New Economics Papers
on Agricultural Economics
Issue of 2012‒04‒23
34 papers chosen by

  1. The Nexus Land-Use Model, an Approach Articulating Biophysical Potentials and Economic Dynamics to Model Competition for Land-Uses By F. Souty; T. Brunelle; P. Dumas; B. Dorin,; P. Ciais; R. Crassous
  2. Commodity price changes and their impacts on poverty in developing countries: the Brazilian case By Azzoni, Carlos Roberto; Guilhoto, Joaquim José mantins; Haddad, Eduardo; Menezes, Tatiane; Silveira, Fernando; Hasegawa, Marcos
  3. Impact of Farmer Field Schools on Agricultural Income and Skills By Todo, Yasuyuki; Takahashi, Ryo
  4. Calculating the 'greening' effect: A case study approach to predict the gross margin losses in different farm types in Germany due to the reform of the CAP By Heinrich, Barbara
  5. Food Security and Wheat Prices in Afghanistan: A Distribution-Sensitive Analysis of Household-Level Impacts By D'Souza, Anna; Jolliffe, Dean
  6. World food prices and human development: Policy simulations for archetype low-income countries By Lofgren, Hans
  7. An exploration of agricultural grassroots innovation in South Africa and implications for innovation indicator development By Letty, Brigid; Shezi, Zanele; Mudhara, Maxwell
  8. Global Food Price Inflation and Policy Responses in Central Asia By Mariusz A. Sumlinski; A. J. Al-Eyd; David Amaglobeli; Bahrom Shukurov
  9. Improving Land-use Modelling within CGE to Assess Forest-based Mitigation Potential and Costs By Melania Michetti; Ramiro Parrado
  10. A Mathematical Optimisation Model of a New Zealand Dairy Farm: The Integrated Dairy Enterprise (IDEA) Framework By Graeme J. Doole; Alvaro J. Romera; Alfredo A. Adler
  11. Transfers, Diversification and Household Risk Strategies: Experimental evidence with lessons for climate change adaptation By Macours, Karen; Premand, Patrick; Vakis, Renos
  12. Asia’s Wicked Environmental Problems By Stephen Howes; Paul Wyrwoll
  13. Should we design extended or straightforward questions for small stock when records are unavailable? By Mailu, S.K.; Wanyoike, M.M; Serem, J.K.; Mwanza, R.N.; Borter, D.K; Gachuiri, C.K.; Gathumbi, P.K.; Kiarie, N.; Lwoyero, J.
  14. Public Support to Food Security in India, Brazil and South Africa: Elements for a Policy Dialogue By Darana Souza; Danuta Chmielewska
  15. Commodity Prices and Inflation Expectations in the United States By Oya Celasun; Lev Ratnovski; Roxana Mihet
  16. Drivers of Agricultural Physical Capital Development: Theoretical Framework and Hypotheses By Kataria, Karin; Curtiss, Jarmila; Balmann, Alfons
  17. Returns in Commodities Futures Markets and Financial Speculation: A Multivariate GARCH Approach By Matteo Manera; Marcella Nicolini; Ilaria Vignati
  18. The Economic Value of Rebuilding Fisheries By Christopher Costello; Brian P. Kinlan; Sarah E. Lester; Steven D. Gaines
  19. Integrating Public Works and Cash Transfers in Ethiopia: Implications for Social Protection, Employment and Decent Work By Maikel Lieuw-Kie-Song
  20. Ownership and Investment Behaviour in Transition Countries: A Case Study of Collective and Corporate Farms in the Czech Republic By Curtiss, Jarmila; Ratinger, Tomáš; Medonos, Tomáš
  21. Determinants of Financial Capital Use: Review of theories and implications for rural businesses By Curtiss, Jarmila
  22. On the sources of risk preferences in rural Vietnam By Dang, Duc Anh
  23. Improvement of Socio-economic Conditions and Distribution of Consumption Expenditures: Case Study of India's Poverty Decline over Two Decades By Takahiro Ito
  24. Safeguards Compliance of Medium and Low Risk Category B: Water & Sanitation Projects in the Design Phase By Oscar Camé
  25. Rural Yes 'Young Entreprenur Summit' Report of Findings By Edelman, Mark; Burke, Sandra Charvat
  26. Snakes and Ladders, Buffers and Passports: Rethinking Poverty, Vulnerability and Wellbeing By Andy Sumner; Rich Mallett
  27. Impact of Community Management on Forest Protection By Takahashi, Ryo; Todo, Yasuyuki
  28. Effects of a Domestic Merger on Exports: The case study of a merger of Korean automakers in 1998 (Japanese) By OHASHI Hiroshi; TOYAMA Yuta
  29. The role of market frictions on the price differential: A search-theoretical approach By Chang, Chia-Ying
  30. Retailers and Consumers. The pass-through of import price changes By Eike Berner; Laura Birg
  31. Survey of Revolving Loan Funds and Entrepreneurial Capital: Selected Results By Edelman, Mark; Burke, Sandra Charvat
  32. Regulated (CDM) and voluntary carbon offset schemes as carbon offset markets: competition or complementarity? By Simon Bisore; Walter Hecq
  33. The impact of climate change on generation and transmission in the Australian national electricity market By Bell, William Paul
  34. Where Biodiversity, Traditional Knowledge, Health and Livelihoods Meet: Institutional Pillars for The Productive Inclusion of Local Communities (Brazil Case Study) By Radhika Lal; Waldemiro Francisco Sorte Junior

  1. By: F. Souty (Laboratoire des Sciences du Climat et de l'Environnement); T. Brunelle (Centre International de Recherche sur l'Environnement et le Développement); P. Dumas (Centre International de Recherche sur l'Environnement et le Développement and Centre de Coopération Internationale en Recherche Agronomique pour le Développement); B. Dorin, (Centre International de Recherche sur l'Environnement et le Développement and Centre de Coopération Internationale en Recherche Agronomique pour le Développement); P. Ciais (Laboratoire des Sciences du Climat et de l'Environnement); R. Crassous (Laboratoire des Sciences du Climat et de l'Environnement)
    Abstract: Interactions between food demand, biomass energy and forest preservation are driving both food prices and land-use changes, regionally and globally. This study presents a new model called Nexus Land-Use which describes these interactions through a generic representation of agricultural intensification mechanisms. The Nexus Land-Use model equations combine biophysics and economics into a single coherent framework to calculate crop yields, food prices, and resulting pasture and cropland areas within 12 regions inter-connected with each other by international trade. The representation of cropland and livestock production systems in each region relies on three components: (i) a biomass production function derived from the crop yield response function to inputs such as industrial fertilisers ; (ii) a detailed representation of the livestock production system subdivided into an intensive and an extensive component, and (iii) a spatially explicit distribution of potential (maximal) crop yields prescribed from the Lund-Postdam-Jena global vegetation model for managed Land (LPJmL). The economic principles governing decisions about land-use and intensification are adapted from the Ricardian rent theory, assuming cost minimisation for farmers. The land-use modelling approach described in this paper entails several advantages. Firstly, it makes it possible to explore interactions among different types of demand for biomass for food and animal feed, in a consistent approach, including indirect effects on land-use change resulting from international trade. Secondly, yield variations induced by the possible expansion of croplands on less suitable marginal lands are modelled by using regional land area distributions of potential yields, and a calculated boundary between intensive and extensive production. The model equations and parameter values are first described in detail. Then, idealised scenarios exploring the impact of forest preservation policies or rising energy price on agricultural intensification are described, and their impacts on pasture and cropland areas are investigated.
    Keywords: Land-use Change, Modelling, Global Biomass Projections
    JEL: Q11 Q15
    Date: 2012–03
  2. By: Azzoni, Carlos Roberto; Guilhoto, Joaquim José mantins; Haddad, Eduardo; Menezes, Tatiane; Silveira, Fernando; Hasegawa, Marcos
    Abstract: The objective of the paper is to provide an estimative of the impacts that changes in international prices of agricultural commodities will have on income distribution and poverty in Brazil. To do so, a Social Accounting Matrix is constructed and applied, using a Leontief- Miyazawa type model framework. The SAM is defined for 40 products, being 17 raw agricultural products, 15 agricultural processed products, 3 industrial agricultural inputs, 2 other industrial products, trade, transport, and services. Households are allocated to 10 groups, being 6 agricultural (4 types of family farmers, commercial farmers, and agricultural labor), and 4 urban (income quartiles). Demand elasticities (price and income) for the products defined in the SAM are considered, as well as limitations on the supply of agricultural inputs. The knowledge of the possible impacts of changes in international commodity prices on income distribution and poverty is very important for policy design within developing countries. Given the estimated impacts on different groups of producers, different sorts of cushioning policies can be designed.
    Keywords: Commodity Price; Brazil
    JEL: D57 R15 C67
    Date: 2011
  3. By: Todo, Yasuyuki; Takahashi, Ryo
    Abstract: This study estimates the effect of farmer field schools in rural Ethiopia on income from agriculture. The farmer field schools were established in association with participatory forest management associations for forest protection funded by Japanese aid. We employ a difference-in-differences propensity score matching approach to correct for possible biases due to selection of participants. We find that by participating in the farmer field schools, agricultural households increased their real income per worker by about 60-160 US dollars on average, which is equivalent to, or even more than, the average income per worker before the project. We also find evidence that the large increase in income is due to the use of new agricultural practices, such as new varieties, taught and promoted in the farmer field schools.
    Keywords: impact evaluation , poverty alleviation , farmer field school , Ethiopia
    Date: 2011–05–19
  4. By: Heinrich, Barbara
    Abstract: Agricultural policy is designed to achieve certain goals. One goal that is of increasing importance in public discussion is 'public money for public goods' i.e. the compensation for the provision of public goods and the internalization of externalities. The European Union's Common Agricultural Policy is currently undergoing a reform process which inter alia aims to achieve a higher environmental standard in agricultural production by binding direct payments to practices beneficial for the climate and the environment (the so-called 'greening'). I simulate how farms would respond to these measures using a case study farm modeling approach and data for different farm types in Germany. I find that the considered and currently envisaged 'greening' measures can be expected to function in general due to the linkage to the direct payments, which provide a strong disincentive to forego participation. The individual economic outcome strongly depends on the current intensity of the farm in question and on the implementation details of the introduced measures. However, farms with very high gross margins per hectare will forego the support scheme. --
    Keywords: greening,Common Agricultural Policy,reform of the CAP,agri-environmental measures,direct payments
    Date: 2012
  5. By: D'Souza, Anna (Economic Research Service, USDA); Jolliffe, Dean (World Bank)
    Abstract: We investigate the impact of increases in wheat flour prices on household food security using unique nationally-representative data collected in Afghanistan from 2007 to 2008. We use a new estimator, the Unconditional Quantile Regression (UQR) estimator, based on influence functions to examine the marginal effects of price increases at different locations on the distributions of several food security measures. UQR estimates reveal that the negative marginal effect of a price increase on food consumption is two and a half times larger for households that can afford to cut the value of food consumption (75th quantile) than for households at the bottom (25th quantile) of the food-consumption distribution. Similarly, households with diets high in calories reduce intake substantially, but those at the bottom of the calorie distribution (25th quantile) make very small changes in intake as a result of the price increases. In contrast, households at the bottom of the dietary diversity distribution make the largest adjustments in the quality of their diets, since such households often live at subsistence levels and cannot make large cuts in caloric intake without suffering serious health consequences. These results provide empirical evidence that when faced with staple-food price increases, food-insecure households sacrifice quality (diversity) in order to protect calories. The large differences in behavioral responses of households that lie at the top and bottom of these distributions suggest that policy analyses relying solely on OLS estimates may be misleading.
    Keywords: Afghanistan, food prices, wheat, food security, nutrition, poverty, quantile regression, influence functions
    JEL: D12 I3
    Date: 2012–04
  6. By: Lofgren, Hans
    Abstract: In recent years, world food prices have increased and fluctuated widely. This paper explores the impact of international food prices and domestic policies on Millennium Development Goal (MDG) and macro indicators for two archetype low-income countries, a net food exporter and a net food importer, using Maquette for MDG Simulations (MAMS), a Computable General Equilibrium model. The simulations, which cover the period 2011-2025, indicate that the size of positive (negative) effects on macro and MDG indicators of a food export (import) price increase depend on the initial gross domestic product share for food exports (imports), leaving countries that are heavily involved in international food trade more exposed to international shocks. Given relatively low elasticity estimates, the impact of changes in food prices on undernourishment are relatively marginal. Flexible responses (in terms of production shares, whether output is exported or sold at home, and whether domestic demanders buy imports or domestic output) enable countries to benefit from or be less hurt by price changes. The case for policy responses to higher import prices is stronger for the net food importer. An untargeted food subsidy, financed by taxes or spending cuts, reduces undernourishment at the cost of a slight deterioration for most other indicators. By contrast, aid-financed food subsidies neutralize the negative impact of higher import prices whereas financing via domestic borrowing is counterproductive, leading to a deterioration across all indicators. If administered at moderate costs, tax-financed targeted transfers more effectively reduce headcount poverty and inequality with macroeconomic repercussions similar to those of tax-financed subsidies.
    Keywords: Economic Theory&Research,Food&Beverage Industry,Emerging Markets,Debt Markets,Currencies and Exchange Rates
    Date: 2012–04–01
  7. By: Letty, Brigid (Institute of Natural Resources, South Africa); Shezi, Zanele (Farmer Support Group, University of KwaZulu-Natal); Mudhara, Maxwell (Farmer Support Group, University of KwaZulu-Natal)
    Abstract: The core of this paper consists of two case studies of 'grassroots' innovation led by innovative smallholder farmers in a village in South Africa - one about developing an alternative production practice for growing potatoes, and the other about introducing a new cash crop (cherry peppers) and the establishment of a new marketing relationship. One of the purposes of the study was to explore questions about the development of innovation indicators that might support policy and management concerned with this kind of innovation. The case studies are therefore located in the context of a review of existing science, technology and innovation indicators and their limitations with respect to this area of agricultural innovation. Another purpose was to identify and clarify the position of 'grassroots' innovation within other perspectives on different kinds of innovation system (or mode of innovation) in agriculture in developing countries. The case studies are also therefore set in the context of a review of literature about these other system perspectives, focusing in particular in 'formal' and 'informal' systems, and on 'grassroots' and 'participatory' modes of innovation involving interactions between formal and informal systems. The combination of case studies and broader reviews leads to two main conclusions: (1) grassroots and other participatory modes of agricultural innovation merit much greater policy attention than they have received; but (2) the base of available analysis and indicators about these approaches to innovation and their effectiveness is still inadequate to inform and support policy and management in this area. The paper therefore concludes with a discussion of steps that might be taken to improve the available information, understanding and indicators about these modes of innovation.
    Keywords: Agriculture, innovation, grassroots innovation, informal economy
    JEL: O13 O17 O33
    Date: 2012
  8. By: Mariusz A. Sumlinski; A. J. Al-Eyd; David Amaglobeli; Bahrom Shukurov
    Abstract: This paper examines the implications of elevated global food prices for inflation in select Central Asian economies - Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan. The findings suggest that global food inflation has significant short-run effects that build over time. Inflation outcomes simulated under alternative global wheat price assumptions underscore these vulnerabilities, and suggest that sustained administrative measures are unlikely to prove effective. In line with structural economic features, the interest rate channel of monetary policy is found to be limited, arguing for a broad policy strategy to control more expansive inflationary pressures. Looking ahead, measures to enhance supply responses, deepen domestic financial markets, develop adequate social safety nets, and increase central bank independence are warranted.
    Keywords: Agricultural prices , External shocks , Fiscal policy , Inflation , Monetary policy , Price increases ,
    Date: 2012–03–22
  9. By: Melania Michetti (Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC), Fondazione Eni Enrico Mattei (FEEM), Università Cattolica del Sacro Cuore di Milano); Ramiro Parrado (Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC), Fondazione Eni Enrico Mattei (FEEM), Università Ca’ Foscari di Venezia)
    Abstract: We present a computable general equilibrium model properly modified to analyse the potential role of the European forestry sector within climate mitigation. Improvements on database and modelling frameworks allow accounting for land heterogeneity across and within regions and for land transfers between agriculture, grazing, and forestry. The forestry sector has been modified to track carbon mitigation potential from both intensive and extensive forest margins, which have been calibrated according to a forest sectoral model. Two sets of climate policies are simulated. In a first scenario, Europe is assumed to commit unilaterally to reduce CO2 emissions by 20% and 30%, by 2020. In a second scenario, in addition to the emissions quotas, progressively higher forest sequestration subsidies are paid to European firms to foster the implementation of forestry practices. Results show that including forest carbon in the compliance strategy decreases European policy costs and carbon price, while it does not lead to significant reductions in carbon leakage. We conclude that while European forests can reinforce other mitigation measures, their contribution as a stand-alone abatement strategy results insufficient to comply with emissions reduction targets. Additionally, carbon sinks provided by European temperate forests do not offer considerable mitigation potential if compared with other forest biomes around the world. A much higher forest mitigation would require other regions to take part in a climate stabilization agreement, especially those where old-growth forests exist.
    Keywords: Climate Change, Climate Mitigation, General Equilibrium Modelling, Forestry
    JEL: D58 Q23 Q54 Q58
    Date: 2012–03
  10. By: Graeme J. Doole (University of Waikato); Alvaro J. Romera (Dairy New Zealand); Alfredo A. Adler (Dairy New Zealand)
    Abstract: Optimisation models are a key tool for the analysis of emerging policies, price sets, and technologies within grazing systems. A detailed nonlinear optimisation model of a New Zealand dairy farming system is described. The framework is notable for its rich portrayal of pasture and cow biology that add substantial descriptive power to standard approaches. Key processes incorporated in the model include: (1) pasture growth and digestibility that differ with residual pasture mass and rotation length, (2) pasture utilisation that varies by stocking rate, and (3) different levels of intake regulation. Model output is shown to closely match data from a more detailed simulation model (deviations between 0 and 5 per cent) and survey data (deviations between 1 and 11 per cent), providing confidence in its predictive capacity. Use of the model is demonstrated in an empirical application investigating the relative profitability of production systems involving different amounts of imported feed under price variation. The case study indicates superior profitability associated with the use of a moderate level of imported supplement, with Operating Profit ($NZ ha-1) of 934, 926, 1186, 1314, and 1093 when imported feed makes up 0, 5, 10, 20 and 30 per cent of the diet, respectively. Stocking rate and milk production per cow increase by 35 and 29 per cent, respectively, as the proportion of imported feed increases from 0 to 30 per cent of the diet. Pasture utilisation increases with stocking rate. Accordingly, pasture eaten and nitrogen fertiliser application increase by 20 and 213 per cent, respectively, as the proportion of imported feed increases from 0 to 30 per cent of the diet.
    Keywords: dairy production; mathematical optimisation; whole-farm model
    JEL: Q12 C61
    Date: 2012–04–15
  11. By: Macours, Karen; Premand, Patrick; Vakis, Renos
    Abstract: While climate change is likely to increase weather risks in many developing countries, there is little evidence on effective policies to facilitate adaptation. This paper presents experimental evidence on a program in rural Nicaragua aimed at improving households’ risk-management through income diversification. The intervention targeted agricultural households exposed to weather shocks related to changes in rainfall and temperature patterns. It combined a conditional cash transfer with vocational training or a productive investment grant. We identify the relative impact of each complementary package based on randomized assignment, and analyze how impacts vary by exposure to exogenous drought shocks. The results show that both complementary interventions provide full protection against drought shocks two years after the end of the intervention. Households that received the productive investment grant also had higher average consumption levels. The complementary interventions led to diversification of economic activities and better protection from shocks compared to beneficiaries of the basic conditional cash transfer and control households. These results show that combining safety nets with productive interventions can help households manage future weather risks and promote longer-term program impacts.
    Keywords: cash transfers; climate change adaptation; diversification; productive investment; risk-management; shocks; vocational training
    JEL: D1 I3 O1
    Date: 2012–04
  12. By: Stephen Howes (Asian Development Bank Institute (ADBI)); Paul Wyrwoll
    Abstract: The developing economies of Asia are confronted by serious environmental problems that threaten to undermine future growth, food security, and regional stability. This study considers four major environmental challenges that policymakers across developing Asia will need to address towards 2030 : water management, air pollution, deforestation and land degradation, and climate change. We argue that these challenges, each unique in their own way, all exhibit the characteristics of “wicked problemsâ€. As developed in the planning literature, and now applied much more broadly, wicked problems are dynamic, complex, encompass many issues and stakeholders, and evade straightforward, lasting solutions. Detailed case studies are presented to illustrate the complexity and significance of Asia’s environmental challenges, and also their nature as wicked problems. The most important implication of this finding is that there will be no easy or universal solutions to environmental problems across Asia. This is a caution against over-optimism and blueprint or formulaic solutions. It is not, however, a counsel for despair. We suggest seven general principles which may be useful across the board. These are : a focus on co-benefits; an emphasis on stakeholder participation; a commitment to scientific research; an emphasis on long-term planning; pricing reform; tackling corruption, in addition to generally bolstering institutional capacity with regard to environmental regulation; and a strengthening of regional approaches and international support.
    Keywords: Environmental Problems, Asia, developing economies of Asia, developing Asia
    JEL: O44 Q58 Q56 O10 O53 Q28 Q53
    Date: 2012–02
  13. By: Mailu, S.K.; Wanyoike, M.M; Serem, J.K.; Mwanza, R.N.; Borter, D.K; Gachuiri, C.K.; Gathumbi, P.K.; Kiarie, N.; Lwoyero, J.
    Abstract: Data from two closely related questions in a survey on rabbits is analyzed in order to determine whether results from these two groups of questions would yield similar results about numbers of rabbits kept by a household. One question seeks a straightforward answer about numbers of rabbits kept while the other group of questions breaks the question into several questions seeking numbers of rabbits disaggregated by sex and age. This is prompted by the fact that record keeping is not a very common undertaking in a small holder agricultural setting in Kenya and that in their absence, farmers may not recall precisely how many rabbits they own unless a headcount is performed. A paired sample t test is implemented to detect any significant under-reporting of rabbit numbers based on numbers from the straightforward question which we hypothesize would yield numbers far less than what is on the farm. The results show that such under-reporting is not serious enough. The conclusion is that between the two question modes implemented in the survey, the straightforward question is suitable as it is time saving when the survey data required does not include numbers disaggregated by sex or age of rabbits.
    Keywords: LSMS; Under-reporting
    JEL: N57 C10 R29
    Date: 2012–03
  14. By: Darana Souza (International Policy Centre for Inclusive Growth); Danuta Chmielewska (International Policy Centre for Inclusive Growth)
    Abstract: Together, India, Brazil and South Africa have nearly 1,365 billion inhabitants (World Bank, 2009), or about 20 per cent of the world?s population. Although the three countries have demonstrated the potential for transformative development in the South, their experience has been marked by key challenges such as relatively high levels of poverty, inequality and food insecurity, problems that persist for significant numbers of people. This minilateral group of countries known as IBSA is a crucial pole for increasing South-South learning and has much potential for debate on innovative development policy initiatives. (...)
    Keywords: Public Support to Food Security in India, Brazil and South Africa: Elements for a Policy Dialogue
    Date: 2011–04
  15. By: Oya Celasun; Lev Ratnovski; Roxana Mihet
    Abstract: U.S. monetary policy can remain extraordinarily accommodative only if longer-term inflation expectations stay well-anchored, including in response to commodity price shocks. We find that oil price shocks have a statistically significant, but economically small impact on longer-term inflation compensation embedded in U.S. Treasury bonds. The estimated effect is larger for the post-crisis period, and robust to controlling for measures of liquidity risk premia. Oil price shocks are also correlated with the variance of longer-term inflation expectations in the University of Michigan Survey of Consumers in the post-crisis period. These results are not attributable to looser monetary policy - oil price increases were associated with expectations of a faster monetary tightening after the crisis. Overall, the findings are consistent with some impact of commodity prices on long-term inflation expectations and/or on inflation rate risk.
    Keywords: Agricultural prices , Commodity prices , External shocks , Inflation , Monetary policy , Oil prices , Price increases ,
    Date: 2012–03–27
  16. By: Kataria, Karin; Curtiss, Jarmila; Balmann, Alfons
    Abstract: This paper aims to identify drivers of physical capital adjustments in agriculture. It begins with a review of some of the most important theories and modelling approaches regarding firms’ adjustments of physical capital, ranging from output-based models to more recent approaches that consider irreversibility and uncertainty. Thereafter, it is suggested that determinants of physical capital adjustments in agriculture can be divided into three main groups, namely drivers related to: i)expected (risk-adjusted) profit, ii) expected societal benefits and costs and iii) expected private nonpecuniary benefits and costs. The discussion that follows focuses on the determinants belonging to the first group and covers aspects related to product market conditions, technological conditions, financial conditions and the role of firm structure and organization. Furthermore, the role of subjective beliefs is emphasized. The main part of this paper is concerned with the demand side of the physical capitalmarket and one section also briefly discusses some aspects related to supply of farm assets.
    Date: 2012–02
  17. By: Matteo Manera (University of Milan-Bicocca, Milan and Fondazione Eni Enrico Mattei, Milan); Marcella Nicolini (University of Pavia, Pavia and Fondazione Eni Enrico Mattei, Milan); Ilaria Vignati (Fondazione Eni Enrico Mattei, Milan)
    Abstract: This paper analyses futures prices for four energy commodities (light sweet crude oil, heating oil, gasoline and natural gas) and five agricultural commodities (corn, oats, soybean oil, soybeans and wheat), over the period 1986-2010. Using CCC and DCC multivariate GARCH models, we find that financial speculation is poorly significant in modelling returns in commodities futures while macroeconomic factors help explaining returns in commodities futures. Moreover, spillovers between commodities are present and the conditional correlations among commodities are high and time-varying.
    Keywords: Energy, Commodities, Futures Markets, Financial Speculation, Multivariate GARCH
    JEL: C32 G13 Q11 Q43
    Date: 2012–04
  18. By: Christopher Costello; Brian P. Kinlan; Sarah E. Lester; Steven D. Gaines
    Abstract: The global demand for protein from seafood – whether wild, caught or cultured, whether for direct consumption or as feed for livestock – is high and projected to continue growing. However, the ocean’s ability to meet this demand is uncertain due to either mismanagement or, in some cases, lack of management of marine fish stocks. Efforts to rebuild and recover the world’s fisheries will benefit from an improved understanding of the long-term economic benefits of recovering collapsed stocks, the trajectory and duration of different rebuilding approaches, variation in the value and timing of recovery for fisheries with different economic, biological, and regulatory characteristics, including identifying which fisheries are likely to benefit most from recovery, and the benefits of avoiding collapse in the first place. These questions are addressed using a dynamic bioeconomic optimisation model that explicitly accounts for economics, management, and ecology of size-structured exploited fish populations. Within this model framework, different management options (effort controls on small-, medium-, and large-sized fish) including management that optimises economic returns over a specified planning horizon are simulated and the consequences compared. The results show considerable economic gains from rebuilding fisheries, with magnitudes varying across fisheries.
    Date: 2012–04–16
  19. By: Maikel Lieuw-Kie-Song (Independent researcher and consultant)
    Abstract: What is the relevance of Africa?s second largest social protection programme, Ethiopia?s Productive Safety Net Programme (PSNP), for other countries and especially for India, Brazil and South Africa (IBSA)? Are there policy lessons to be noted and operational innovations to be learned from? At least in part, this paper sets out to answer these question by reviewing and analysing the employment and social-protection aspects of PSNP. Four aspects of PSNP were considered of potential interest and identified for further analysis, all of them interrelated to some degree. (?)
    Keywords: Integrating Public Works and Cash Transfers in Ethiopia: Implications for Social Protection, Employment and Decent Work
    Date: 2011–08
  20. By: Curtiss, Jarmila; Ratinger, Tomáš; Medonos, Tomáš
    Abstract: Cooperative and corporate farms have retained an important role for agricultural production in many transition countries of Central and Eastern Europe. Despite this importance, these farms' ownership structure, and particularly the ownership's effect on their investment activity, which is vital for efficient restructuring and the sector's future development, are still not well understood. This paper explores the ownership-investment relationship using data on Czech farms from 1997 to 2008. We allow for ownership-specific variability in farm investment behaviour analyzed by utilizing an errorcorrection accelerator model. Empirical results suggest significant differences in the level of investment activity, responsiveness to market signals, investment lumpiness, as well as investment sensitivity to financial variables among farms with different ownership characteristics. These differences imply that the internal structure of the Czech cooperative and corporate farms will be developing in the direction of a decreasing number of owners and an increasing ownership concentration.
    Date: 2012–02
  21. By: Curtiss, Jarmila
    Abstract: This paper presents a review of financial economics literature and offers a comprehensive discussion and systematisation of determinants of financial capital use. In congruence with modern financial literature, it is acknowledged here that real and financial capital decisions are interdependent. While the fundamental role of the (unconstrained) demand for real capital in the demand for finance is acknowledged, the deliverable focuses on three complementary categories of the determinants of financial capital use: i) capital market imperfections; ii) factors mitigating these imperfections or their impacts; and iii) firm- and sector-related factors, which alter the severity of financial constraints and their effects. To address the question of the optimal choice of financial instruments, theories of firm capital structure are reviewed. The deliverable concludes with theory-derived implications for agricultural and non-agricultural rural business’ finance.
    Date: 2012–02
  22. By: Dang, Duc Anh
    Abstract: In this paper, I provide a new empirical evidence that natural environment can shape individual risk preferences. By combining historical data on climate variation and contemporary survey questions on risk aversion, I find that risk aversion is significantly different for people who live in areas that have suffered high frequency of natural disaster. In particular, individuals highly affected by climate volatility show a long term risk aversion.
    Keywords: Climate variation; risk aversion; Vietnam
    JEL: D03 O53 Q54
    Date: 2012–04
  23. By: Takahiro Ito (Graduate School for International Development and Cooperation, Hiroshima University)
    Abstract: This paper examines how living standards in India have improved over two decades, focusing on the distribution of household-level consumption expenditures. The analysis is conducted using the DiNardo-Fortin-Lemieux (DFL) semi-parametric decomposition method. This method offers two desirable features, which enable us to avoid the traditional pitfalls of (semi-)macro-level poverty analysis. The estimation results indicate that regional heterogeneity in poverty decline is very large, and different regional factors contribute to the poverty decline at different stage of development. From 1983 to 1993/94, regional education (measured by literacy rate) is the main engine of the poverty decline. It accounts for 85% of the total poverty decline in this period. During the following 10 years, the labor market condition has a significant role in reducing poverty. Especially, wage and employment growth in the non-agricultural sector is the key to the improvement of living standards. In addition, agricultural wage employment is still important to reduce poverty in rural areas.
    Keywords: Consumption expenditures, kernel density estimation, poverty, regional development
    JEL: D31 I32 R20
    Date: 2012–03
  24. By: Oscar Camé
    Abstract: The objective of these notes is to provide Bank staff with direction and assistance to ensure the compliance of low and medium risk Category B Water & Sanitation (W&S) projects with the Bank's environmental and social policies and safeguards during Preparation Phase. These notes are aimed to support Project Teams -particularly W&S specialists- when ESG staff members are not part of them, so they are able to ensure compliance with the Bank's policies and environmental safeguards during the preparation phase of their projects. In this context, it is supposed that most W&S projects are Sovereign Guaranteed (SG) -or public sector- operations; for Non Sovereign Guaranteed (NSG) -or private sector- operations, some adjustments should be made to these notes.
    Keywords: Environment & Natural Resources :: Water Management, Environment & Natural Resources :: Disasters, Social Development :: Afro Descendants & Indigenous Peoples, Public Sector :: Transparency & Anticorruption, environmental compliance, low risk
    Date: 2011–06
  25. By: Edelman, Mark; Burke, Sandra Charvat
    Abstract: A Rural YES “Young Entrepreneur Summit†was organized at Iowa State University featuring a panel of successful rural entrepreneurs along with SBA Deputy Administrator Marie Johns, USDA Rural Development Deputy Under Secretary Doug Obrien, Governor Terry Branstad, and Lt. Governor Kim Reynolds on November 9, 2011.  Over 160 participants attended and over 2 dozen diverse collaborating organizations supported the event.  Near the end of the program, small group discussions participants were asked to identify the resources available in their home location and to suggest next steps for improving entrepreneurial opportunities in rural America.  This report highlights the results of this process.
    Keywords: rural entrepreneruship
    Date: 2011–12–15
  26. By: Andy Sumner (Institute of Development Studies, Sussex); Rich Mallett (Sussex)
    Abstract: Much research to date has tended to view vulnerability by discipline or sector, yet individuals and households experience multiple, interacting and sometimes compound vulnerabilities. Cross-disciplinary thinking is emerging as multi-dimensional vulnerability is likely to become an increasingly important concept if the outlook over the next 15 to 25 years is one of multiple, interacting and compound stressors and crises, a result of the ?perfect-storm? or ?long-crisis? thesis of the interaction of demographics, climate change and food and energy prices. A realigned analytical lens is thus useful to bring together the various intellectual strands involved in multi-dimensional vulnerability analysis. In light of the above, this paper reviews the literature on vulnerability and asks what a ?three-dimensional human wellbeing? approach?a complement to more traditional ways of understanding poverty?might contribute to the analysis of vulnerability. (?)
    Keywords: Snakes and Ladders, Buffers and Passports: Rethinking Poverty, Vulnerability and Wellbeing
    Date: 2011–08
  27. By: Takahashi, Ryo; Todo, Yasuyuki
    Abstract: This study uses remote sensing data to quantitatively examine the impact of establishing participatory forest management associations in Ethiopia. The results indicate that where there is a forest association, forest area declines more in the year the association is established than it does in a forest area where there is no association. This suggests that villagers may engage in “last-minute” logging. However, one year after associations are established, forest area where there is an association increases substantially, probably due to the associations planting trees at boundary areas between forest and non-forest and monitoring illegal logging. On average, where there are forest associations, forest area increases by 1.5 percent in the first two years, while forest area where there is no association declines by 3.3 percent. Totaling this impact over two years yields a 4.8 percent positive net increase in the rate of change.
    Keywords: impact evaluation , remote sensing , forest protection , community management , Ethiopia
    Date: 2011–07–06
  28. By: OHASHI Hiroshi; TOYAMA Yuta
    Abstract: This paper examines the economic consequences of a horizontal merger between two Korean automakers in 1998. Estimates of structural demand and supply reveal that the merger enhanced the production efficiency of the merging parties by a magnitude of 8.4%. Simulations based on the estimates indicate that while the merger increased domestic auto prices, it more than doubled the exports of the merging parties. The merger effects vary according to auto model type.
    Date: 2012–04
  29. By: Chang, Chia-Ying
    Abstract: To shed light on how market frictions and the waiting time of imitators affect prices and how effective research subsidy and patent protection affect the price differential, this paper adopts a direct search-theoretical approach to capture the searching behaviors of consumers and producers in the innovative and imitative markets. As a result, this model shows that the price differential with endogenous market frictions would react to the change of quality the least. A shorter durability would result in a wider price differential in the model without the extra state for imitators than in the model with the extra state. While a research subsidy shrinks the price differential, and improve consumers’ flow values, the patent protection widens the price differential, hurts imitators’ profits and may not improve the consumers’ flow values. The innovators could take the advantage of the effects of durability on price differential by inventing products which might influence the durability of the products currently hold by the consumers. This finding might provide an explanation on why the latest versions of computer products are invented less likely convertible to older versions of Windows or associated software.
    Keywords: market frictions, price differential, direct search, innovation, imitation,
    Date: 2012–03–16
  30. By: Eike Berner; Laura Birg
    Abstract: This paper uses German household data on apparel purchases to show that, con- ditional on income, households di¤er with respect to their shopping outlets and the prices they pay. We estimate that high-price retailers are not a¤ected by changes in import prices. By contrast, the pass-through for low-price retailers is 53% within 3 months. Consequently, pass-through rates for low-income households are 58%, signi…cantly larger than those for high-income households. We then present one explanation for these observations in a theoretical model with vertical product differentiation due to bundling an otherwise homogeneous imported good with services. Following an import price shock, retailers who sell cheaper unbundled products change prices more than retailers who sell a higher-priced bundle of product and service.
    Keywords: Import prices, Pass-through, Retailers, Households
    JEL: D12 D31 F10
    Date: 2012–03–16
  31. By: Edelman, Mark; Burke, Sandra Charvat
    Abstract: Revolving loan funds and entrepreneurial capital are important issues for Iowa and its entrepreneurs. The survey reported here was conducted to learn more about the characteristics and practices of revolving loan funds in Iowa. The funds responding to the survey were from across the areas and regions of Iowa and involved many kinds of agencies and entities. This report examines findings from selected questions in the survey to provide an overview of survey results.
    Keywords: Loan Funds; Rural Entrepreneurs; Rural Capital
    Date: 2011–08–01
  32. By: Simon Bisore; Walter Hecq
    Abstract: As one of the offsetting instruments, the Clean Development Mechanism (CDM) allows industrialized countries to meet their compliance objectives by undertaking and financing project activities in developing countries with certified emissions reductions (CERs) in return. Next to Kyoto mechanisms, voluntary offset markets for GHG emissions reductions that are not compliant with the Kyoto Protocol are developing quickly. Emissions offsets in this latter category are verified by official or independent agents but are not certified by regulatory authorities for use as a compliance instrument, and are commonly referred to as verified emissions reductions (VERs) which are not a standardized commodity. This paper compares the two types of projects-based carbon offset markets and analyses the question of complementarity or competition between them in their contribution to the mitigation of global warming as well as to sustainable development in the host countries.
    Keywords: Climate change; CDM carbon offset market; Voluntary carbon offset; Competition; Complementarity; Standards; Carbon credits; Sustainable development
    Date: 2012–04
  33. By: Bell, William Paul
    Abstract: This paper aims to identify climate change adaptation issues in the Australian National Electricity Market (NEM) by assessing the robustness of the institutional arrangements that support effective adaptation from the supply side. This paper finds that three major factors are hindering or are required for adaptation to climate change: institutional fragmentation both economically and politically; distorted transmission and distribution investment deferment mechanisms; and lacking mechanisms to develop a diversified portfolio of generation technology and energy sources to reduce supply risk. Proposed solutions to the three factors are discussed. These proposed solutions are tested and examined in forthcoming papers.
    Keywords: Climate change adaptation; electricity generation; electricity transmission; Australian National Electricity Market
    JEL: O2 O13 Q3 Q01 Q4 Q5 L94 R38
    Date: 2012–01–31
  34. By: Radhika Lal (International Policy Centre for Inclusive Growth); Waldemiro Francisco Sorte Junior (International Policy Centre for Inclusive Growth)
    Keywords: Where Biodiversity, Traditional Knowledge, Health and Livelihoods Meet: Institutional Pillars for The Productive Inclusion of Local Communities (Brazi
    Date: 2011–04

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.