nep-agr New Economics Papers
on Agricultural Economics
Issue of 2011‒11‒01
twenty-six papers chosen by
Angelo Zago
University of Verona

  1. Adapting Crop Share Agreements for Sustainable and Organic Agriculture By Edwards, William M.
  2. Price expectations and price dynamics: the case of the rice sector in developing Asia By Thomas Barré
  3. The Impact of Information on the Willingness-to-Pay for Labeled Organic Food Products By Sandra Rousseau; Liesbet Vranken;
  4. Escalating Food Prices: The threat to poor households and policies to safeguard a Recovery for All By Isabel Ortiz; Jingqing Chai; Matthew Cummins
  5. Estimating Farm Machinery Costs By Edwards, William M.
  6. Your Farm Income Statement By Edwards, William M.
  7. Regulations, brokers, and interlinkages: The institutional organization of wholesale markets in India By Bart Minten; Anneleen Vandeplas; Johan F.M.Swinnen
  8. Food Subsidy, Income Transfer and the Poor: A Comparative Analysis of the Public Distribution System in India's States By Raghbendra Jha; Raghav Gaiha; Manoj K. Pandey; Nidhi Kaicker
  9. Acquiring Farm Machinery Services By Edwards, William M.
  10. Revenue Insurance for Livestock Producers By Edwards, William M.
  11. Water trading, buybacks and drought in the Murray-Darling basin: lessons from economic modelling By Glyn Wittwer; Peter Dixon
  12. Managing Farm Family Finances By Edwards, William M.; Fletcher, Cynthia Needles
  13. Lessons Learned from Implementing the Sustainable Development Program in the State of Acre in Brazil By Cristina Dengel; John Horton
  14. Yield Protection Crop Insurance By Edwards, William M.
  15. Food quality in domestic markets of developing economies:A comparative study of two countries By Anneleen Vandeplas; Bart Minten;
  16. SPS Capitalization into Land Value : Generalized Propensity Score Evidence from the EU By Pavel Ciaian; d'Artis Kancs; Jerzy Michalek
  17. Iowa Farm Custom Rate Survey By Edwards, William M.; Johanns, Ann M.
  18. Grain Storage Alternatives: An Economic Comparison By Edwards, William M.
  19. African cotton markets at crossroads : will the price spike turn into a new kick-start ? By Delpeuch, Claire
  20. Hail Damage Can Affect Crop Insurance Yields By Edwards, William M.
  21. Does One Size Fit All? Heterogeneity in the Valuation of Community Forestry Programs? By Dambala Gelo; Steven F. Koch
  22. A Theory of Rational Demand for Index Insurance By Daniel J. Clarke
  23. The elusive quest for supply response to cash-crop market reforms in Sub-Saharan Africa : the case of cotton By Delpeuch, Claire; Leblois, Antoine
  24. Transferring Breeding Livestock By Hofstrand, Donald; Edwards, William M.
  25. On the Identification of Production Functions: How Heterogeneous is Productivity? By Amit Gandhi; Salvador Navarro; David Rivers
  26. Revisiting the "cotton problem": A comparative analysis of cotton reforms in sub-Saharan Africa By Claire Delpeuch; Anneleen Vandeplas; Johan F.M.Swinnen

  1. By: Edwards, William M.
    Date: 2011–10–26
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34469&r=agr
  2. By: Thomas Barré (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Ministère de l'Education nationale, de l'Enseignement supérieur et de la Recherche - Université Paris XII Val de Marne : EA437 - Université Paris-Est)
    Abstract: Uncertainty is a crucial issue for producers who must make input decisions without knowing prices and without perfect knowledge of realized output. In this context, price expectations strongly determine the production choices and market prices that result from market-clearing conditions. This study analyzed the role that price expectations play in price dynamics, developing a theoretical model of trade in varieties following Armington (1969) and augmented with yield and price uncertainty to highlight several main determinants of domestic producer prices, including exchange rates, proximity to world markets, input prices, natural disasters, and producers' expectations. An econometric estimation of the rice sector, using a panel of 13 developing Asian countries during 1965-2003, confirmed that expectations count, with a 1% increase in the expected price resulting in a 1.18% decrease in the market price. A simulation exercise based on these empirical results demonstrated that forecasting errors are large. Specifically, Asian rice farmers have a 50% chance of making prediction errors of 10% or more on the final market price. This high error rate suggests the need for developing ways of sharing information, such as radio programs dedicated to agricultural producers or the introduction of futures markets, to stabilize agricultural incomes.
    Keywords: Rice ; Asia ; price dynamics ; price expectations ;
    Date: 2011–10–02
    URL: http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00630711&r=agr
  3. By: Sandra Rousseau; Liesbet Vranken;
    Abstract: Organic labels potentially play an important role in shaping consumer preferences for organic food products. Information implied by the presence of labels can be used by consumers to facilitate their consumption decisions. Therefore, we investigate the influence of the provision of objective information on the willingness-to-pay of consumers for labeled organic apples in Flanders (Belgium). Initially, we find that Flemish consumers are willing to pay a positive price premium of approximately 33 eurocent per kilogram for labeled organic apples. After the provision of information on the actual environmental and health effects of organic apple production, this price premium becomes even more pronounced and amounts to approximately 56 eurocent per kilogram.
    Keywords: organic food production, willingness-to-pay, choice experiment, role of information
    JEL: Q01 Q51 D12
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:lic:licosd:28411&r=agr
  4. By: Isabel Ortiz; Jingqing Chai; Matthew Cummins (Division of Policy and Practice,UNICEF)
    Abstract: This working paper: (i) briefly reviews possible causes of the food price spike that began in mid-2010; (ii) examines recent local food price movements in 58 developing countries during 2010; (iii) discusses the adverse impacts of food price increases on households; (iv) presents a rapid desk review of international and domestic policy responses in 98 developing countries under a three-pillar policy framework—supporting consumption, boosting production and regulating/managing food markets; and (v) calls for urgent and coordinated policy actions by national governments and the international community.
    Keywords: food price, commodity price,food inflation, food crisis, supply shock, exchange rate, export ban, commodity futures, hunger, malnutrition, poverty, inequality, import bills, subsidies, tariffs,food market regulation, crisis recovery, fiscal consolidation
    JEL: H I38 Q18
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:uce:wpaper:1101&r=agr
  5. By: Edwards, William M.
    Date: 2011–10–24
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34436&r=agr
  6. By: Edwards, William M.
    Date: 2011–10–26
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34472&r=agr
  7. By: Bart Minten; Anneleen Vandeplas; Johan F.M.Swinnen
    Abstract: There is a vigorous debate on the liberalization of heavily regulated agricultural markets in India. A crucial institutional characteristic is the role of state regulated brokers in wholesale markets. Relying on data from a unique survey in Uttarakhand, a state in North-India, we find that regulations on margins are ineffective as most brokers charge rates that significantly exceed the regulated ones. We also find that a majority of farmers self-select into long-term relationships with brokers. These relationships allow some of the farmers to interlink credit and insurance markets to the agricultural output market. This interlinkage does however not appear to be an instrument for farmer exploitation (as it does not lead to worse inputs, high interest rates, or lower implicit output prices), but is seemingly an extra service by brokers as to establish farmer loyalty to him and thus to ensure future supplies.
    Keywords: India, agricultural marketing, brokers, interlinkages
    JEL: Q12 Q13 L15
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:lic:licosd:28811&r=agr
  8. By: Raghbendra Jha; Raghav Gaiha; Manoj K. Pandey; Nidhi Kaicker
    Abstract: The Targeted Public Distribution System (TPDS) — the largest food subsidy programme in India — has been a dismal failure in targeting the poor. The present paper examines its performance in three Indian states — Andhra Pradesh, Maharashtra and Rajasthan, based on primary data collected for this study. As real income transfers through food price subsidies are a tiny fraction of expenditure per person under this scheme, a contribution of the present study is to model determinants of real income transfers through subsidised wheat, rice and sugar. The analysis throws new light on how income transfers vary with economic status of a household, inequality in the distribution of land in a village, amount of food price subsidy, transaction costs of buying from 'fair price shops' (FPS), and supply shortages. The policy implications of these results are profound. Desperate measures such as a universal food subsidy enshrined in a proposed National Food Security Act are rejected on the grounds that the enormous leakages and wastage under the present TPDS would only get worse. Assertions that a universal food subsidy is the only option consistent with the right to food are rejected as mistaken, as the latter could be interpreted as a right to a right, or, more specifically, as a right to sensible livelihood expansion and price stabilisation policies.
    Keywords: Targeted Public Distribution System, Food subsidy, Targeting Errors
    JEL: D12 D63 H24 H42
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:pas:asarcc:2011-16&r=agr
  9. By: Edwards, William M.
    Date: 2011–10–21
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34431&r=agr
  10. By: Edwards, William M.
    Date: 2011–10–24
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34443&r=agr
  11. By: Glyn Wittwer; Peter Dixon
    Abstract: TERM-H2O, a dynamic, multi-regional model has become a useful tool for analysing water policy issues in the Murray-Darling basin. Available data indicate that farm factor mobility has been an important avenue of adjustment to sharply reduced water availability during drought. The regional impacts of water buybacks in the basin are much smaller than otherwise as a consequence of this mobility.
    Keywords: CGE modelling, irrigation, agricultural economics, regional economies
    JEL: Q11 Q15
    Date: 2011–09
    URL: http://d.repec.org/n?u=RePEc:cop:wpaper:g-222&r=agr
  12. By: Edwards, William M.; Fletcher, Cynthia Needles
    Date: 2011–10–26
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34473&r=agr
  13. By: Cristina Dengel; John Horton
    Abstract: The IDB's strategy in Brazil seeks to promote and further the reform and modernization of the public sector, to support efforts to improve the competitiveness of Brazilian goods, to support the efforts to reduce social inequalities and poverty and, finally, to address the problems of environmental and natural resource management. The Sustainable Development Program in the State of Acre supported the four elements of this strategy by including activities to strengthen the capacity for environmental management at the state level thus promoting modernization of the state, by bolstering competitiveness through improvement of the quality of the transportation infrastructure, by actions to foster the productivity of rural communities and small producers thus supporting efforts to reduce inequality and by actions for conservation and protection of the Amazon rainforest. This note gives an overview of key achievements and challenges to reach such results as well as outline the key lessons learned accumulated over the course of the project.
    Keywords: Environment & Natural Resources :: Biodiversity & Natural Resources Management, Infrastructure & Transport, Rural & Urban Development :: Rural Development, Agriculture & Food Security :: Plant, Animal, & Food Production, Social Development :: Poverty, amazon rainforest, environment conservation, inequality
    Date: 2011–08
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:51098&r=agr
  14. By: Edwards, William M.
    Date: 2011–10–21
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34424&r=agr
  15. By: Anneleen Vandeplas; Bart Minten;
    Abstract: Food quality has become an important determinant of success in global food trade and growers for international markets have to continuously adjust to buyers’ requirements. It is however not clear to what extent there is a demand for food quality - and how much buyers are willing to pay for it - in domestic food markets of developing economies. Based on unique comparable price and trader data in a poor country in Africa (Madagascar) and an emerging economy in Asia (India), we compare food quality and quality’s pricing. We find significantly better quality and higher quality premiums (using revealed as well as stated preference methods) in India than in Madagascar. We explain these observed differences through a simple theoretical model, solely based on large average income gaps between the two countries.
    Keywords: food quality, quality premiums, development
    JEL: Q12 Q13 L15
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:lic:licosd:28911&r=agr
  16. By: Pavel Ciaian; d'Artis Kancs; Jerzy Michalek
    Abstract: This paper estimates the capitalization of the Single Payment Scheme (SPS) into land values. The theory suggests that the relationship between the SPS and land rents is non-linear and discontinuous, because the SPS impact on land values depends on many factors, such as policy implementation details, market imperfections and institutional regulations. In empirical analysis we employ a unique farm-level panel data set, and apply the generalized propensity score (GPS) matching approach to estimate the capitalization of the SPS. Our results suggest that around 6 percent of the total SPS get capitalized into land rents. On average in the EU, the non-farming landowners' gains from the SPS are only 3 percent. However, there is a large variation in the capitalization rate for different SPS levels, and between Member States (between 0 and 58 percent).
    Keywords: decoupled subsidies, capitalization, land market, income distributional effects, selection bias
    JEL: Q12 Q18
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:lic:licosd:29311&r=agr
  17. By: Edwards, William M.; Johanns, Ann M.
    Date: 2011–10–21
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34428&r=agr
  18. By: Edwards, William M.
    Date: 2011–10–21
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34427&r=agr
  19. By: Delpeuch, Claire
    Abstract: After years of diplomatic efforts and legal procedures to obtain the elimination of rich countries'cotton subsidies, policy prospects for African cotton producers remain bleak. However, the world price for cotton has doubled in a year and has hit an all-time high. This paper examines these developments and investigates their potential consequences for African smallholder farmers. It emphasizes the importance of price transmission to domestic markets; assesses the impact of the reforms undertaken in Sub-Saharan African cotton sectors on producers'supply responsiveness; and outlines what remains to be done to ensure that farmers can benefit from a favorable global environment. The paper concludes that improving the functioning of domestic markets remains the priority in the short run. The current high price season will reveal the costs and benefits of different types of sector regulation systems and the capacity of policy-makers and sector stakeholders to deliver on promises. It also offers a last-minute opportunity to rich countries to keep their word in the context of the Doha Development Round.
    Keywords: Markets and Market Access,Economic Theory&Research,Environmental Economics&Policies,Emerging Markets,Access to Markets
    Date: 2011–10–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:5847&r=agr
  20. By: Edwards, William M.
    Date: 2011–10–21
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34423&r=agr
  21. By: Dambala Gelo (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: Through the implementation of a choice experiment valuation exercise, this study set out to identify the set of community plantation attributes that impact the welfare of potential community forestry program participants. We employed a combination of choice models to evaluate the preferences, welfare impacts and choice elasticities associated with alternative community forestry programs, allowing for different assumptions regarding heterogeneity. In line with economic theory, increased participation costs reduced the demand for community forestry, while increases in expected productivity raised the demand. With respect to preferences for the other alternatives considered - type of forest, area enclosure and type of land upon which the forest was to be situated - the results point to significant differences in preferences across the study population, suggesting that programs should be tailored to the communities in which the program is to be implemented.
    Keywords: Community forestry, choice experiment, conditional logit, random parameters logit and latent class model
    JEL: Q23 Q28 Q51
    Date: 2011–10
    URL: http://d.repec.org/n?u=RePEc:pre:wpaper:201121&r=agr
  22. By: Daniel J. Clarke
    Abstract: Rational demand for hedging products, where there is a risk of contractual nonperformance, is fundamentally different to that for indemnity insurance. In particular, optimal demand is zero for infinitely risk averse individuals, and is nonmonotonic in risk aversion, wealth and price. For commonly used families of utility functions, demand is hump-shaped in the degree of risk aversion when the price is actuarially unfair, first increasing then decreasing, and either decreasing or decreasing-increasing-decreasing in risk aversion when the price is actuarially favourable. For a given belief, upper bound are derived for the optimal demand from risk averse and decreasing absolute risk averse decision makers. The apparently low level of demand for consumer hedging instruments, particularly from the most risk averse, is explained as a rational response to deadweight costs and the risk of countractual nonperformance. A numerical example is presented for maize in a developing county which suggests that some unsubsidised weather derivatives, currently being designed for and marketed to poor farmers, may in fact be poor products, in that objective financial advice would recommend low or zero purchase from all risk averse expected utility maximisers.
    Keywords: Index insurance, Derivative, Basis risk, Hedge, Microinsurance
    JEL: D14 D81 G20 O16
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:oxf:wpaper:572&r=agr
  23. By: Delpeuch, Claire; Leblois, Antoine
    Abstract: Little cross-cutting conclusions emerge from comparative studies on the impact of structural adjustment on Sub-Saharan African agricultural performance. This paper aims to illuminate this long-standing debate by adopting a novel quantitative, sectoral and long-term approach controlling for country-specific determinants. It incorporates detailed information on the pace of reforms and the nature of post-reform market structure, pre-reform policies and weather conditions at the cultivation zone level. The cotton sector is the focus of this paper because of its particularly interesting institutional history. The authors find that the changes in market structure brought about by reforms have had very different impacts in Francophone West and Central Africa and in the rest of Sub-Saharan Africa. In the former region, production has been higher but productivity lower, on average, in regulated markets than in monopolistic markets. Conversely, in the liberalized markets of the rest of Sub-Saharan Africa, productivity has been higher in than in monopolistic markets but highly competitive markets seem to have produced less than monopolistic sectors.
    Keywords: Markets and Market Access,Economic Theory&Research,Labor Policies,Debt Markets,Political Economy
    Date: 2011–10–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:5861&r=agr
  24. By: Hofstrand, Donald; Edwards, William M.
    Date: 2011–10–26
    URL: http://d.repec.org/n?u=RePEc:isu:genres:34476&r=agr
  25. By: Amit Gandhi (University of Wisconsin-Madison); Salvador Navarro (University of Western Ontario); David Rivers (University of Western Ontario)
    Abstract: The estimation of production functions suffers from an unresolved identification problem caused by flexible inputs, such as intermediate inputs. We develop an identification strategy for production functions based on a transformation of the firm’s short-run first order condition that solves the problem for both gross output and value-added production functions. We apply our approach to plant-level data from Colombia and Chile, and find that a gross output production function implies fundamentally different patterns of productivity heterogeneity than a value-added specification. This finding is consistent with our analysis of the bias induced by the use of value-added.
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:uwo:hcuwoc:20119&r=agr
  26. By: Claire Delpeuch; Anneleen Vandeplas; Johan F.M.Swinnen
    Abstract: The cotton sector has been amongst the most regulated in Africa, and still is to a large extent in West and Central Africa (WCA), despite repeated reform recommendations by international donors. On the other hand, orthodox reforms in East and Southern Africa (ESA) have not always yielded the expected results. This paper uses a stylised contracting model to investigate the link between market structure and equity and efficiency in sub-Saharan cotton sectors; explain the outcomes of reforms in ESA; and analyze the potential consequences of orthodox reforms in WCA. We argue that the level of the world price and of government intervention, the nature of pre-reform institutional organisation, as well as the degree of parastatal inefficiency, all contribute to making reforms less attractive to farmers and governments in WCA today, as compared to ESA in the 1990s.We illustrate our arguments with empirical observations on the performance of cotton sectors across sub-Saharan Africa.
    Keywords: Sub-Saharan Africa, cotton reforms, self-enforcing contracts
    JEL: Q12 L33 O12
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:lic:licosd:29011&r=agr

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