adoption affect conflict? This paper studies this question with yearly historical data on weather, peasant revolts and the diffusion of sweet potatoes in China between 1470 and 1900. It shows that droughts increased peasant revolts by about 10% whereas the effect of floods was not significant. Moreover, the diffusion of a new crop, sweet potatoes, mitigated the effects of droughts on revolts.
    Date: 2011–01
  15. By: Dorothée Brécard (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Sterenn Lucas (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Nathalie Pichot (LAUREPS - CRPCC - Laboratoire de Psychologie Sociale. UHB - MEN : EA1285 - Université Rennes 2 - Haute Bretagne); Frédéric Salladaré (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272, CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes I - Université de Caen)
    Abstract: How are consumer attitudes towards eco-labeled products affected by a profusion of labels? This article provides both theoretical and empirical insight into this issue. Assuming that consumers perceive a label both as a sign of quality and of a particular characteristic of a product, we deduce theoretical determinants for preferences for three types of label: a health label, an eco-label and a fair trade label. Using a French survey on seafood products, the estimation of a rank-ordered multinomial logit with random intercepts shows a certain proximity between the profiles of pro-eco-label and pro-fair trade label consumers, whereas pro-health label individuals have a more distinct profile: The two former are more likely to be young men mainly concerned with fishing conditions, whereas the latter are older married women with children who pay attention to the product form. We relate preferences for labels to degree of altruism, environmental consciousness and other socio-economic features.
    Keywords: Environmental preferences ; contingent choice ; eco-label ; seafood.
    Date: 2011
  16. By: ciumag, anca; ciumag, marin
    Abstract: From the point of view of coal consumers, which is visible to the naked eye is the price and size and its size dynamics is necessary for attention to anyone, due the fact that directly or indirectly, everyone in the situation of power buyer. In the area of lignite extraction, it is maintaing the relationship between the cost and profit.The law of demand and supply makes also the demand causes by the price and also the obvious changes in demand lead to changes in production. Production cost level is the critical threshold of profitability and as such, the manufacturers will be willing to supply at a price below cost. Dependence of the price arises also to the cost. At the same time, between the costs and profits, there is an inverse relationship. In order to maximize profits, in the extraction of lignite areas, is required to identify solutions to reduce production costs.
    Keywords: cost; price; profit; lignite; production
    JEL: M41
    Date: 2010–11–27
  17. By: Jason West
    Keywords: Commodities, convenience yield, forward markets
    JEL: C53 G14 Q41
    Date: 2011–02
  18. By: Akgun, A.A.; Baycan Levent, T.; Nijkamp, P.
    Date: 2011
  19. By: Tol, Richard S. J.
    Abstract: This paper uses a vote-counting procedure to estimate the probability density function of the total economic impact as a parabolic function of global warming. There is a wide range of uncertainty about the impact of climate change up to 3ºC, and the information becomes progressively more diffuse beyond that. Warming greater than 3ºC most likely has net negative impacts, and warming greater than 7ºC may lead to a total welfare loss. The expected value of the social cost of carbon is about $29/tC in 2015 and rises at roughly 2% per year.
    Keywords: Climate change/uncertainty/impacts/Social cost of carbon/cost
    Date: 2011–04
  20. By: Nunes, P.A.L.D.; Nijkamp, P.
    Date: 2011
  21. By: Naidu, Sirisha C.
    Abstract: This paper reports the results of a statistical investigation of the relationship between labor time expended in rural livelihoods, social structure, and community forest management. The object is to understand the impact of labor constraints to collective action. There are three main results. First, increasing time burden of work has a negative impact on collective forest management. Second, the gendered nature of work imposes a high burden on women and hence impedes their ability to participate in collective management even if incentives exist. In addition, lower access to social infrastructure further increases work burdens and decreases ability to participate. Finally, high levels of wealth lead to lower individual participation but this not because of high opportunity of time worked.
    Keywords: time use; collective action; gender; forests; South Asia; India
    JEL: Q23 D71 J22 B54
    Date: 2011–02
  22. By: Boyd, James (Resources for the Future); Brookshire, David S.
    Abstract: This paper describes specific ways in which the analysis of ecosystem goods and services can be included in terrestrial carbon sequestration assessments and planning. It specifically reviews the U.S. Geological Survey’s LandCarbon assessment methodology for ecosystem services. The report assumes that the biophysical analysis of co-effects should be designed to facilitate social evaluation. Accordingly, emphasis is placed on natural science strategies and outputs that complement subsequent economic and distributional analysis.
    Keywords: ecosystem services, carbon sequestration, land use planning
    Date: 2011–05–20

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