nep-agr New Economics Papers
on Agricultural Economics
Issue of 2011‒06‒04
25 papers chosen by
Angelo Zago
University of Verona

  1. Producer Preference for Land-Based Biological Carbon Sequestration in Agriculture: An Economic Inquiry By Jiang, Yong; Koo, Won
  2. Why Don't Farmers Adopt Precision Farming Technologies in Cotton Production? By Paudel, Krishna P.; Pandit, Mahesh; Mishra, Ashok; Segarra, Eduardo
  3. Identifying the Effect of Weather Variation on Crop Yield in the Northern Plains By Jiang, Yong; Koo, Won
  4. Brazilian biofuels policies and impacts on world agricultural trade By de Miranda, Sílvia Helena G.; Blandford, David; Abler, David G.
  5. A Dynamic Adoption Model with Bayesian Learning: Application to the U.S. Soybean Market By Ma, Xingliang; Shi, Guanming
  6. The Impact of the New York State Retail Milk Price Regulation on Farm-to-Retail Price Transmission and Supermarket Pricing Strategies in Metropolitan Fluid Milk Markets By Bolotova, Yuliya; Novakovic, Andrew
  7. Assessing the Opportunity Cost of Growing a Bioenergy Crop in California: a PMP Approach By Yi, Fujin; Merel, Pierre; Lee, Juhwan; Six, Johan
  8. Benefit-Cost Assessment of Different Homestead Vegetable Gardening on Improving Household Food and Nutrition Security in Rural Bangladesh By Asaduzzaman, Md; Naseem, Anwar; Singla, Rohit
  9. Public and Private Institutional Responses to Advocacy Attacks: The Case of the Global Cocoa Industry and Child Labour Abuse By Clark, Alexandra; Gow, Hamish
  10. Estimating the Change In Total Production Expenses for the Major Row Crops as Fuel Prices Change By Ibendahl, Gregory
  11. Economic feasibility of converting cow manure to electricity: A case study of the CVPS Cow Power program in Vermont By Wang, Qingbin; Thompson, Ethan; Parsons, Robert
  12. Incorporating Climate Uncertainty into Estimates of Climate Change Impacts, with Applications to U.S. and African Agriculture By Marshall Burke; John Dykema; David Lobell; Edward Miguel; Shanker Satyanath
  13. Measuring the economic efficiency of Italian agricultural enterprises By Darina Zaimova
  14. Climate Change and Agriculture In South Asia: Looking for An Optimal Trade Policy By Laborde, David
  15. Time-varying Yield Distributions and the U.S. Crop Insurance Program By Zhu, Ying; Goodwin, Barry; Ghosh, Sujit
  16. A Comparison of Price Imputation Methods under Large Samples and Different Levels of Censoring. By Lopez, Jose A.
  17. Can economic crises be good for your diet? By Ralitza Dimova; Ira N. Gang; Monnet Gbakou; Daniel Hoffman
  18. The Long Trace of Inequality: Evidence from Cundinamarca, Colombia By Juan Sebastián Galán
  19. Public Economic Benefits of Reducing Salinity Discharges: Evidence from Californiaâs San Joaquin Valley By Kling, David; Larson, Douglas
  20. Distributional Impacts of Carbon Pricing: A General Equilibrium Approach with Micro-Data for Households By Sebastian Rausch; Gilbert E. Metcalf; John M. Reilly
  21. Minnesota Farm Real Estate Sales: 1990-2010 By Taff, Steven J.
  22. The Economic Impact of the Horse Industry in Virginia By Terance J. Rephann
  23. Using Frontier Models to Mitigate Omitted Variable Bias in Hedonic Pricing Models: A Case Study for Air Quality in Bogotá, Colombia By Fernando Carriazo; Richard Ready; James Shortle
  24. The development of the brazilian amazon region and greenhouse gases emission: a dilemma to be faced! By Imori, Denise; Guilhoto, Joaquim José Martins; David, Leticia Scretas; Gutierre, Leopoldo Millan; Waisman, Caio
  25. Cost Efficiency and Scale Economies of Japanese Water Utilities By Theara Horn; Hitoshi Saito

  1. By: Jiang, Yong; Koo, Won
    Abstract: This study was intended to develop an understanding of producer preference for land-based carbon sequestration in agriculture. We conducted a mail survey to elicit producer choice to provide marketable carbon offsets by participating in different carbon credit programs characterized by varying practices. Based on a quantitative analysis, we found that: 1) the market price for carbon offsets could increase producer participation in carbon sequestration; 2) producers perceived differentially different but correlated private costs for adopting carbon sequestering practices, depending on production attributes; and 3) relatively high carbon prices would be needed to stimulate producer provision of carbon offsets by land-based carbon sequestration activities. A simulation of producer choice with agricultural census data estimated potential carbon offsets supply in the Northern Great Plains region. This study contributes to the economic understanding of agricultural potential for greenhouse gas mitigation.
    Keywords: greenhouse gas, carbon sequestration, producer stated preferences, agriculture, economics, carbon offsets, carbon markets, Agricultural and Food Policy, Environmental Economics and Policy, Farm Management, Land Economics/Use, Production Economics, Resource /Energy Economics and Policy, Q54, Q52, Q58,
    Date: 2011
  2. By: Paudel, Krishna P.; Pandit, Mahesh; Mishra, Ashok; Segarra, Eduardo
    Abstract: We used the 2009 Southern Cotton Precision Farming Survey data collected from farmers in twelve U.S. states (Alabama, Arkansas, Florida, Georgia, Louisiana, Missouri, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia) to understand why farmers do not adopt seemingly profitable precision farming technology. Farmers provided cost, time constraint, satisfaction with the current practice and other as reasons for not adopting precision farming technology. Results from a multinomial logit regression model indicated that manure application on field, more formal education, larger farm size, participation in conservation easement or agricultural easement generally decreases the probability of nonadoption of precision agriculture in cotton production.
    Keywords: precision agriculture, technology adoption, multinomial logit, Crop Production/Industries, Farm Management, Research and Development/Tech Change/Emerging Technologies, C25, Q16,
    Date: 2011
  3. By: Jiang, Yong; Koo, Won
    Keywords: weather, production, crop yield, agriculture, economics, Crop Production/Industries, Land Economics/Use, Production Economics, Productivity Analysis, Resource /Energy Economics and Policy,
    Date: 2011
  4. By: de Miranda, Sílvia Helena G.; Blandford, David; Abler, David G.
    Keywords: Agricultural and Food Policy, Resource /Energy Economics and Policy,
    Date: 2011
  5. By: Ma, Xingliang; Shi, Guanming
    Abstract: Agricultural technology adoption is often a sequential process. Farmers may adopt a new technology in part of their land first and then adjust in later years based on what they learn from the earlier partial adoption. This paper presents a dynamic adoption model with Bayesian learning, in which forward-looking farmers learn from their own experience and from their neighbors about the new technology. The model is compared to that of a myopic model, in which farmers only maximize their current benefits. We apply the analysis to a sample of U.S. soybean farmers from year 2000 to 2004 to examine their adoption pattern of a newly developed genetically modified (GM) seed technology. We show that the myopic model predicts lower adoption rates in early years than the dynamic model does, implying that myopic farmers underestimate the value of early adoption. My results suggest that farmers in my sample are more likely to be forward-looking decision makers and they tend to rely more on learning from their own experience than learning from their neighbors.
    Keywords: technology adoption, Bayesian learning, structural estimation, Agribusiness, Agricultural and Food Policy, Crop Production/Industries, Industrial Organization, Production Economics, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, Risk and Uncertainty, Teaching/Communication/Extension/Profession,
    Date: 2011
  6. By: Bolotova, Yuliya; Novakovic, Andrew
    Abstract: The New York State Milk Price Gouging Law establishes that the retail prices of fluid milk products are not to exceed 200% of the prices that NYS milk processors py for Class I milk. The enforcement of this law significantly affected the nature of the Class I fluid milk price transmission process and the milk pricing strategies of supermarkets in the five largest cities in New York State: New York City, Albany, Syracuse, Buffalo and Rochester. During the pre-law period, supermarkets used a retail price-stabilization strategy, as evidenced by asymmetric Class I fluid milk price transmission. In contrast, supermarkets use a retail profit stabilization strategy during the law period. This variation of retail milk price control actually creates an institutional environment that facilitates cooperative conduct of supermarkets, acting in an oligopolistic market environment, which caused greater instability in retail milk prices. Differences in the competitive environments of each city impact the effects of the statewide law.
    Keywords: dairy, milk, price regulation, price transmission, asymmetric price response, food retailing, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Industrial Organization, Marketing, Q11, Q13, Q18,
    Date: 2011
  7. By: Yi, Fujin; Merel, Pierre; Lee, Juhwan; Six, Johan
    Abstract: A significant increase in demand for fuel ethanol in California should be expected if all gasoline sold in the state were to be blended with 10% ethanol, as envisaged in the State Alternative Fuels Plan. This paper assesses the potential of California agriculture to supply biofuel feedstock in the form of switchgrass. We construct a fully calibrated, multi-region, multi-input and multi-output model of agricultural supply for Californiaâs Central Valley based on the principles of Positive Mathematical Programming. We exploit the biogeochemical model DAYCENT to estimate production functions for switchgrass in each agricultural region. We then predict the extent and location of potential switchgrass production in the Central Valley. Our results suggest that adoption rates differ widely among regions, meaning that the location of processing plants may be an important issue. They also suggest that switchgrass adoption is not likely to displace specialty crops by much. From a purely methodological standpoint, this study illustrates the complementarity of agronomic and economic information for the calibration of economic optimization models meant to capture farmer behavior at the regional scale.
    Keywords: California agriculture, bioenergy crop, opportunity cost, positive mathematical programming, Crop Production/Industries, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,
    Date: 2011
  8. By: Asaduzzaman, Md; Naseem, Anwar; Singla, Rohit
    Keywords: Community/Rural/Urban Development, Food Security and Poverty,
    Date: 2011–05
  9. By: Clark, Alexandra; Gow, Hamish
    Abstract: Over the past decade the global agri-food industry has come under increasing attack by advocacy groups related to their production and marketing processes (Bowmar and Gow, 2009). Advocacy groups have used these attacks to exploit the growing intergenerational disconnect between consumers and farming to campaign for narrowly defined political ideals while challenging traditional agricultural practices (Olin, 1999). This disconnect has provided advocacy groups the opportunity to use boycotts and other media attacks to severely adverse impact not only branded manufacturers and retailers, but their farmer suppliers. The agri-food industryâs challenge is to understand how to develop appropriate individual and collective responses to these attacks that minimize their current and future adverse impact and provide mutually beneficial outcomes for all of the channel members. Using an instrumental case study of the international cocoa and chocolate industryâs response to the child labour abuse and trafficking claims, we analyse and evaluate the alternative individual and collective responses that firms can implement to minimize their current and future adverse impact from advocacy attacks and provide mutually beneficial outcomes for all of the channel members. This paper follows a comparative institutional analysis methodology to analyse the multiple nested case studies and evaluate the impact and implications of each alternative.
    Keywords: Certification, Advocacy, Cocoa, Chocolate, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, International Development, Marketing,
    Date: 2011
  10. By: Ibendahl, Gregory
    Keywords: Crop Production/Industries,
    Date: 2011
  11. By: Wang, Qingbin; Thompson, Ethan; Parsons, Robert
    Abstract: A case study of the Central Vermont Public Service Corporation (CVPS) Cow Power program examines the economic feasibility for dairy farms to convert cow manure into electricity via anaerobic methane digestion. The study confirms that it is technically feasible to convert cow manure to electricity on dairy farms but the economic returns highly depend on the base electricity price paid by CVPS, premium rate paid by CVPS customers, financial supports from government agencies and other organizations, and sales of the by-products of methane generation. Lessons learned from this program will be useful to other dairy farms and communities interested in converting cow manure into electricity.
    Keywords: anaerobic digestion, dairy farms, renewable energy, economic feasibility, Vermont., Agricultural Finance, Consumer/Household Economics, Demand and Price Analysis, Environmental Economics and Policy, Farm Management, Research and Development/Tech Change/Emerging Technologies,
    Date: 2011
  12. By: Marshall Burke; John Dykema; David Lobell; Edward Miguel; Shanker Satyanath
    Abstract: A growing body of economics research projects the effects of global climate change on economic outcomes. Climate scientists often criticize these articles because nearly all ignore the well-established uncertainty in future temperature and rainfall changes, and therefore appear likely to have downward biased standard errors and potentially misleading point estimates. This paper incorporates climate uncertainty into estimates of climate change impacts on U.S. agriculture. Accounting for climate uncertainty leads to a much wider range of projected impacts on agricultural profits, with the 95% confidence interval featuring drops of between 17% to 88%. An application to African agriculture yields similar results.
    JEL: O13 Q11 Q54
    Date: 2011–05
  13. By: Darina Zaimova
    Abstract: Early microeconomic theory established its framework under the assumption that producers’ behaviour is optimal towards input allocation and output level. Since Debreu and Farrell this basic neoclassical approach has been extended, allowing for producers’ decisions to diverge from the optimum production choice. The generally accepted reason for production units no to be efficient regards the presence of technical or allocative inefficiency components in their production function. Therefore one of the main objectives of studying production and cost frontiers is to estimate their efficiency towards input utilization and allocation. This paper aims to measure the technical efficiency of agricultural enterprises in Italy during the period 2003 – 2007 by applying a stochastic frontier analysis to panel data. The developed two-sectored model distinguishes between agricultural production function and non-agricultural production function. The variables included in the first production function are related directly to the final product and are utilized during the production process. The non-agricultural production function includes two categories of variables: the first accounts for the general characteristics of the agricultural enterprises, while the second attempts to describe the opportunities and restrictions of the institutional framework.
    Keywords: agricultural enterprises, SFA model, stochastic frontier production models, technical efficiency
    JEL: C12 C23 C87
    Date: 2011
  14. By: Laborde, David
    Abstract: This paper aims to study how alternative trade policies will help mitigate the effects of climate change in agriculture in South Asia. We use a modified version of MIRAGE CGE for long term projections and allowing modeling of climate change effects (impact on yield) at a subregional level (163 geographical units at the world level) to simulate the effects of 13 SRES scenarios in 8 different trade policy landscapes. Based on these results, we discuss the ranking of trade policy options based on expected values but also in terms of variance using the theory of decision in uncertainty. Choices between unilateral and regional strategies for the countries of the sub regions are compared. Our results confirm that South Asia will be one of the most adversely affected regions in terms of the impacts of climate change on agricultural yield. Both the overall level of economic activity and trade flows will react to this change (-0.5 percent of real income for the region in average, up to -4 percent for Pakistan). Beyond national real income, we also look at the distributional effects of climate change. Unskilled worker real wages, proxy for poor people income, are largely and generally negatively impacted by climate change. We show that trade policies weakly affect the overall economic impact of climate change but leads to more significant changes for the poor.
    Keywords: Climate Change, Trade Policy, Computable General Equilibrium, Environmental Economics and Policy, International Relations/Trade, Q54, C68, N5, N75, O24, F13, Q11, Q17,
    Date: 2011
  15. By: Zhu, Ying; Goodwin, Barry; Ghosh, Sujit
    Abstract: The objective of this study is to evaluate and model the yield risk associated with major agricultural commodities in the U.S. We are particularly concerned with the nonstationary nature of the yield distribution, which primarily arises because of technological progress and changing environmental conditions. Precise risk assessment depends on the accuracy of modeling this distribution. This problem becomes more challenging as the yield distribution changes over time, a condition that holds for nearly all major crops. A common approach to this problem is based on a two-stage method in which the yield is first detrended and then the estimated residuals are treated as observed data and modeled using various parametric or nonparametric methods. We propose an alternative parametric model that allows the moments of the yield distributions to change with time. Several model selection techniques suggest that the proposed time-varying model outperforms more conventional models in terms of in-sample goodness-of-fit, out-of- sample predictive power and the prediction accuracy of insurance premium rates.
    Keywords: Risk and Uncertainty,
    Date: 2011
  16. By: Lopez, Jose A.
    Keywords: Consumer/Household Economics, Demand and Price Analysis, Research Methods/ Statistical Methods, imputation methods, multiple imputation, censored prices, protein demand, elasticities,
    Date: 2011–05
  17. By: Ralitza Dimova; Ira N. Gang (Osteuropa-Institut, Regensburg (Institut for East European Studies)); Monnet Gbakou; Daniel Hoffman
    Abstract: With fortuitously timed data - collected before, during and after a major macro-financial crisis in Bulgaria - we revisit several hypotheses in the economics and nutritional literature related to the tendency of households to smooth their nutritional status over time. We explore the dietary impact of both falling real incomes in the context of hyperinflation and crisis and changing relative prices and the changing responsiveness of different groups of people to these incomes and prices over six year of fundamental structural reforms of the economy. Our results highlight large and dramatically changing food and nutrient elasticities, which challenge the perception of household ability to smooth their nutrient stream during economic crises and transitions.
    Keywords: Crisis, Diet, Fluctuation, Health, Nutrition
    JEL: E32 I12 P23 P24 P36
    Date: 2011–03
  18. By: Juan Sebastián Galán
    Abstract: This paper uses historic data from Cundinamarca, Colombia to empirically assess the impact of land inequality persistence, inherited from the colonial rule, on economic development in the long run. Based on the Engerman & Sokoloff hypothesis and the use of GIS, I use plausible exogenous variation in land endowments to design an instrumental variable strategy. In contrast to recent studies, I find that more unequal municipalities in the XIX and XX century are associated with better growth, human capital and public goods provision measures today. Political economy channels instead of agricultural productivity gains can explain these results. In municipalities where land was historically more concentrated, powerful landowners were more successful in solving their collective action problem of accessing political power to influence the allocation economic resources in their interests.
    Date: 2011–02–27
  19. By: Kling, David; Larson, Douglas
    Keywords: Environmental Economics and Policy,
    Date: 2011–05–16
  20. By: Sebastian Rausch; Gilbert E. Metcalf; John M. Reilly
    Abstract: Many policies to limit greenhouse gas emissions have at their core efforts to put a price on carbon emissions. Carbon pricing impacts households both by raising the cost of carbon intensive products and by changing factor prices. A complete analysis requires taking both effects into account. The impact of carbon pricing is determined by heterogeneity in household spending patterns across income groups as well as heterogeneity in factor income patterns across income groups. It is also affected by precise formulation of the policy (how is the revenue from carbon pricing distributed) as well as the treatment of other government policies (e.g. the treatment of transfer payments). What is often neglected in analyses of policy is the heterogeneity of impacts across households even within income or regional groups. In this paper, we incorporate 15,588 households from the U.S. Consumer and Expenditure Survey data as individual agents in a comparative-static general equilibrium framework. These households are represented within the MIT USREP model, a detailed general equilibrium model of the U.S. economy. In particular, we categorize households by full household income (factor income as well as transfer income) and apply various measures of lifetime income to distinguish households that are temporarily low-income (e.g., retired households drawing down their financial assets) from permanently low-income households. We also provide detailed within-group distributional measures of burden impacts from various policy scenarios.
    JEL: H22 Q54 Q58
    Date: 2011–05
  21. By: Taff, Steven J.
    Abstract: This report is a summary of the data contained on the farmland sales portion of the Minnesota Land Economics (MLE) web site ( ) as of May 10, 2011. It is formally reissued each Spring, as new sales data become available. The present document consists largely of graphs and tables summarizing sales over the past twenty years. It provides averages at the multi-county region and at the statewide levels of aggregation. Individual transaction data are available for downloading and analysis at the MLE web site. An electronic version of the current report in fully navigable portable document format (pdf) is also available: .pdf.
    Keywords: Land Economics/Use,
    Date: 2011
  22. By: Terance J. Rephann (Center for Economic and Policy Studies)
    Abstract: This paper examines the economic impact of Virginia\'s horse industry using input-output analysis. Statewide impacts are further disaggregated into three categories: (1) expenditures on horse maintenance and support by horse owners and operations, (2) expenditures on horse shows and competitions, and (3) expenditures associated with pari-mutuel racing activities. Results indicate a total economic impact of 16,091 jobs and $670 million in value-added impact.
    Keywords: horse, racing, economic impact, input-output
    JEL: Q19 R00
    Date: 2011–04–04
  23. By: Fernando Carriazo; Richard Ready; James Shortle
    Abstract: Hedonic pricing models use property value differentials to value changes in environmental quality. If unmeasured quality attributes of residential properties are correlated with an environmental quality measure of interest, conventional methods for estimating implicit prices will be biased. Because many unmeasured quality measures tend to be asymmetrically distributed across properties, it may be possible to mitigate this bias by estimating a heteroskedastic frontier regression model. This approach is demonstrated for a hedonic price function that values air quality in Bogotá, Colombia.
    Date: 2011–03–20
  24. By: Imori, Denise; Guilhoto, Joaquim José Martins; David, Leticia Scretas; Gutierre, Leopoldo Millan; Waisman, Caio
    Abstract: The purpose of this work is to verify the existence of possible tradeoffs between policies direct to reduce the emissions of greenhouse gases (GHGs) with the ones direct to foster the development of the Brazilian Amazon Region, which is one of the poorest in the country. In order to achieve this goal, this paper uses an interregional input-output (I-O) model, estimated for the Brazilian economy for the year of 2004. The I-O model is used to make a comparison between the economical and the environmental relevance of each sector in the economies of the Amazon region and the rest of Brazil. This study considers the greenhouse gases emissions not only from the economic activities by itself, but, also for the more important factor of the land-use changes. This is a fact of most importance, given that in 2005, about 60% of the Brazilian GHGs emissions were due to the land-use change in its different biomes. Moreover, in the Brazilian Amazon region, especially in the last decades, the deforestation was linked mainly to economic factors than to policies conducted by the government. The results show that the sectors with the greatest importance in terms of emissions are cattle and soybean production. Also, they are also the most prominent for the region's economic development. This poses a dilemma that needs to be faced not only by Brazil, but also by the developed nations, as the burden of the reduction in the greenhouse gases emission in the Brazilian Amazon region cannot be only put on the poor population of the region!
    Keywords: Amazon Region; Greenhouse Gases; Brazil; Input-Output; Economic Development; Productive Structure; Deforestation
    JEL: O1 R1 D57 Q5
    Date: 2011
  25. By: Theara Horn (Graduate School of Economics, Osaka University); Hitoshi Saito (Graduate School of Economics, Osaka University)
    Abstract: With the data of 831 Japanese water utilities from 1999 to 2008, we used the stochastic cost frontier analysis with a true fixed-effect model in order to estimate the cost efficiency and scale economies. We found that cost inefficiency was approximately 37%. The economies of water delivery volume were observed and found to be remarkably higher for small water utilities than for large ones. Scale economies were also discovered in small water utilities; however, scale diseconomies are likely to be incurred in larger water utilities. The optimal supply population size of a water utility is estimated to be 85,658 consumers, with a water delivery volume of 15.7 million m3 and a network length of 522 km.
    Keywords: Cost Efficiency, Scale Economies, Optimal Size, Japanese Water Utilities
    JEL: H11 L38 L95
    Date: 2011–05

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