New Economics Papers
on Agricultural Economics
Issue of 2011‒08‒29
sixteen papers chosen by

  1. Designing Impact Evaluations for Agricultural Projects By Paul Winters; Lina Salazar; Alessandro Maffioli
  2. Price Analysis, Risk Assessment, and Insurance for Organic Crops By Ariel Singerman; Chad E. Hart; Sergio H. Lence
  3. Impact of Tissue Culture Banana Technology on Farm Household Income and Food Security in Kenya By Nassul S. Kabunga; Thomas Dubois; Matin Qaim
  4. The costs and benefits of intensive forest management By Brännlund, Runar; Carlén, Ola; Lundgren, Tommy; Marklund, Per-Olov
  5. How Will the Food Price Shock Affect Inflation in Latin America and the Caribbean? By Eduardo Lora; Andrew Powell; Pilar Tavella
  6. How the West 'Invented' Fertility Restriction By Nico Voigtländer; Hans-Joachim Voth
  7. Environmental and gender impacts of land tenure regularization in Africa : pilot evidence from Rwanda By Ali, Daniel Ayalew; Deininger, Klaus; Goldstein, Markus
  8. Assessing the welfare effects of promoting biomass growth and the use of bioenergy – A simple back-of-an-envelope calculation By Lundgren, Tommy; Marklund, Per-Olov
  9. Municipal solid waste management in small towns : an economic analysis conducted in Yunnan, China By Wang , Hua; He, Jie; Kim, Yoonhee; Kamata, Takuya
  10. Measuring Regional Economic Impacts from Wildfire: Case Study of Southeast Oregon Cattle-Ranching Business By Man-Keun Kim; Erqian Julia Zhu; Thomas R. Harris; Jonathan E. Alevy
  11. Evaluating the forecasting performance of commodity futures prices By Trevor A. Reeve; Robert J. Vigfusson
  12. Trade-Related Measures Based on Processes and Production Methods in the Context of Climate-Change Mitigation By Evdokia Moïsé; Ronald Steenblik
  13. France's Environmental Policies: Internalising Global and Local Externalities By Balázs Égert
  14. The Economic Integration of Forced Migrants – Evidence for Post-War Germany By Thomas K. Bauer; Sebastian Braun; Michael Kvasnicka
  15. Valuing water quality improvement in China : a case study of lake Puzhehei in Yunnan province By Wang, Hua; Shi, Yuyan; Kim, Yoonhee; Kamata, Takuya
  16. Agricultural Progress and Poverty Reduction: Synthesis Report By Joe Dewbre; Dalila Cervantes-Godoy; Silvia Sorescu

  1. By: Paul Winters; Lina Salazar; Alessandro Maffioli
    Abstract: The purpose of this guideline is to provide suggestions on designing impact evaluations for agricultural projects, particularly projects that directly target farmers, and seek to improve agricultural production, productivity and profitability. Specific issues in evaluating agricultural projects are addressed, including the need to use production-based indicators and to carefully consider indirect or spillover effects that are common in agricultural projects.
    Keywords: Agriculture & Food Security, Agriculture & Food Security :: Agricultural Policy, Rural & Urban Development :: Rural Development, Impact Evaluation, Agriculture, Technology Adoption, Development Effectiveness, Dominican Republic, PACTA, Nicaragua, APAGRO Program, Cotton Farmers Peru, PROCAMPO, Mexico.
    Date: 2010–12
  2. By: Ariel Singerman; Chad E. Hart; Sergio H. Lence
    Abstract: In recent years, the organic sector has grown steadily and significantly. However, little economic research has been performed on risk management in organic agriculture, likely because of the lack of available data. This lack of data may also be why the creation of the current crop insurance policy for organic farmers has been so ad hoc. The Agricultural Risk Protection Act of 2000 recognized organic farming as a “good farming practice,†making federal crop insurance coverage available for organic crops, and taking into account the idiosyncrasies of the organic production system. In addition to the production risks covered for conventional producers, organic farmers who sign up for coverage are compensated for production losses from damage due to insects, disease, and/or weeds. However, the incorporation of organic production into the crop insurance rating structure has been limited. Organic producers are charged an arbitrary 5% premium surcharge over conventional crop insurance. The actuarial fairness of this premium is, at least, questionable. In addition, in the case of crop failure, organic farmers receive compensation based on the prices of conventionally produced crops. Thus, price premiums that organic producers are able to obtain in the market are not compensated for under the current insurance policy structure. The Food, Conservation and Energy Act of 2008, which amends part of the Federal Crop Insurance Act, was written to investigate some of these claims, requiring the U.S. Department of Agriculture to examine the currently offered federal crop insurance coverage for organic crops as described in the organic policy provisions of the Act (Title XII). Such provisions established the need to review, among other things, the underwriting risk and loss experience of organic crops; determine whether significant, consistent, or systematic variations in loss history exist between organic and nonorganic production; and modify the coverage for organic crops in accordance with the results. Here we present the major findings of three analyses we performed on key elements of the insurance of organic crops—prices, yields, and revenue—in an effort to contribute to the design of an organic crop insurance policy that covers organic producers according to their idiosyncratic risks.
    Keywords: crop insurance, organic agriculture.
    Date: 2011–08
  3. By: Nassul S. Kabunga (Georg-August-University Göttingen); Thomas Dubois (International Institute of Tropical Agriculture (IITA)); Matin Qaim (Georg-August-University Göttingen)
    Abstract: While tissue culture (TC) technology for vegetative plant propagation is gradually gaining in importance in Africa, rigorous ex post assessments of welfare effects for smallholder farm households is lacking. Using recent survey data and accounting for self-selection in technology adoption, we analyze the impacts of TC banana technology on household income and food security in Kenya. To assess food security outcomes, we employ the Household Food Insecurity Access Scale (HFIAS) – a tool that has not been used for impact assessment before. Estimates of treatment-effects models show that TC banana adoption increases farm and household income by 153% and 50%, respectively. The technology also reduces relative food insecurity in a significant way. These results indicate that TC technology can be welfare enhancing for adopting farm households; its use should be further promoted through upscaling appropriate technology delivery systems.
    Keywords: Technology adoption; tissue culture; impact assessment; household income; food security
    Date: 2011–08–22
  4. By: Brännlund, Runar (CERE); Carlén, Ola (Dept. of Forest Economics); Lundgren, Tommy (CERE); Marklund, Per-Olov (CERE)
    Abstract: This paper presents an approach for studying the socio-economic benefits and costs (CBA) of the introduction of intensified management measures in forestry. Besides from valuation of changes in timber production, assessments of different types of externalities are included in them assessment. The model is exemplified with the use of data from a Swedish governmental study undertaken in 2009 which present impacts on the Swedish forest sector if intensified management measures are applied on environmentally low-valued land and abandoned agricultural lands. The CBA shows that intensified management measures typically are private financially profitable. If these measures also become profitable from the society’s point of view depend on the size of the external effects including carbon balance.
    Keywords: Cost-benefit analysis; external effect; timber production; carbon sequestration; fuel substitution
    JEL: Q23 Q42
    Date: 2011–08–22
  5. By: Eduardo Lora; Andrew Powell; Pilar Tavella
    Abstract: There is widespread concern that recent increases in international food prices may have significant effects on domestic food prices and inflation. This note assesses the impact of the recent food price shock on food, non-food and consumer inflation in the countries of Latin American and the Caribbean (LAC). Vector Autoregressive Regressions (VARs) are estimated for each country to trace the effect of international food prices, the price of oil and the value of the US dollar on domestic prices. The results are then used to calculate the potential impact of higher food prices and to project the expected rise in domestic prices to the end of 2011 and beyond, given the actual increase in food prices until February 2011. It is concluded that, due to the food price surge, increases in inflation could exceed 5 percentage points in Bolivia, Dominican Republic, Guatemala and Honduras unless additional policy actions are taken. In some countries with flexible exchange rate systems, such as Brazil, Colombia and Mexico, currencies tend to appreciate as a response to higher food prices and as a result the impact on domestic prices is muted. However, there is no simple pattern of differences between floaters and fixers; the speed and extent of pass-through is quite heterogeneous and dependent on factors such as the importance of food in the overall inflation index and local policy measures.
    JEL: E37 F41 F47
    Date: 2011–04
  6. By: Nico Voigtländer; Hans-Joachim Voth
    Abstract: Europeans restricted their fertility long before the 'Demographic Transition.' By raising the marriage age of women and ensuring that a substantial proportion remained celibate, the "European Marriage Pattern" (EMP) reduced childbirths by up to 40% between the 14th and 18th century. In a Malthusian environment, this translated into lower population pressure, raising average wages significantly, which in turn laid the foundation for industrialization. We analyze the rise of this first socio-economic institution in history that limited fertility through delayed marriage. Our model emphasizes changes in agricultural production following the Black Death in 1348-50. The land-intensive production of meat, wool, and dairy (pastoral products) increased, while labor-intensive grain production declined. Women had a comparative advantage producing pastoral goods. They often worked as servants in husbandry, where they remained unmarried long after they had left the parental household. The emergence of EMP enabled Europe to shift from a high-fertility, low income to a low-fertility, high income Malthusian steady state. We demonstrate the importance of this effect in a calibration of our model and show why the same shock to population did not have similar consequences in China.
    JEL: E20 N13 N33 O14 O41
    Date: 2011–08
  7. By: Ali, Daniel Ayalew; Deininger, Klaus; Goldstein, Markus
    Abstract: Although increased global demand for land has led to renewed interest in African land tenure, few models to address these issues quickly and at the required scale have been identified or evaluated. The case of Rwanda's nation-wide and relatively low-cost land tenure regularization program is thus of great interest. This paper evaluates the short-term impact (some 2.5 years after completion) of the pilots undertaken to fine-tune the approach using a geographic discontinuity design with spatial fixed effects. Three key findings emerge from the analysis. First, the program improved land access for legally married women (about 76 percent of married couples) and prompted better recordation of inheritance rights without gender bias. Second, the analysis finds a very large impact on investment and maintenance of soil conservation measures. This effect was particularly pronounced for female headed households, suggesting that this group had suffered from high levels of tenure insecurity, which the program managed to reduce. Third, land market activity declined, allowing rejection of the hypothesis that the program caused a wave of distress sales or widespread landlessness by vulnerable people. Implications for program design and policy are discussed.
    Keywords: Common Property Resource Development,Banks&Banking Reform,Municipal Housing and Land,Urban Housing,Rural Land Policies for Poverty Reduction
    Date: 2011–08–01
  8. By: Lundgren, Tommy (CERE); Marklund, Per-Olov (CERE)
    Abstract: Using a growth model that accounts for environmental and climate externalities, we take a closer look at the welfare e¤ects of promoting biomass growth and the use of bioenergy. As an illustration, a forest hypothetical intensive forest cultivation project is simulated. Costs and benefi…ts of the project show that we need not only determine the postive effects of promoting biomass growth and the use of bioenergy, such as substitution away from fossil fuels and carbon sequestration. But more importantly, to achieve a balanced measure of the e¤ects on the climate, we must also incorporate all carbon emissions that is associated with bioenergy. Not doing so will overestimate the positive climate e¤ects of increasing the use of bioenergy.
    Keywords: Bioenergy
    JEL: Q23 Q42
    Date: 2011–08–22
  9. By: Wang , Hua; He, Jie; Kim, Yoonhee; Kamata, Takuya
    Abstract: Municipal solid waste management continues to be a major challenge for local governments in both urban and rural areas across the world, and one of the key issues is their financial constraints. Recently an economic analysis was conducted in Eryuan, a poor county located in Yunnan Province of China, where willingness to pay for an improved solid waste collection and treatment service was estimated and compared with the project cost. This study finds that the mean willingness to pay is about 1 percent of household income and the total willingness to pay can basically cover the total cost of the project. The analysis also shows that the poorest households in Eryuan are not only willing to pay more than the rich households in terms of income percentage in general, but also are willing to pay no less than the rich in absolute terms where no solid waste services are available; the poorest households have stronger demand for public solid waste management services while the rich have the capability to take private measures when public services are not available.
    Keywords: Urban Solid Waste Management,Environmental Economics&Policies,Waste Disposal&Utilization,Energy and Environment,Environment and Energy Efficiency
    Date: 2011–08–01
  10. By: Man-Keun Kim (Department of Applied Economics, Utah State University); Erqian Julia Zhu (Department of Finance, Beijing Language and Culture University); Thomas R. Harris (Department of Resource Economics, University of Nevada Reno); Jonathan E. Alevy (Department of Economics, University of Alaska Anchorage)
    Keywords: public grazing, regional economic impact, Social Accounting Matrix, Southeast Oregon, wildfire
    Date: 2011
  11. By: Trevor A. Reeve; Robert J. Vigfusson
    Abstract: Commodity futures prices are frequently criticized as being uninformative for forecasting purposes because (1) they seem to do no better than a random walk or an extrapolation of recent trends and (2) futures prices for commodities often trace out a relatively flat trajectory even though global demand is steadily increasing. In this paper, we attempt to shed light on these concerns by discussing the theoretical relationship between spot and futures prices for commodities and by evaluating the empirical forecasting performance of futures prices relative to some alternative benchmarks. The key results of our analysis are that futures prices have generally outperformed a random walk forecast, but not by a large margin, while both futures and a random walk noticeably outperform a simple extrapolation of recent trends (a random walk with drift). Importantly, however, futures prices, on average, outperform a random walk by a considerable margin when there is a sizeable difference between spot and futures prices.
    Keywords: Commodity futures ; Futures market ; Prices ; Economic forecasting
    Date: 2011
  12. By: Evdokia Moïsé; Ronald Steenblik
    Abstract: This paper provides an overview of existing measures relating to non-product-related processes and production methods (PPMs) adopted in the context of climate-change-mitigation policies, especially those linked to the life-cycle greenhouse-gas (GHG) emissions of particular products. Such domestic PPM-related requirements and schemes are important policy tools for promoting sustainable development and are aimed at addressing GHG emissions resulting from the activities involved in producing, processing and transporting the product to the final consumer. Their ostensive purpose is to promote better environmental outcomes and to ensure that domestic climate-change policies and incentives do not inadvertently undermine other environmental objectives. Even though the general objectives of the reviewed regulations and private schemes are comparable (e.g. the promotion of renewable-energy sources, or provision of information on the carbon footprint of goods), the approaches, level of detail, choices of instruments and targeted environmental characteristics vary considerably from country to country and from scheme to scheme. Some regulations rely more or less extensively on market mechanisms, attaching price premiums to certain types of products. Others introduce command-and-control provisions limiting the use of certain PPMs, variously defined in different countries. Still others target certain types of fuels eligible for public support, with varying eligibility criteria. Private schemes mainly use environmental sustainability claims to secure consumer preference. The choice of different instruments presumably entails different trade impacts. However, all of the reviewed measures and schemes are fairly new, and experience with their application and therefore their potential trade effects has so far been relatively limited.
    Keywords: trade policy, trade and environment, environmental provisions, processes and production methods
    JEL: F13 F18 N50 Q56
    Date: 2011–08–03
  13. By: Balázs Égert
    Abstract: The authorities have a very ambitious environmental-policy agenda, aimed chiefly at cutting greenhouse gas (GHG) emissions but also at dealing with local air and water pollution, waste management and the conservation of biodiversity. The laws that followed the Grenelle de l?environnement encompass policy measures in energy generation, manufacturing, transport, waste management, construction and agriculture to encourage a transition towards a low-carbon economy. The government is committed to an ambitious GHG reduction objective of 75% to be achieved by 2050. This paper evaluates its policies in terms of cost effectiveness, with a special emphasis on: how to impose a unique carbon price in the aftermath of the rejection of the carbon tax by the Constitutional Council; the challenges relating to renewable and nuclear electricity generation; the ways to reduce carbon intensity in the residential and transport sectors; how to improve waste management; and whether external costs related to the use of fertilisers and pesticides are properly accounted for in water management. Whereas considerable progress has been made to “green” the economy, an important challenge that remains is to internalise global and local externalities in all sectors of the economy so as to increase the cost-effectiveness of environmental policies.
    Keywords: global warming, GHG emissions, environmental policies, carbon price, abatement cost, renewables, nuclear power, negative externalities, water pollution, waste management
    JEL: H23 Q41 Q42 Q48 Q52 Q53 Q54 Q58
    Date: 2011–04–22
  14. By: Thomas K. Bauer; Sebastian Braun; Michael Kvasnicka
    Abstract: The fl ight and expulsion of Germans from Eastern Europe during and after World War II constitutes one of the largest forced population movements in history. We analyze the economic integration of these forced migrants and their off spring in West Germany. The empirical results suggest that even a quarter of a century after displacement, fi rst generation migrants and native West Germans that were comparable before the war perform strikingly diff erent. Migrants have substantially lower incomes and are less likely to own a house or to be self-employed. Displaced agricultural workers, however, have signifi cantly higher incomes. This income gain can be explained by faster transitions out of low-paid agricultural work. Diff erences in the labor market performance of second generation migrants resemble those of the fi rst generation. We also fi nd that displacement considerably weakens the intergenerational transmission of human capital between fathers and children, especially at the lower tail of the skill distribution.
    Keywords: Forced migration; economic integration; World War II; West Germany
    JEL: J61 O15 R23
    Date: 2011–07
  15. By: Wang, Hua; Shi, Yuyan; Kim, Yoonhee; Kamata, Takuya
    Abstract: While polluted surface water is encountered across most of China, few economic valuation studies have been conducted on water quality changes. Limited information about the economic values associated with those potential water quality improvements or deteriorations is a disadvantage for making proper choices in water pollution control and clean-up activities. This paper reports an economic valuation study conducted in Yunnan, China, which aims to estimate the total value of a real investment project to improve the water quality of Lake Puzhehei by one grade level. Located in Qiubei County, which is far from large cities, the lake has been experiencing fast water quality deterioration in the past years. A conservative estimation strategy shows that on average a household located in Qiubei County is willing to pay about 30 yuan per month continuously for 5 years for water quality improvement, equivalent roughly to 3 percent of household income. The elasticity of willingness-to-pay with respect to income is estimated to be 0.21. The economic rate of return of the proposed project is estimated to be 18 percent, indicating a strong demand and high efficiency of investment in water quality improvement in China. This study also demonstrates that previous knowledge about water quality changes and the project may have a significant positive impact on people's valuation, and that the interviewer effect on valuation can be negative.
    Keywords: Water and Industry,Environmental Economics&Policies,Water Supply and Sanitation Governance and Institutions,Town Water Supply and Sanitation,Water Supply and Systems
    Date: 2011–08–01
  16. By: Joe Dewbre; Dalila Cervantes-Godoy; Silvia Sorescu
    Abstract: Achieving the Millennium Development Goal to halve global poverty by 2015 looks increasingly likely, although many countries may fall far short of this goal. This study compares socio-economic characteristics of twenty-five countries that have posted exceptional progress in reducing poverty to better understand why some countries are doing better than others. Three key questions were addressed: 1) Is agriculture more important than other sources of earned income in reducing poverty? 2) Are the countries most successful in reducing poverty similar in other ways? 3) Which government policy actions seem to have contributed most? Both the overall rate and the sectoral composition of economic growth matter for poverty reduction, but remittances and other kinds of financial transfers are also important sources of income for the poor. The sectoral pattern of growth changes systematically as countries develop, posing challenges for governments searching for the best balance of macroeconomic, social and sectoral policies to foster poverty reduction.
    Keywords: growth, agriculture, poverty, remittances
    Date: 2011–08–10

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