nep-agr New Economics Papers
on Agricultural Economics
Issue of 2012‒05‒15
79 papers chosen by
Angelo Zago
University of Verona

  1. The effect of agricultural policy change on income risk in Swiss agriculture By El Benni, Nadja; Finger, Robert; Mann, Stefan
  2. Economic and environmental effects of an EU flat rate for the Dutch agricultural sector By Helming, John F.M.; Peerlings, Jack H.M.
  3. Long-term impacts of global food crisis on production decisions : evidence from farm investments in Indonesia By Nose, Manabu; Yamauchi, Futoshi
  4. Land Fragmentation, Market Integration and Farm Efficiency: Empirical Evidence from Kosovo By Sauer, Johannes; Davidova, Sophia; Gorton, Matthew
  5. The curious case of Indian agriculture By Banik, Nilanjan; Biswas, Basudeb
  6. Effects of volatile output prices on agricultural land-use change By Boere, Esther; Peerlings, Jack H.M.; Reinhard, Stijn; Kuhlman, Tom; Heijman, Wim J.M.
  7. Input, Output Technical Efficiencies and Total Factor Productivity of Cereal Production in Tunisia By Dhehibi, Boubaker; Bahri, Haithem; Annabi, Mohamed
  8. Aspects of production in fish farming in Ilha Solteira, Sao Paulo state: viability of developing of public policies By Sabbag, Omar Jorge; Lima Costa, Silvia Maria Almeida; Silveira, Alexandre Ninhaus
  9. AGRICULTURAL PRICE VOLATILITY UNDER CLIMATE CHANGE: The Impact of Multiple Objectives on Commodity Prices By Fuss, Sabine; Havlik, Petr; Szolgayova, Jana; Obersteiner, Michael; Schmid, Erwin
  10. Actuarial evaluation of the EU proposed farm income stabilisation tool By Pigeon, Mathieu; Frahan, Bruno Henry de; Denuit, Michel
  11. The evolution of land values in Italy. Does the influence of agricultural prices really matter? By Mela, Giulio; Longhitano, Davide; Povellato, Andrea
  12. Identifying Financially Versatile Milk Production Systems By Anderson, Duncan J.; Jack, Claire G.; Connolly, Niamh
  13. Production Effects of Direct Payments to Active Farmers: a Microeconomic Dynamic and Stochastic Analysis By Carpentier, Alain; Gohin, Alexandre; Heinzel, Christoph
  14. Farm diversification and market inclusion in East Europe and Central Asia By Bachev, Hrabrin
  15. Bio-economic modelling of decisions under yield and price risk for suckler cow farms By Briner, Simon; Finger, Robert
  16. Increasing volatility of input costs in the EU agriculture By Himics, Mihaly; Van Doorslaer, Benjamin; Ciaian, Pavel; Shrestha, Shailesh
  17. Feasibility of the Income Stabilisation Tool in Finland By Liesivaara, Petri; Myyra, Sami; Jaakkola, Antti
  18. EU wide regional impacts of climate change By Shrestha, Shailesh; Himics, Mihaly; van Doorslaer, Benjamin; Ciaian, Pavel
  19. Rising Food Prices and Children’s Welfare By Nora Lustig
  20. The Impact of Food Environment on Branded vs. Private Label Produce Choice By Schroeter, Christiane; Cai, Xiaowei
  21. Direct payments, crop insurance and the volatility of farm income. Some evidence in France and in Italy By Enjolras, Geoffroy; Capitanio, Fabian; Aubert, Magali; Adinolfi, Felice
  22. VERTICAL PRICE TRANSMISSION IN DIFFERENTIATED PRODUCT MARKETS: A DISAGGREGATED STUDY FOR MILK AND BUTTER By Loy, Jens-Peter; Holm, Thore; Steinhagen, Carsten
  23. Local, Organic, Conventional— Asymmetric Effects of Information and Taste on Label Preferences in an Experimental Auction By Costanigro, Marco; Kroll, Stephan; Thilmany, Dawn D.
  24. Farming strategies regarding the production of collective goods in the Russian agricultural sector By Pascal Grouiez
  25. A Food Demand System Estimation for Uganda By Ole Boysen
  26. Modelling Long Memory Volatility in Agricultural Commodity Futures Returns By Chia-Lin Chang; Michael McAleer; Roengchai Tansuchat
  27. A meta-analysis of the response of calorie demand to income changes By Ogundari, Kolawole; Abdulai, Awudu
  28. Modelling Long Memory Volatility in Agricultural Commodity Futures Returns By Chia-Lin Chang; Michael McAleer; Roengchai Tansuchat
  29. Testing for Speculative Bubbles in Agricultural Commodity Prices: A Regime Switching Approach By Liu, Xiaoliang; Filler, Guenther; Odening, Martin
  30. How strong is the “natural hedge”? The effects of crop acreage and aggregation levels By Finger, Robert
  31. The Impact of Crop Insurance on the Economic Performance of Hungarian Cropping Farms By Sporri, Martina; Barath, Lajos; Bokusheva, Raushan; Ferto, Imre
  32. Optimizing whole-farm management considering price and climate risks By Lehmann, Niklaus; Finger, Robert
  33. EU and World Agricultural Markets: Are They more Integrated after the Fischler Reform? By Mela, Giulio; Canali, Gabriele
  34. How far do shocks move across borders? Examining volatility transmission in major agricultural futures markets By Hernandez, Manuel A.; Ibarra, Raul; Trupkin, Danilo R.
  35. Modelling yield risk measures of major crop plants By Kobus, Pawel
  36. Volatility in US and Italian agricultural markets, interactions and policy evaluation By Rosa, Franco; Vasciaveo, Michela
  37. The Financialization of Agricultural Futures Markets By Gilbert, Christopher L.
  38. On trade efficiency in the Ethiopian agricultural markets By Quattri, Maria A.
  39. Development of private insurance schemes as a means to reduce water overexploitation during drought events. A case study in Campo de Cartagena (Segura River Basin, Spain) By Perez Blanco, Carlos Dionisio; Gomez Gomez, Carlos Mario
  40. Volatility in Agriculture Commodity Prices in India: Impact and Macroeconomic and Sector-Specific Policy Responses By Bathla, Seema
  41. Coping with Systemic Risk in Index-based Crop Insurance By Shen, Zhiwei; Odening, Martin
  42. Impact of Environmental Policies on the Adoption of Animal Waste Management Practices in the Chesapeake Bay Watershed By Savage, Jeff; Ribaudo, Marc
  43. Price volatility on the German Agricultural Markets By von Ledebur, Oliver; Schmitz, Jochen
  44. DOES REGULATORY STRINGENCY AFFECT THE INDUSTRY STRUCTURE? : EVIDENCE FROM THE GLOBAL FUNCTIONAL FOOD SECTOR By Herath, Deepananda P.B.; Aubeeluck, Ashwina
  45. Tobit regression to estimate impact of EU market intervention in dairy sector By Wocken, Meike; Kneib, Thomas
  46. What is it Consumers really want, and how can their preferences be influenced? The Case of fat in Milk By Andersen, Laura M.; Smed, Sinne
  47. IS A PUBLIC REGULATION OF FOOD PRICE VOLATILITY FEASIBLE IN AFRICA? AN ARCH APPROACH IN KENYA By Maitre d'Hotel, Elodie; le Cotty, Tristan; Jayne, Thomas S.
  48. Potato Prices as Affected by Supply and Demand Factors: An Irish Case Study By Thorne, Fiona S.
  49. On the interaction between risk-taking and risk-sharing under farm household wealth heterogeneity By Delpierre, Matthieu; Verheyden, Bertrand; Weynants, Stephanie
  50. Retail Wastelands: Characteristics and Influential Factors of Food Deserts By Dutko, Paula; Ver Ploeg, Michele; Farrigan, Tracey L.
  51. Producer preferences towards vertical coordination: The case of Canadian beef alliances By Steiner, Bodo E.; Lan, Kevin; Unterschultz, James R.; Boxall, Peter C.; Laate, Emmanuel; Yang, Danyi
  52. Do energy prices stimulate food price volatility? Examining volatility transmission between US oil, ethanol and corn markets By Gardebroek, Cornelis; Hernandez, Manuel A.
  53. TOTAL FACTOR PRODUCTIVITY AND THE BIO ECONOMY EFFECTS By Zuniga Gonzalez, Carlos Alberto
  54. Management of Volatility in the Grain Market By Guenther-Luebbers, Welf; Henke, Soren; Theuvsen, Ludwig
  55. Consumer’s thoughts about and willingness to pay for traffic-light labeled food and financial products By Drescher, Larissa S.; Stephan, Marette; Roosen, Jutta
  56. Volatile world market prices for dairy products - how do they affect domestic price formation: The German cheese market By Weber, Sascha A.; Salamon, Petra; Hansen, Heiko
  57. Economy-wide implications of direct and indirect policy interventions in the water sector: lessons from recent work and future research needs By Dinar, Ariel
  58. EVALUATION WITH INADEQUATE DATA: THE IMPACT OF THE FRENCH VENDING MACHINE BAN By Capacci, Sara; Mazzocchi, Mario; Shankar, Bhavani
  59. International wheat price volatility and the increasing export of Russia, Kazakhstan and Ukraine By Kemeny, Gabor; Fogarasi, Jozsef; Varga, Tibor; Toth, Orsolya; Toth, Kristof
  60. The adoption of innovative cropping systems under price and production risks: a dynamic model of crop rotation choice By Ridier, Aude; Chaib, Karim; Roussy, Caroline
  61. Policy for implementation of Index Based Weather Insurance revisited: the case of Nicaragua By Banerjee, Chirantan; Berg, Ernst
  62. Returns in commodities futures markets and financial speculation: a multivariate GARCH approach By Matteo Manera; Marcella Nicolini; Ilaria Vignati
  63. Experimental examination of land investment decisions with volatile returns A comparison between Kazakhstani and German farmers By Tubetov, Dulat; Maart, Syster Christin; Musshoff, Oliver
  64. Assessing the economic costs of an outbreak of Foot and Mouth Disease on Brittany: A dynamic computable general equilibrium approach By Gohin, Alexandre; Rault, Arnaud
  65. Consumer valuation of health attributes in food By Smed, Sinne; Hansen, Lars Garn
  66. Heterogeneity, Demand for Insurance and Adverse Selection By Johannes Spinnewijn
  67. Which factors drive which volatility in the grain sector? By Ott, Herve
  68. Reallocation of price risk among members By Pedersen, Michael Friis
  69. Catastrophic crop insurance effectiveness: does it make a difference how yield losses are conditioned? By Bokusheva, Raushan; Conradt, Sarah
  70. Risk Management in Agriculture: What Role for Governments? By Anton, Jesus
  71. Evidence from a UK supermarket chain By Paul C. Cheshire; Christian A. L. Hilber; Ioannis Kaplanis
  72. Genetic Contamination of Traditional Products By E. Kwan Choi
  73. The Status of Labor-Saving Mechanization in U.S. Fruit and Vegetable Harvesting By Huffman, Wallace E.
  74. PEER-EFFECTS IN OBESITY AMONG PUBLIC SCHOOL CHILDREN: A GRADE-LEVEL ANALYSIS By Asirvatham, Jebaraj; Nayga, Rodolfo M., Jr.; Thomsen, Michael R.
  75. A cost effective solution to reduce disaster losses in developing countries : hydro-meteorological services, early warning, and evacuation By Hallegatte, Stephane
  76. Yield trend estimation in the presence of non-constant technological change and weather effects By Conradt, Sarah; Bokusheva, Raushan; Finger, Robert; Kussaiynov, Talgat
  77. More Apples Less Chips? The Effect of School Fruit Schemes on the Consumption of Junk Food By Giorgio Brunello; Maria De Paola; Giovanna Labartino
  78. The environmental Kuznets curve for deforestation: a threatened theory? A meta-analysis By Johanna Choumert; Pascale Combes Motel; K. Herve DAKPO
  79. Minimizing geographical basis risk of weather derivatives using a multi-site rainfall model By Ritter, Matthias; Musshoff, Oliver; Odening, Martin

  1. By: El Benni, Nadja; Finger, Robert; Mann, Stefan
    Abstract: The study examines the effect of agricultural policy reforms on income variability of Swiss farmers. The observed heterogeneity in income risks across farms and time is explained with farm and regional characteristics. FADN data are used to construct coefficients of variation of total household income and gross revenues at farm-level over the period 1992-2009. Applying linear mixed effect models the effects of off-farm income, direct payments, farm size, specialisation and liquidity on gross revenue and household income variability in three different production regions are measured. The switch from market-based support to direct payments decreased the variability of farm revenues and household income. Off-farm income has a positive and farm size a negative effect on revenue risk. The opposite is true for household income risk. Specialisation increases revenue and household income risk. Direct payments serve as insurance for farmers and make them more willing to take risk from agricultural production.
    Keywords: income risk, agricultural policy, direct payments, Risk and Uncertainty, Q12, Q14, Q18,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122532&r=agr
  2. By: Helming, John F.M.; Peerlings, Jack H.M.
    Abstract: The objective of this research is to give insights into the production, income and environmental effects of the introduction of an EU flat rate for Dutch agriculture. For this purpose, a detailed agri-environmental programming model for Dutch agriculture is used. Results of the EU flat rate scenario are compared to a reference scenario that describes agricultural production in the Netherlands in 2020. Results show that total gross margin in Dutch agriculture decreases because of the EU flat rate with 7%. The supply of starch potatoes and cow milk decreases most. Production of seed and consumption potatoes, vegetables and intensive livestock products increases slightly. This is largely due to a shift of farm payments from milk and starch potatoes production to arable crops and vegetable production. It was found that including risk aversion of income volatility amplifies these effects. The flat rate decreases the total emissions of nutrients to the environment from agricultural production.
    Keywords: EU flat rate, mathematical programming, income volatility, Agricultural and Food Policy, Risk and Uncertainty, Q1, D8,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122481&r=agr
  3. By: Nose, Manabu; Yamauchi, Futoshi
    Abstract: Did the rise in food prices have a long-term impact on agricultural production? Using household-level panel data from seven provinces of Indonesia, this paper finds that the price shock created a forward-looking incentive to invest, which can dynamically enhance productivity in agriculture. It also finds that the impact of the price shock on investment behavior differs by initial wealth. In response to price increases, wealthy farmers invested more in productive assets, while poor farmers increased their financial savings as well as consumption. Price spikes relax liquidity constraints, which increases investments among the richer while do so savings and consumptions among the poor, possibly leading to diverging income inequality in the long run.
    Keywords: Emerging Markets,Markets and Market Access,Food&Beverage Industry,Regional Economic Development,Rural Poverty Reduction
    Date: 2012–05–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6065&r=agr
  4. By: Sauer, Johannes; Davidova, Sophia; Gorton, Matthew
    Abstract: This paper investigates the effect of land fragmentation on farm efficiency in Kosovo utilising agricultural household survey data. To recognise heterogeneity among agricultural production systems in Kosovo, we estimate the technology separately for different groups or “classes” of farms, identified using latent class modelling. This approach separates the data into multiple technological “classes” according to estimated probabilities of class membership based on multiple specified characteristics, relating in this case to land fragmentation and market integration. The latent class frontier method is linked to the estimation of a multi-output multi-input production function, namely a directional output distance function, and to the estimation of Morishima elasticities of substitution, based on shadow price changes indicating allocative efficiency changes. The analytical results confirm that the usual approach of using one homogenous function to estimate fragmentation effects is misleading and can lead to inappropriate policy recommendations. Three distinct classes of farm households are identified, which show different levels of efficiency and the proxies for land fragmentation and market integration show different signs over these classes.
    Keywords: Land fragmentation, market integration, farm households, Kosovo, Agricultural and Food Policy, Production Economics, Productivity Analysis, O13, Q12,
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:ags:aaea12:123236&r=agr
  5. By: Banik, Nilanjan; Biswas, Basudeb
    Abstract: This paper examines association between the cyclical component of agricultural output and rainfall in India. When the cause of food inflation is because of supply shortage driven by inadequate rainfall and poor irrigation facilities, then a contractionary monetary policy may lead to stagflation. Considering agricultural output and rainfall data from four states in India we find evidence in favor of association.
    Keywords: Agriculture output; Beveridge-Nelson Decomposition; Rainfall; India
    JEL: E31
    Date: 2012–04–28
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:38634&r=agr
  6. By: Boere, Esther; Peerlings, Jack H.M.; Reinhard, Stijn; Kuhlman, Tom; Heijman, Wim J.M.
    Abstract: Volatile output prices lead to a fluctuating shadow price (profitability) of agricultural land, and therefore may impact land use decisions in case of risk-averse behaviour. In this paper we assess the effect of volatile agricultural output prices on agricultural land-use change over the past decade in the Netherlands. Using regional data from 2000 through 2009, the number of hectares of land for 10 land uses was calculated. To determine the joint distribution of agricultural activities, hectares of land for each land use were converted to land share equations. Land share equations were estimated to determine the contribution of increased price volatility to land use change. Results show that larger volatility affects land shares negatively. Producer’s output responses, therefore, were consistently affected by risk-averse behaviour.
    Keywords: land-use, risk, price volatility, Risk and Uncertainty, Q1, D8,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122472&r=agr
  7. By: Dhehibi, Boubaker; Bahri, Haithem; Annabi, Mohamed
    Abstract: In this paper, farm level technical efficiency of production and its determinants are investigated in a sample of 51 cereal producing farms located in the main cereal production region in Tunisia using a stochastic frontier production model. Empirical findings show that labor input factor appears with a minimal effect on the production. The hypothesis of constant returns to scale is rejected at the 5% level of significance, and returns to scale were found to be decreasing. Moreover, the estimated coefficients in the technical inefficiency model are also as expected. The estimated coefficients of the instruction level of farmer and the rotation, technical variable, are negatives and statistically significant at 5% level, which indicates their positive effect on technical efficiency. In addition, results indicated that estimated technical efficiency of cereal production in the sample varied widely, ranging from 52.63% to 94.62, with a mean value of 77%. This suggests that, on average, cereal producing farmers could increase their production by as much as 23% through more efficient use of production inputs. On a second step, Timmer and Kopp indexes of technical inefficiency were estimated for the same farms using a Cobb–Douglas frontier production function with a composite error term, and a developed relationship between these two indices. Results show that the mean values of the Timmer and Kopp TE indices were over 0.80, but one half of the farms were below 0.80 for the Timmer index and below 0.83 for the Kopp index. The level of inefficiency was found to be related to farm size: small and large farms were shown to be more technically efficient than medium-sized farms. With the given inputs, the production of cereals could be increased by 20% on average through making all farms 100% efficient. Alternatively, inputs could be reduced by 17% on average to produce the same amount of cereal output. Finally, the lower level of efficiency but higher yield and total factor productivity in the medium-sized farms means that more cereals can potentially be produced in these farms. The findings revealed that significant factors related to TFP were age, education level and the share of wheat crops into total cropped area. These results calls for policies aimed at provision of training programs, extensions services. In addition, the encouragement of experienced farmers by applying improved input management on these farms can be recommended alongside appropriate new technologies, especially for wheat farmers.
    Keywords: Technical efficiency, Timmer index, Kopp index, TFP, Cereal farms, Tunisia, Agricultural and Food Policy, Farm Management, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, C43, O47, Q12,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:iaae12:122866&r=agr
  8. By: Sabbag, Omar Jorge; Lima Costa, Silvia Maria Almeida; Silveira, Alexandre Ninhaus
    Abstract: Just follow the poster to be presented at IAAE 2012.
    Keywords: Fish farming, diagnostic analysis, regional development., Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:iaae12:123218&r=agr
  9. By: Fuss, Sabine; Havlik, Petr; Szolgayova, Jana; Obersteiner, Michael; Schmid, Erwin
    Abstract: Agricultural price volatility has moved to the forefront of research efforts and political discussion, where much work is already being undertaken with respect to the impact of fluctuations in input prices (e.g. fertilizer, feed and energy). In this paper we also want to take into account the impact of climate change on prices via increased volatility in crop yields. In addition, we analyze the impact of having multiple objectives competing for the land on which crops are grown. In particular, we want to address the concerns that have been voiced about biofuel targets and calls for prioritization of food security.
    Keywords: energy, food security, food price volatility, optimization under uncertainty, Risk and Uncertainty, Q12, Q18, Q28, C61, D81,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122539&r=agr
  10. By: Pigeon, Mathieu; Frahan, Bruno Henry de; Denuit, Michel
    Abstract: Recently, the European Commission proposed to introduce several risk management tools in the rural development pillar 2 of the CAP. One of them consists in providing co-financing support to mutual funds compensating farmers who experience a severe drop in their farm income. This paper analyses this new farm income stabilization tool for the Walloon region in Belgium, considering separately three groups of farms (crop, dairy and cattle farms). Relying on FADN data from 1997 to 2007, this analysis focuses on estimating the probability that such regional mutual funds would need to intervene to compensate farm net incomes and, in that case, the expected amount of each farm income compensation and the total expected amount of compensation. The budgetary compensation that would be required if an income insurance scheme was implemented to compensate Walloon farmers for their income losses is evaluated. Particular attention is paid to the cyclical pattern as well as to additional requirements that could be imposed to the EU income stabilisation tool.
    Keywords: agricultural risk management, income stabilisation, Belgium, European Union, Risk and Uncertainty, D81, Q12, Q18.,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122485&r=agr
  11. By: Mela, Giulio; Longhitano, Davide; Povellato, Andrea
    Abstract: Interest towards farmland market has been increasing in recent years. In developing countries there is rising concern about land being purchased by foreign investors, while in the developed world the debate is centred on whether agricultural factors are still the main determinants of land values or not. This work assesses the determinants of land values in Italy using panel data techniques during the time span 1992-2010. In Italy farmland values have historically been influenced more by natural characteristics of the land than agricultural prices. However, lately non-agricultural factors have been increasing their importance. We find that agricultural prices only slightly affect average land values in Italy. Main determinants of land prices are the yield from real estate investment, GDP per capita, house prices, and population density. For arable land also environmental regulations for livestock farms positively affects values.
    Keywords: farmland prices, land market, panel data models, farmland values determinants, Risk and Uncertainty, C23, E32, Q24.,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122479&r=agr
  12. By: Anderson, Duncan J.; Jack, Claire G.; Connolly, Niamh
    Abstract: The European dairy industry faces an increasingly uncertain world. There is uncertainty about, for example, subsidy payment levels and compliance conditions, global competition, price variability, consumer demand, carbon footprints, water quality, animal welfare, food safety, and the environment. Farmers can reduce their exposure to these uncertainties by adopting production systems that are financially versatile over a wide range of possible circumstances. In this research project we develop a profit maximizing whole-farm model and employ it to identify financially optimal milk production systems for a typical Northern Ireland farm under varying market, policy and farm family conditions. The systems assessed range from lower yielding New Zealand type systems based on grazed grass to very high yielding North American type systems based on concentrates and conserved forage. The model also incorporates a disaggregated specification of time use within farm households and links intra-household human resource allocation to the process of agricultural technology adoption. Model results indicate that the optimal dairy system for a typical Northern Ireland farm is one that is somewhere between the extremes of those systems adopted in North America and New Zealand. Moderate input-moderate output milk production systems (i.e. 7,000 to 8,000 litre yields) are shown to be financially robust over a wide range of milk prices, concentrate prices, fertilizer prices, and farm family conditions. Low input-low output (New Zealand style) and high input-high output (North American style) systems are found to be less financially versatile.
    Keywords: farm modelling, production systems., Farm Management, Risk and Uncertainty, Q12 and Q16.,
    Date: 2012–02–24
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122460&r=agr
  13. By: Carpentier, Alain; Gohin, Alexandre; Heinzel, Christoph
    Abstract: For the 2014-2020 phase of the Common Agricultural Policy, the European Commission has the opportunity to reduce the leakage of public support to landowners and to better target it towards active farmers. Our purpose is to assess whether shifting the basis of direct payments from land towards active farmers will significantly alter agricultural production decisions. In a dynamic and stochastic microeconomic framework, we identify the impact of this shift on the farm household’s production and consumption decisions. In the dynamic setting the production impacts of direct payments are much higher than previously quantified, because the “long run” absolute risk aversion (associated with the value function) is lower than the “short run” one (associated with direct utility). In our dynamic setting, the impact profiles are opposed for initially poor and initially wealthy farmers, due to their different precautionary motives. Leakage to land owners is lower with an active-farmer than with a land subsidy, so that the production impact is higher.
    Keywords: Risk and Uncertainty,
    Date: 2012–02–24
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122447&r=agr
  14. By: Bachev, Hrabrin
    Abstract: This paper presents issues and challenges for farm and enterprise diversification and integration of small scale farmers into value chains in East Europe and Central Asia (EECA). First, it discuses context and approaches to agricultural and rural income diversification. Second, it assesses the extent of agricultural diversification in EECA. Third, it identifies issues, challenges and lessons learnt of the integration of small farmers into agricultural value chains in the region. Forth, it outlines options and areas of intervention to foster diversification and market inclusion of smallholders in EECA. Finally, it concludes with recommendations for improvement of public policies and international assistance.
    Keywords: farm and income diversification; smallholders market inclusion; East European and Central Asian farming transformation; agrarian policies
    JEL: Q17 Q13 P27 R12 Q12 Q18
    Date: 2012–01–02
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:38683&r=agr
  15. By: Briner, Simon; Finger, Robert
    Abstract: Applying a bio-economic whole farm model we assess the impact of price and weather risk as well as different risk management strategies on the variability of the income in Swiss suckler cow production. We consider different on-farm risk management strategies such as the flexible adjustment of herd size, fodder composition and feed stocks, as well as an income insurance. Our results show that without any risk-management income variability is rather high, with coefficient of variation (CV) of income ranging from 26% to 31%. Taking on-farm risk management strategies into account it is possible to reduce income variability significantly (CV 12-15%), but causes only low reductions of mean income levels. Our results also indicate that income insurance is not attractive for farmers Our results thus suggest that in particular promoting better access to markets for feed stuff provides an valuable opportunities for farmers to manage income risks.
    Keywords: Weather risk, Bio-economic whole farm model, Suckler cow, Income insurance, Farm Management, Risk and Uncertainty, Q12, Q18,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122547&r=agr
  16. By: Himics, Mihaly; Van Doorslaer, Benjamin; Ciaian, Pavel; Shrestha, Shailesh
    Abstract: In this paper the impact of possible input cost developments on the EU agriculture is analysed under ceteris paribus conditions. Two scenarios are developed with the partial equilibrium model CAPRI. The scenarios assume symmetric input price changes in positive and negative directions around a projected baseline in year 2020. The magnitude of the input price changes are based on observed volatility. To measure the volatility, the annual time-series of the CoCo database were analysed, which contains input cost estimates for a multitude of agricultural activities and cost categories at the geographical level of the EU countries. Our results suggest that the uncertainty in input cost development has a strong potential to affect commodity market balances and farm incomes. There is an ongoing discussion about possible policy measures to mitigate the negative impacts of price volatility on farm incomes. This study contributes to this discussion by estimating a share of 17 billion euros of EU agricultural income being put on risk every year. The analysis also identifies vulnerable regions and production technologies that are particularly affected by input price instability. It remains for further research to perform a systematic sensitivity analysis in order to explore the impact of input cost volatility fully on the model outcomes.
    Keywords: input costs, volatility, CAPRI, farm income, Risk and Uncertainty, Q13,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122531&r=agr
  17. By: Liesivaara, Petri; Myyra, Sami; Jaakkola, Antti
    Abstract: Whole-farm income insurances are promoted in the new post-2013 Common Agricultural Policy (CAP). The current Crop Damage Compensation (CDC) scheme in Finland covers crop failure for farmers who have suffered losses and applied for the payments. This paper analyses the use of the Income Stabilisation Tool (IST) and compares it to the current CDC scheme in Finland. The Finnish Farm Accountancy Data Network (FADN) is used to simulate the costs of IST compensation payments. Special attention is paid to pig farms and their possibilities to manipulate the IST. Results show that the IST is triggered with a high frequency on Finnish farms. The IST would be more costly than the current CDC programme. The results also suggest that the IST would act as an income transfer policy if farmers could influence their annual income. However, the efficiency of the IST as an income transfer policy is questionable due to its large transaction cost.
    Keywords: Income stabilization tool, moral hazard, Farm Accountancy Data Network, Farm Management, Risk and Uncertainty, Q14,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122537&r=agr
  18. By: Shrestha, Shailesh; Himics, Mihaly; van Doorslaer, Benjamin; Ciaian, Pavel
    Abstract: The current paper investigates the medium term impact of climate changes on EU agriculture. We employ CAPRI partial equilibrium modelling framework. The results indicate that within the EU, there will be both winners and losers, with some regions benefitting from climate change, while other regions suffering losses in production and welfare. In general, there are relatively small market effects at the EU aggregate. For example, the value of total agricultural income, land use and welfare change by approximately between -0.3% and 2%. However, there is a stronger impact at regional level with the effects increase by a factor higher than 10 relative to the aggregate EU impacts. The price adjustments reduce the response of agricultural sector to climate change in particular with respect to production and income changes.
    Keywords: climate change, regional impacts, CAPRI, market effects, Risk and Uncertainty, Q54,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122546&r=agr
  19. By: Nora Lustig (Division of Policy and Practice,UNICEF)
    Abstract: After three consecutive decades of decline, world prices of food commodities have risen over the past few years at an alarming pace. Rising food prices are a cause of major concern because high food prices bring significant and immediate setbacks for poverty reduction, nutrition, social stability, inflation and a rules-based trading system. Food prices are unique since food is unlike any other good. Food is essential for survival; it is the most basic of basic needs
    Keywords: child poverty, child disparities, policy design, measuring poverty, development strategies,food prices,basic needs,poverty reduction, nutrition, social stability
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:uce:wbrief:1201&r=agr
  20. By: Schroeter, Christiane; Cai, Xiaowei
    Abstract: Over the past two decades, U.S. food retailers are providing more organic private label foods (PLs) which are directly competing with the National Brand (NB) products. From a policy perspective, an increased availability of high-quality PL products might provide consumers with a more affordable way to cover their produce consumption. Using a two-step Heckman selection model, we estimate the impact of purchase information, demographics, and food environment on the purchasing likelihood and expenditure shares of PL organic vs. conventional spinach. Results show that food context, most notably food availability, access, and adult obesity rate, significantly influences organic PL spinach choice.
    Keywords: Brand Loyalty, Quality, Private label, Food Environment, Food Consumption/Nutrition/Food Safety, I18, D12, R23,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:aaeafe:123197&r=agr
  21. By: Enjolras, Geoffroy; Capitanio, Fabian; Aubert, Magali; Adinolfi, Felice
    Abstract: Volatility of farm income represents a major challenge for farm management and the design of public policies. This paper measures the extent to which risk management tools, especially direct payments and crop insurance, can significantly reduce crop income volatility in France and in Italy. We use an original dataset of 9,555 farms for the period 2003-2007 drawn up from the Farm Accountancy Data Network (FADN) and three different econometric models to explain the volatility of crop income. The results are contrasted between the specialization of the farms and the two countries: Italian farms use management tools (CAP payments and crop insurance) so as to improve their income and to reduce its volatility (crop insurance, inputs). French farms use the same instruments to increase their income and therefore its volatility while they tend to substitute CAP payments to production. These results question the efficiency of structural policies aimed at stabilizing the farmers' income.
    Keywords: Volatility, Direct payments, Insurance, France, Italy, FADN, Risk and Uncertainty, G22, Q14, Q18,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122478&r=agr
  22. By: Loy, Jens-Peter; Holm, Thore; Steinhagen, Carsten
    Keywords: Vertical Price Transmission, Threshold Error Correction Model, Dairy Products, Brands, Retail Market, Germany, Agribusiness, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Marketing, C32, D21, L11, L81,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:aaea12:123284&r=agr
  23. By: Costanigro, Marco; Kroll, Stephan; Thilmany, Dawn D.
    Abstract: We endowed consumers with conventional apples and auctioned local, organic and organic-local apples to elicit consumers’ valuation and the response to two experimental treatments: scientific information and taste. For both labels, which participants valued as partial substitutes, positive WTP is conditional on distrusting the governmental food agencies. Information documenting the inconclusive scientific evidence in favor of organic and local production has little effect; while participants with positive valuation reacted to organoleptic characteristics only when the new information favored the labeled apples. The observed behavior is more consistent with polarization against conventional products, rather than in favor of local and organic.
    Keywords: Food Consumption/Nutrition/Food Safety,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:aaeafe:123199&r=agr
  24. By: Pascal Grouiez (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: This article discusses the fact that as Russian farms have been developing multifunctionalities since 1991 this has to be considered as a twofold strategy: the first goal being expand the activities of some institutionally selected enterprises and the second being to reproduce some "communities of interests". The primary observation highlights a characteristic fact: there are several "non-economic" functions carried out by farms that depend on their nature (type of ownership, size of the farm, etc). This analysis leads to the establishment of a link between the very nature of these functions and the existence of constraints and opportunities offered by the economic and social environment. Then, the concept of "productive configuration" is applied to study organization strategies used by several actors in the Orel oblast' and to identify four strategies organizing the relationship between food production and collective welfare creation, each configuration showing an institutional arrangement to secure the continuity and development of farms in a highly competitive context.
    Keywords: Productive Configuration ; Mutlfunctionality ; Agroholding in Russia
    Date: 2012–05–04
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00694352&r=agr
  25. By: Ole Boysen (Institute for International Integration Studies, Trinity College Dublin)
    Abstract: This article estimates a household demand system for Uganda from cross-sectional household survey data. More specifically, a 13 item two-stage demand system model is estimated for rural and urban households separately where the main second-stage is represented by a Quadratic Almost Ideal Demand System which accounts for socio-demographic household characteristics and censoring and focuses on food items. Elasticities are calculated for three household expenditure groups as well as for the aggregate. We find that food expenditures tend to be more elastic for poorer households than for richer ones. All foods are generally price inelastic and price elasticities tend to decrease with rising expenditure level. A number of substitutional and complementary relationships between food items are identified.
    Keywords: Uganda, quadratic almost ideal demand system, elasticities
    JEL: O55 C31 C34
    Date: 2012–03
    URL: http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp396&r=agr
  26. By: Chia-Lin Chang (Department of Applied Economics, Department of Finance, National Chung Hsing University Taichung, Taiwan); Michael McAleer (Econometric Institute, Erasmus School of Economics, Erasmus University Rotterdam and Tinbergen Institute, The Netherlands, Department of Quantitative Economics, Complutense University of Madrid, and Institute of Economic Research, Kyoto University.); Roengchai Tansuchat (Faculty of Economics Maejo University Chiang Mai, Thailand)
    Abstract: This paper estimates a long memory volatility model for 16 agricultural commodity futures returns from different futures markets, namely corn, oats, soybeans, soybean meal, soybean oil, wheat, live cattle, cattle feeder, pork, cocoa, coffee, cotton, orange juice, Kansas City wheat, rubber, and palm oil. The class of fractional GARCH models, namely the FIGARCH model of Baillie et al. (1996), FIEGARCH model of Bollerslev and Mikkelsen (1996), and FIAPARCH model of Tse (1998), are modelled and compared with the GARCH model of Bollerslev (1986), EGARCH model of Nelson (1991), and APARCH model of Ding et al. (1993). The estimated d parameters, indicating long-term dependence, suggest that fractional integration is found in most of agricultural commodity futures returns series. In addition, the FIGARCH (1,d,1) and FIEGARCH(1,d,1) models are found to outperform their GARCH(1,1) and EGARCH(1,1) counterparts.
    Keywords: Long memory, agricultural commodity futures, fractional integration, asymmetric, conditional volatility.
    JEL: Q14 Q11 C22 C51
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:ucm:doicae:1210&r=agr
  27. By: Ogundari, Kolawole; Abdulai, Awudu
    Abstract: Over the past three decades, several studies have analyzed the response of calorie intake to income with varying and inconclusive results. This paper review these studies and employs meta-analysis to examine the potential bias in the calorie-income elasticity, as well as the impact of specific study attributes on these elasticities reported in the empirical literature. A total of 40 studies which yielded 99 estimated elasticities were considered. The results show the presence of publication (reporting) selection bias in the reported elasticities. Besides, the estimates revealed evidence of positive and significant empirical effect of income on calorie intake from all the studies that goes beyond publication bias. Study attributes such as ranking of the journal, panel data used in the analysis, whether expenditure was used as proxy for income, year of primary survey, sample size, and numbers of the years of primary data were found to have significant impacts on the reported calorie-income elasticities in the literature.
    Keywords: Calorie-income elasticity, heterogeneity, meta-analysis, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, D12, C01,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:iaae12:123287&r=agr
  28. By: Chia-Lin Chang; Michael McAleer (University of Canterbury); Roengchai Tansuchat
    Abstract: This paper estimates a long memory volatility model for 16 agricultural commodity futures returns from different futures markets, namely corn, oats, soybeans, soybean meal, soybean oil, wheat, live cattle, cattle feeder, pork, cocoa, coffee, cotton, orange juice, Kansas City wheat, rubber, and palm oil. The class of fractional GARCH models, namely the FIGARCH model of Baillie et al. (1996), FIEGARCH model of Bollerslev and Mikkelsen (1996), and FIAPARCH model of Tse (1998), are modelled and compared with the GARCH model of Bollerslev (1986), EGARCH model of Nelson (1991), and APARCH model of Ding et al. (1993). The estimated d parameters, indicating long-term dependence, suggest that fractional integration is found in most of agricultural commodity futures returns series. In addition, the FIGARCH (1,d,1) and FIEGARCH(1,d,1) models are found to outperform their GARCH(1,1) and EGARCH(1,1) counterparts.
    Keywords: Long memory; agricultural commodity futures; fractional integration; asymmetric; conditional volatility
    JEL: C22 C51 Q11 Q14
    Date: 2012–05–03
    URL: http://d.repec.org/n?u=RePEc:cbt:econwp:12/09&r=agr
  29. By: Liu, Xiaoliang; Filler, Guenther; Odening, Martin
    Abstract: The sharp increase in agricultural commodity prices in 2008 and in 2011 has triggered an intensive debate on the causes for these price booms. Speculative bubbles have been quoted as one factor among others for the price peaks. Against this background, our paper contributes to this discussion by implementing a novel test procedure for speculative bubbles which has been suggested in the stock market literature. We use a regime switching regression model to test the hypothesis that agricultural prices are driven by periodically collapsing bubbles. The analysis is conducted for wheat, which is one of the most important crops worldwide. Our results show that the data do not support this particular bubbles hypothesis.
    Keywords: Agricultural commodity market, net convenience yield, speculative bubbles, regime switching, fundamental values., Risk and Uncertainty, C12, Q13, Q14,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122554&r=agr
  30. By: Finger, Robert
    Abstract: The level of natural hedge, i.e. the (negative) correlation between price and yield levels, is an important determinant for farmers’ income risks and their demand for risk management instruments. The natural hedge is often approximated with correlations observed at more aggregated levels, e.g. the county level. This induces biases because the natural hedge at the farm-level is smaller than on more aggregated levels. In this paper, we put this idea one step forward and investigate the empirical relationship between price-yield correlations and the underlying crop acreage, using farm-level data for 5 crops in Switzerland. We find that, for instance, a 1% increase in area under maize and intensive barley leads to a change in the correlation by -0.02 and -0.08, respectively. Thus, larger farms have a stronger natural hedge. Using a revenue insurance example, we show that this information can be used to adjust insurance premiums for each farm.
    Keywords: price-yield correlation, aggregation bias, crop insurance, Risk and Uncertainty, Q1, G2,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122538&r=agr
  31. By: Sporri, Martina; Barath, Lajos; Bokusheva, Raushan; Ferto, Imre
    Abstract: Crop insurance products can improve and stabilize economic performance. However, due to insurance market imperfections, the use of insurance products often requires governmental support. This paper analyses the actual impact of insurance products on the economic performance of cropping farms by linking the economic performance model with the insurance demand model. For this analysis, a simultaneous equation system is solved. Our estimations show a negative impact of insurance on the economic performance indicators farm profit, labour productivity and land productivity. The analysis of the insurance demand side confirms financial limitations of many farms.
    Keywords: Hungary, Crop Insurance, 2SCML, Impact evaluation, Risk and Uncertainty, Q12, Q14, G22,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122525&r=agr
  32. By: Lehmann, Niklaus; Finger, Robert
    Abstract: We investigate impacts of climate change (CC) and likely increases in price risks on income, income variability, utility and on adaptation responses in crop production in Western Switzerland. To this end, a bio-economic model is used that combines a crop growth model with an economic decision model non-parametrically using genetic algorithms. Our analysis focuses on the farm-level, which enables us to integrate a much wider set of potential adaptation responses in our analysis. The model is applied to four scenarios that represent likely changes in environmental conditions due to CC as well as increasing price risks due to market liberalization, and combinations thereof. It shows that CC has the larger influence on farm-level income and utility as well as on management decisions. In contrast, the increasing price variability has only small impacts on input use. However, both CC and increasing price volatility contribute to an increasing farm-level income risk.
    Keywords: Genetic Algorithms, Agricultural Modeling, Climate Change, Price risks, Risk and Uncertainty, Q12,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122533&r=agr
  33. By: Mela, Giulio; Canali, Gabriele
    Abstract: This work uses cointegration techniques allowing for structural breaks to assess the extent to which the Fischler reform of the CAP increases price transmission elasticity (PTE) between the world and European corn, wheat, and soybean markets. Results show that the reform increased PTE in the case of corn and wheat, while its impact was negligible for soybeans. However, the long-term relationship (cointegration) between world and European prices can be detected only taking into account – other than the Fischler reform’s structural break – also the fact that world commodity markets were interested, in 2003-04 and 2007-08, by price bubbles. In particular the latter affected the world – European corn price relationship in the ascending phase, while the wheat and soybeans markets in the descending phase.
    Keywords: cointegration, structural breaks, agricultural commodity prices, Fischler CAP reform, Risk and Uncertainty, C22, Q02, Q18, O13.,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122480&r=agr
  34. By: Hernandez, Manuel A.; Ibarra, Raul; Trupkin, Danilo R.
    Abstract: This paper examines the dynamics of volatility across major global exchanges for corn, wheat, and soybeans in the United States, Europe, and Asia. We follow a multivariate GARCH approach and account for the potential bias that may arise when considering exchanges with different closing times. The results indicate that agricultural markets are highly interrelated and there are both own- and cross-volatility spillovers and dependence among most of the exchanges. Chicago particularly plays a major role in terms of spillover effects over other markets. Additionally, the level of interdependence between exchanges has only increased in recent years for some commodities.
    Keywords: Volatility transmission, agricultural commodities, futures markets, Multivariate GARCH, Risk and Uncertainty, Q11, G15, C32,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122511&r=agr
  35. By: Kobus, Pawel
    Abstract: The paper deals with the problem of modelling yield risk measures for major crop plants in Poland. Hence, in some cases the gamma distribution offers a better fit to the data than normal distribution, and in addition to linear models, generalized linear models were also used. The research was based on data from Polish FADN, with sample sizes ranging from 416 up to 2300, depending on the crop plant. It was found that models based on the farm level data, can explain on average 20% of variation coefficient unevenness. The most important variables were average yield, type of farming, arable area and land quality. The elimination of the average yield from the models reduced the average determination coefficient to about 9%.
    Keywords: production risk, risk measures, yield distribution, Risk and Uncertainty, Q10, C46,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122535&r=agr
  36. By: Rosa, Franco; Vasciaveo, Michela
    Abstract: The aim of this paper is to analyse the volatility and interactions among prices of agricultural commodities in Italy and US using the time series analysis. The cross market interactions are examined to test the hypothesis that the increased volatility of agricultural prices has been caused by crude oil price, then the cointegration and causality among different markets is also tested. For this analysis the spot prices of wheat, corn, soybeans in US and Italy and crude oil prices spanning from 2002 to 2010 are used. The results suggest the following considerations: i) the existence of causality in US markets with exogeneity of the oil on the US agricultural commodities, ii) evidence of cointegration between US and Italian commodities, suggesting a condition of market efficiency, iii) no evidence of cointegration between oil and Italian agri-commodities. The conclusion is that the oil volatility is transmitted to the US Ag- markets while US Ag- markets have influenced the volatility of the Italian agricultural markets.
    Keywords: time series analysis, agricultural commodity prices, linear and nonlinear Granger causality, market integration, Risk and Uncertainty, C14, C19, Q13,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122530&r=agr
  37. By: Gilbert, Christopher L.
    Abstract: Plenary presentation from 123rd EAAE Seminar, 23-24 February, Dublin, Ireland
    Keywords: Risk and Uncertainty,
    Date: 2012–02–24
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122775&r=agr
  38. By: Quattri, Maria A.
    Abstract: The availability of enabling institutions, information systems and infrastructure is a precondition to enhance agricultural markets’ efficiency, and make market actors less vulnerable to price instability. This paper investigates whether the focus on institutional and technological upgrading is enough to make Ethiopian agricultural markets more efficient. In particular, given that a requirement for exchange efficiency is the lack of unexploited mutually beneficial spatial arbitrage opportunities, we look for evidence of increasing returns to transaction size and returns to scale in transport using detailed trader surveys collected in 2001 and 2007. Whilst transport costs could be reduced by assembling loads and avoiding trans-shipments for the transporters, we find no evidence that transport and handling costs are a source of increasing returns to transaction size. Hence, the presence of many small market intermediaries is not a source of inefficiency in Ethiopia, and concentration in market intermediation is not necessary for social efficiency.
    Keywords: Ethiopia, market efficiency, International Development, Risk and Uncertainty, O13, Q13,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122512&r=agr
  39. By: Perez Blanco, Carlos Dionisio; Gomez Gomez, Carlos Mario
    Abstract: Water is a key input in the production of many goods and services and under certain conditions can become a critical limiting factor with significant impacts on regional development. This is the case of many agricultural European Mediterranean basins, where water deficit during drought events is partially covered by illegal abstractions, mostly from aquifers, which are tolerated by the authorities. Groundwater overexploitation for irrigation has created in these areas an unprecedented environmental catastrophe that threatens ecosystems sustainability, urban water supply and the current model of development. Market-based drought insurance systems have the potential to introduce the necessary incentives to reduce overexploitation during drought events and remove the high costs of the drought indemnity paid by the government. This paper develops a methodology to obtain the optimum risk premium based on concatenated stochastic models. The methodology is applied to the agricultural district of Campo de Cartagena (Segura River Basin, Spain). Results show that the prices in a hypothetic competitive private drought insurance market would be reasonable and the expected environmental outcomes significant.
    Keywords: Drought insurance, stochastic models, groundwater, agriculture, Risk and Uncertainty, Q15, Q18, Q25, Q51, Q58,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122453&r=agr
  40. By: Bathla, Seema
    Abstract: Globalization and trade liberalization have exposed agricultural sector of many developing countries to sudden disturbances, caused not just by demand-supply conditions within their economies but also by volatility in global commodity prices, exchange rate and surge in imports. This paper evaluates the magnitude of sensitivity of Indian agriculture to these factors, and explores policy options that may neutralize their adverse effects, maintain price incentives and stability. The analysis is undertaken for one important tradable commodity viz. wheat by applying a structural econometric model, separately under the exportable and importable scenarios from 1980-81 to 2009-10. Findings reveal wheat to be increasingly driven by an incentive structure based on its linkages with world price, exchange rate and other factors. Counterfactual simulation experiments indicate that due to trade and sector-specific policies, wheat price and output tend to be much more resilient to fluctuations in international price and other shocks compared to its exports and imports.
    Keywords: Agricultural trade, Price transmission, Volatility, Macroeconomic policies, International Relations/Trade, Risk and Uncertainty, Q17, C22, E69, E60,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122543&r=agr
  41. By: Shen, Zhiwei; Odening, Martin
    Abstract: The implementation of index-based crop insurance is often impeded by the existence of systemic risk of insured losses. We assess the effectiveness of two strategies for coping with systemic risk: regional diversification and securitization with catastrophe (CAT) bonds. The analysis is conducted in an equilibrium pricing framework which allows the optimal price of the insurance and the number of traded contracts to be determined. We also explore the role of basis risk and risk aversion of market agents. The model is applied to a hypothetical area yield insurance for rice producers in northeast China. If yields in two regions are positively correlated, we find that enlarging the insured area leads to an increasing insurance premium. Unless capital market investors are very risk averse, a CAT bond written on an area yield index outperforms regional diversification in terms of certainty equivalents of both farmers and insurers.
    Keywords: crop insurance, systemic risk, risk pooling, securitization, Risk and Uncertainty, Q11, Q14,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122555&r=agr
  42. By: Savage, Jeff; Ribaudo, Marc
    Abstract: We use data from the ERS-NASS ARMS surveys to compare the use of best management practices on poultry and livestock farms inside the watershed and outside the watershed. Animal operations within the Chesapeake Bay States were found to be adopting some important manure management practices at a greater rate than operations outside the watershed. Adoption was taking place before the implementation of the TMDL, indicating that farmers may have been acting in response to building public pressure to reduce pollution.
    Keywords: Chesapeake Bay, confined animal operation, water quality, Environmental Economics and Policy, Livestock Production/Industries,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:aaea12:123246&r=agr
  43. By: von Ledebur, Oliver; Schmitz, Jochen
    Abstract: In this contribution, the development of price volatility on German agricultural markets is analyzed. We quantify the degree of price volatility for selected German agricultural markets and determine how it evolves over time and search for policy driven structural changes in volatility levels measured by the historical volatility. Based on annualised historical volatilities t test were performed to identify if the change in the volatility levels show any relationship to the process of reform of the CAP. An increase in volatility could be identified for the main German markets regulated by the Common Market Organisations. A positive relationship among the reform process of the CAP and the changes of the volatility levels could be identified particularly for the cereals markets.
    Keywords: volatility, German agricultural markets, agricultural policy, Risk and Uncertainty, Q11, Q13, Q18,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122534&r=agr
  44. By: Herath, Deepananda P.B.; Aubeeluck, Ashwina
    Abstract: The association between regulatory stringency and the industry structure of health food sectors across 15 countries is explored. The potential reasons for scale bias in regulatory compliance in the health food sector are discussed and evidences from other manufacturing sectors are presented. The Herfindahl–Hirschman Index (HHI) is estimated to measure the health food sector market concentration using the retail sales of the fortified/functional packaged foods and fortified/functional beverages. An index to measure the stringency in the health food sector regulation across the 15 countries is developed capturing the various aspects of such regulations. No robust association is found between market concentration and regulatory stringency in the health food sector. Some potential reasons for absence of this association is discussed.
    Keywords: Food Consumption/Nutrition/Food Safety,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:aaeafe:122733&r=agr
  45. By: Wocken, Meike; Kneib, Thomas
    Abstract: This study examines the effect of European intervention politics in the European butter market in the context of market liberalization using the example of Germany. A heteroscedastic Tobit model is estimated using German butter market data from 1973-2010. There is evidence that price support has reduced price instability in the butter market. Simulation indicates that enhancing intervention price causes an increase in the expected butter price in the long-run, even though if market price is higher than intervention level. We find changing effects of stockpiling. If difference between market and intervention price is small and stock quantity is high, it significantly contributes to reducing price volatility. On the contrary if price difference is large and stock quantity low, the effect of reducing price volatility decreases.
    Keywords: Censored regression, market liberalization, butter market, Agricultural and Food Policy, Risk and Uncertainty, C5, D4, Q11.,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122528&r=agr
  46. By: Andersen, Laura M.; Smed, Sinne
    Abstract: In this paper we investigate preferences for fat in milk through a structural characteristics model. The data includes information about daily purchases and social and demographic characteristics of more than 1,100 households. We find that consumers who prefer milk with a high fat content do not react to information about health effects, but can be influenced by prices, while consumers who prefer milk with a low share of fat are influenced by information, but are less price sensitive. Therefore, when attempting to decrease consumption of fat from milk, prices are more efficient than information.
    Keywords: Fat in milk, Characteristics model, hedonic prices, information, panel data, Food Consumption/Nutrition/Food Safety, D12,
    Date: 2012–02
    URL: http://d.repec.org/n?u=RePEc:ags:aaeafe:122728&r=agr
  47. By: Maitre d'Hotel, Elodie; le Cotty, Tristan; Jayne, Thomas S.
    Abstract: The 2007-2008 food crisis and current food price swings led economists to re-evaluate the potential for policy instruments to manage food price volatility. Many developing countries recently pursued price regulation policies, but the difficulties of these policies in promoting price stability is not fully understood. In particular, the ability of a stabilization policy to lower food price volatility does not depend on the nature of the policy instrument only, but also on the institutional conditions of its implementation. Kenya is a particularly interesting case as it is characterized by a rather long tradition of public intervention, and by the persistence of highly volatile prices. The consistency of the policy use appears to be key factor influencing the degree of price volatility. Applied to trade policies, this consistency is defined by the temporal relationship between the tariff level and the international price changes. To test the influence of policy consistency on price volatility, we develop an autoregressive conditionally heteroskedastic model of price determination in which prices and prices volatility are jointly estimated, using monthly data over the 1994-2009 period in Kenya.
    Keywords: volatility, predictability, consistency, food, policy, Kenya, Food Security and Poverty, International Development, Risk and Uncertainty, D84, Q13, Q18,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122551&r=agr
  48. By: Thorne, Fiona S.
    Abstract: The supply and demand factors affecting the farm level price for Irish potatoes has undergone considerable change in the last two decades. On the demand side, per capita consumption has decreased by almost a half, and the use of potatoes has shifted from consumption of table stock potatoes towards greater levels of processed potato products. On the supply side, domestic production levels of potatoes decreased by just over 30 percent, whilst grower numbers decreased by greater than 75 percent over the same period. Against this background of significant changes in domestic consumption levels and patterns and domestic production of potatoes this paper examines the effect of these factors on potato price levels and variability. Farm level price and volatility is a concern for a number of reasons as it adds challenges for business planning, debt repayment, and, in some cases, solvency. Farm level price data and supply and use balance sheet data from Eurosta are used in an ARCH modelling framework to quantify and examine the factors affecting potato price mean levels and volatility.
    Keywords: Risk and Uncertainty,
    Date: 2012–02–24
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122473&r=agr
  49. By: Delpierre, Matthieu; Verheyden, Bertrand; Weynants, Stephanie
    Abstract: Empirical evidence on developing countries shows on the one hand that rich farm-households are more keen to adopt new technologies and are higher risk takers than poor households. On the other hand, however, they are shown to be less vulnerable to income shocks than poor farmers. This paper provides a rationale for these observations. Risk averse agents, heterogeneously endowed with wealth, non-cooperatively decide on their level of subscription to risk-sharing and on the degree of individual production risk they take. Rich households take more risks and subscribe more to risk-sharing. Although risk-sharing allows all households to cope with idiosyncratic shocks, the risk-taking behavior of rich households increases the covariate component of poor households' income variance through risk-sharing, deterring the participation of the poor. These poor households in turn opt for safer but less productive production plans.
    Keywords: Risk-taking, risk-sharing, technology adoption, farm household, International Development, Risk and Uncertainty, O12, O13, O17, O33,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122556&r=agr
  50. By: Dutko, Paula; Ver Ploeg, Michele; Farrigan, Tracey L.
    Abstract: Applying a census tract-level definition of food deserts, areas with limited access to affordable and healthy food, ERS has identified over 6,500 food desert tracts in the U.S. based on data from the 2000 Census of the Population. In this report, we examine the socioeconomic and demographic characteristics of these tracts to see how they differ from other tracts. We describe the demographic and socioeconomic characteristics of food desert census tracts compared with all other census tracts and how these tract characteristics have changed over time. Then, using multivariate logit analysis and data from the 1990 Census and 2000 Census, we attempt to isolate which characteristics separate food desert tracts from other low-income census tracts, to help distinguish areas that are vulnerable to low access problems in the future. Descriptive results indicate that relative to all other census tracts, food desert tracts tend to have smaller populations, higher rates of abandoned or vacant homes and residents with lower levels of education, lower incomes, and lower labor force participation. Multivariate analysis indicates that census tracts with higher poverty rates are more likely to be food deserts than otherwise similar low-income census tracts in rural and in very dense urban areas. For less dense urban areas, census tracts with higher concentrations of minority populations are more likely to be food deserts, while tracts with substantial decreases in minority populations between 1990 and 2000 were less likely to be food deserts in 2000.
    Keywords: Food Consumption/Nutrition/Food Safety,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:aaeafe:123201&r=agr
  51. By: Steiner, Bodo E.; Lan, Kevin; Unterschultz, James R.; Boxall, Peter C.; Laate, Emmanuel; Yang, Danyi
    Abstract: A survey among cow-calf producers was conducted during 2006 in Western Canada, to assess producers’ preferences towards participation in beef alliances. Producers’ choices were analyzed by varying the degree of vertical coordination in hypothetical lliance participation, while controlling for producer and farm-specific characteristics to explore risk, transaction cost and incentive considerations in participation decisions. Estimates from the attribute-based choice experiments suggest that information sharing regarding animal performance, revenue-risk and residual claimancy are important factors for producers driving alliance choices. Overall, cowcalf producers are willing to move toward higher levels of vertical coordination based on individual animal performance. However, the estimates also suggest that producers consider the benefits from being able to access animal-specific yield and grade data to be smaller than the costs of bearing potentially greater revenue risk as a result of moving towards grid-based pricing, and the transaction costs associated with relationship-building in alliances.
    Keywords: beef value chain, vertical coordination, Canada, Risk and Uncertainty, Q12, Q13, C83, D22.,
    Date: 2012–02–24
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122441&r=agr
  52. By: Gardebroek, Cornelis; Hernandez, Manuel A.
    Abstract: This paper examines volatility transmission in oil, ethanol and corn prices in the United States between 1997 and 2011. We follow a multivariate GARCH approach to evaluate the level of interdependence and the dynamics of volatility across these markets. Preliminary results indicate a higher interaction between ethanol and corn markets in recent years, particularly after 2006. We only observe, however, significant volatility spillovers from corn to ethanol prices but not the converse. We also do not find major cross-volatility effects from oil to corn markets. The results do not provide evidence of volatility in energy markets stimulating price volatility in grain markets.
    Keywords: Risk and Uncertainty,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122476&r=agr
  53. By: Zuniga Gonzalez, Carlos Alberto
    Abstract: Selected Paper prepared for presentation at the International Association of Agricultural Economists (IAAE) Triennial Conference, Foz do Iguaçu, Brazil, 18-24 August, 2012
    Keywords: Bio Economy Total Factor Productivity Growth, Malmquist Index, Data Envelopment Analysis, Bio-Economy, Bio-Ethanol, Productivity Analysis, D: 24, O: 13, O: 47, P: 51, Q: 10,
    Date: 2012–04–24
    URL: http://d.repec.org/n?u=RePEc:ags:iaae12:122939&r=agr
  54. By: Guenther-Luebbers, Welf; Henke, Soren; Theuvsen, Ludwig
    Abstract: Food prices have steadily risen since the 1990s, and price were especially volatile in the years 2008 and 2010. This trend has also been reflected in the European grain market, which presents all European companies along the food value chain with new challenges. This paper focuses on the impacts of increased price volatility on the grain market. Furthermore, it describes and evaluates government interventions attempting to reduce this volatility. At the same time, it describes and assesses private management methods of dealing with price volatility. In this article, we provide an opportunity to understand how the European cereals market evolved to reach its present state and suggest future possible price assurance systems, such as insurance for the basic monetary security of cereal products for all of the parties involved.
    Keywords: Management, Volatility, Grain Market, Risk and Uncertainty, Q 10, Q12, Q14, Q 17, Q 18,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122548&r=agr
  55. By: Drescher, Larissa S.; Stephan, Marette; Roosen, Jutta
    Abstract: Recently, the stakeholders in the financial industry picked up the idea used in the food sector to label products with traffic-lights. Traffic-lights are not undisputable in either sector. The goal of this paper is to analyze consumer thoughts about this labeling type. Moreover, using the results of a split sample choice experiment the impact of traffic-light labeling on food and financial product purchases is evaluated. It shows that while consumers believe that traffic-lights are helpful in evaluating the risks and benefits associated with (food and financial) products, support for traffic-lights is higher in the food sample. On financial products, consumers’ associate simplicity with traffic-lights, but doubt that they increase the credibility of products. Results of a mixed-logit estimation indicate that traffic-lights affect consumers’ purchases of both product groups. The low-fat attribute has no significant impact on food choices without traffic-lights, but has a positive impact on choices once signalled with a traffic-light label. Consumer evaluate products carrying an organic product label positively, but if the product is additionally labeled with a traffic-light, evaluation becomes negative hinting towards a substitution effect between the organic and the TL label. Considering financial products, traffic-lights lead to a halo-effect for the variance of returns. When no traffic-lights are on the product, consumer chose a product with a high variance of returns less often but more often if the product is labelled with a traffic-light.
    Keywords: Food Consumption/Nutrition/Food Safety,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:aaeafe:123200&r=agr
  56. By: Weber, Sascha A.; Salamon, Petra; Hansen, Heiko
    Abstract: Since the stepwise reduction of intervention prices combined with watered down conditions and suspended export refunds, respectively, the EU dairy industry faces new challenges regarding wild price fluctuations originally caused in third countries. In the past, the EU domestic market was insulated as far as possible from world markets. However, today global prices could affect prices even at the level of consumers, but more directly at the level milk producers. Volatility noticeable increased with the price peak in 2007, followed by the drop in 2008, and a new price boost in 2010. Additionally, reduced security in marketing of butter and skimmed milk powder led to higher processing share of cheese which is not only exported but also increasingly consumed within the EU. Analyzing time series data of dairy products’ prices illustrates price fluctuations at different levels of the supply chain. Particularly, retail prices are less volatile than milk producer prices. Therefore, it is often assumed that retailers do not completely pass on downward movements of producer prices to consumers or, vice versa, and assumption encouraging debates on market power, margins and price transmission in the supply chain. German retailing is characterized by a high of market concentration and by a predominance of discounters, displaying a leading position in price negotiations with dairies or wholesalers. Thus, it can be argued that retailers adversely affect dairies who, in turn, affect milk producers. From this follows price transmission asymmetries differ across different levels of the supply chain, and volatile world market prices induced may affect the lower part of the supply chain negatively. However, price transmission has been analyzed in various studies before, mostly analyzing price transmissions between retailing and consumer level. Thus, they abstract from effects of intermediate levels (wholesale, world market). Therefore, the objective of this paper is to investigate the transmission of milk prices from the farm to the retail level and to detect possible asymmetries, leading in the case of world market price fluctuations to additional problems in the German supply chain. The focus is on the German cheese market whereby regime specific effects are tested e.g., the reduction of EU market support which has major impacts on price transmission. Additionally, the change in the product mix and the increased export orientation of German dairies also affect price transmission. In the analysis monthly data from January 1990 to October 2011 for producer prices of raw milk, wholesale and consumer prices for cheese as well as prices in international trade with cheese are considered. Institutional prices were generated on a monthly basis, thus, capturing dates of change in intervention prices and of export refunds. Applying a subset of model specifications based on error-correction representation asymmetries are studied, whereby the seasonal pattern of data is filtered out.
    Keywords: Price transmission, Cointegration, Granger-causality, Dairy, Risk and Uncertainty, C1, E3, E6, F3, Q1,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122542&r=agr
  57. By: Dinar, Ariel
    Abstract: Water is increasingly becoming a limiting factor for sustainable economic growth and development in many countries. Its allocation has significant impacts on overall economic efficiency, particularly with growing physical scarcity in certain regions. Greater water supply variability further increases vulnerability in affected regions. Water also has become a strategic resource involving conflicts among those who may be affected differently by various policies. This paper analyzes various policy interventions aimed at improving water allocation decisions, using a novel approach that incorporates macro and micro level considerations in a unified analytical framework. The framework facilitates assessment of various linkages among policies and their impacts within individual sectors and economy-wide. Drawing on country based studies in Morocco, South Africa, Turkey, and Mexico, the analysis reveals difficult tradeoffs among various policy objectives, including priorities placed on different sectors, regional advantages, and general economic efficiency gains versus broader social impacts. The comparison of policy impacts demonstrates the usefulness of the framework in information that policy makers can use to rank the policy interventions according to the emphasis placed on different policy objectives. The paper also compares approaches used in other studies that apply computable general equilibrium models in various contexts of water, environment and agriculture.
    Keywords: Water Supply and Sanitation Governance and Institutions,Town Water Supply and Sanitation,Water Supply and Systems,Water and Industry,Water Conservation
    Date: 2012–05–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6068&r=agr
  58. By: Capacci, Sara; Mazzocchi, Mario; Shankar, Bhavani
    Abstract: We estimate the effects of the 2005 ban on vending machines in French schools using the 1998 and 2006 INCA nutrition surveys. These surveys contain no information on the presence of vending machines in schools attended by respondents, but the adoption of a Difference-in-Difference design, and a Regression Discontinuity Design enable us to obtain indirect estimates of the policy impact. Results are consistent and suggest that the measure has had a small but significant impact on teenager nutrition, especially in terms of reduced fat intakes.
    Keywords: Food Consumption/Nutrition/Food Safety, I18,
    Date: 2012–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaeafe:123198&r=agr
  59. By: Kemeny, Gabor; Fogarasi, Jozsef; Varga, Tibor; Toth, Orsolya; Toth, Kristof
    Abstract: Increasing price volatility of agricultural commodities over the last decade has focused a growing body of literature to identify the influencing factors of price variability. We analyze the effect of increasing wheat export from the Former Soviet Union (FSU) countries to the international wheat market and price volatility. The major wheat producer and exporter FSU countries, Russia, Ukraine and Kazakhstan have experienced increasing share on the international wheat market. An ordinary least square method is applied to estimate the influence of wheat export from Russia, Ukraine and Kazakhstan on the international wheat price volatility. We found evidence of positive relationship between international wheat price and the expanding net wheat export from FSU.
    Keywords: wheat price volatility, wheat export, FSU countries, Risk and Uncertainty, Q17, O13,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122550&r=agr
  60. By: Ridier, Aude; Chaib, Karim; Roussy, Caroline
    Abstract: In the paper we investigate the role played by both production and market risks on farmer’s decision to adopt long rotations (over 2 years), considered as innovative cropping systems. We build a multiperiod dynamic farm model (run under GAMS) that arbitrates each year between traditional and innovative rotations. With discrete stochastic programming, the production risk is accounted as an intra-year risk; yearly farming operations are declined according to a decision tree where probabilities are assigned. Subjective yield and cost distributions linked to this decision tree are elicited among a sample of 13 farmers that are experiencing this innovation in South-western France. The price risk is randomly distributed with a given market trend. The crop acreage can be revised according to the market situation. The simulations show that substantive sunk costs are incentive to remain in the long rotation when the farmer is already engaged and when he is supported for this engagement. They also show that both a high risk aversion and a highly positive market trend tend to slow down the conversion towards innovative systems.
    Keywords: innovative cropping systems, dynamic model, crop rotation decision, risk, subjective probabilities, Risk and Uncertainty, C61, D0, Q12, Q55,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122440&r=agr
  61. By: Banerjee, Chirantan; Berg, Ernst
    Abstract: International development organisations, through partnerships with local insurance companies, have been promoting weather index based insurance (WIBI) in developing countries. Due to lower operational costs, they expect shorter pay-off period, often overlooking high initial design costs. Experiences however show high post-pilot mortality of these programmes. Literatures report lack of insurance participation. We propose lack of push from insurance providers as an additional factor. To verify, cash flows of a Nicaraguan groundnut based WIBI and a comparable but hypothetical named peril insurance are simulated against 80 scenarios. Additionally, a test of stochastic dominance of their estimated Net Present Values show that WIBI take comparatively longer to pay-off yielding lower returns with considerable risk. WIBI, given its advantages is undoubtedly an efficient agricultural risk management tool. Therefore, to make it sustainable, long-term pilots and technical assistance is required until the product pays-off and yield profits for insurance providers.
    Keywords: Index based rainfall insurance, weather derivative, operational cost, Nicaragua, International Development, Risk and Uncertainty,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122448&r=agr
  62. By: Matteo Manera (Department of Statistics, University of Milan-Bicocca and Fondazione Eni Enrico Mattei, Milan); Marcella Nicolini (Department of Economics and Business, University of 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
    URL: http://d.repec.org/n?u=RePEc:pav:wpaper:170&r=agr
  63. By: Tubetov, Dulat; Maart, Syster Christin; Musshoff, Oliver
    Abstract: Kazakhstan and Germany have different development levels of the agricultural sector. One of the explanations for this fact might be the different investment behavior of farmers in the two countries. In this study, we experimentally compare the investment behavior of farmers in the two countries in a farmland investment treatment and a coin tossing game investment treatment. In addition, farmers were confronted with the two treatments in a different order. Results demonstrate that German farmers are more reluctant to make investment than Kazakhstani farmers. Moreover, results are independent from the framing of a farmland investment and a coin tossing game investment treatment. Furthermore, the investment behaviors of farmers were contrasted with normative benchmark of the classical investment theory and the real options theory. Our results show that both theories cannot exactly explain the investment behavior of farmers. However, farmers learn from former investment behavior and consider the value of waiting over time.
    Keywords: Risk and Uncertainty,
    Date: 2012–02–24
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122454&r=agr
  64. By: Gohin, Alexandre; Rault, Arnaud
    Abstract: Epizootic outbreaks such as Foot and Mouth Disease are of great concern for agriculture. In this paper, we quantify the potential dynamic impacts of such a disease on Brittany, a French region with a strong livestock sector. We develop a dynamic computable general equilibrium model with rational expectations that allows us to measure the impacts of culling infected animals and restraining movements of live animals on the livestock sectors and downstream food industries. Our results show that economic losses are spread over many periods even with a one-time shock. The impacts on the primary sectors and downstream food sectors do not move in parallel. The food industries suffer most in the first period while the negative impacts on agriculture are mostly observed thereafter. Credit and wage constraints result in an estimated aggregated loss multiplied by more than 700 per cent. These results challenge the concept of a simple management policy for this disease.
    Keywords: dynamics, CGE, animal disease, catastrophic event, Risk and Uncertainty, Q11, Q18,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122438&r=agr
  65. By: Smed, Sinne; Hansen, Lars Garn
    Abstract: In modern societies it seems that the pleasures of taste often encourage the consumption of fatty, salty and sweet foods, whereas growing health awareness discourages consumption of the same foods. Numerous studies find that education and diet healthiness are highly correlated and one possible explanation is that consumers with a longer education are better at understanding and appreciating the health implication of their diet than are consumers with a short education. In this study we estimate a hedonic model of consumer’s valuation of food characteristics that allows nutrients to influence utility both through their perceived effects on health and their effects on the taste of food. The model is estimated using purchase data from a consumer panel with comprehensive coverage of food purchases for 2500 Danish households. We find that it is differences in taste valuations, rather than differences in valuation of health effects, that explains the observed differences in dietary healthiness across consumers with different educational backgrounds.
    Keywords: Hedonic model, taste, health, food consumption, Food Consumption/Nutrition/Food Safety, D12, I12,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:aaeafe:122730&r=agr
  66. By: Johannes Spinnewijn
    Abstract: Recent empirical work finds that surprisingly little variation in the demand for insurance is explained by heterogeneity in risks. I distinguish between heterogeneity in risk preferences and risk perceptions underlying the unexplained variation. Heterogeneous risk perceptions induce a systematic difference between the revealed and actual value of insurance as a function of the insurance price. Using a sufficient statistics approach that accounts for this alternative source of heterogeneity, I find that the welfare conclusions regarding adversely selected markets are substantially different. The source of heterogeneity is also essential for the evaluation of different interventions intended to correct inefficiencies due to adverse selection like insurance subsidies and mandates, risk-adjusted pricing and information policies.
    Keywords: Heterogeneity, adverse selection, risk perceptions, welfare and policy
    JEL: D60 D82 D83 G28
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:cep:cepdps:dp1142&r=agr
  67. By: Ott, Herve
    Abstract: The present paper attempts to find empirical evidence on volatility in the grain sector (wheat, corn and soybean). The first challenge is to measure volatility. Intra-year volatility, inter-year volatility in level and return, also conditional volatility are defined and then calculated. The second challenge is to determine which factors impact volatility. The results show that depending on how volatility is measured, factors driving volatility are very different regarding their quantitative importance. Low stock to use ratio drives up mostly intra-year volatility but only moderately inter-year volatility and has almost no impact on conditional volatility. In contrast, a well functioning international market (trade flows without restriction) lowers considerable conditional volatility but has almost no effect on intra-year volatility.
    Keywords: volatility, agricultural commodities, Risk and Uncertainty, C26, C32, Q11,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122486&r=agr
  68. By: Pedersen, Michael Friis
    Abstract: Marketing of milk and meat in Denmark is dominated by two large cooperatives, Arla Foods in the dairy sector and Danish Crown in the pork sector. Members in these cooperatives practically have no possibility for price risk management on their main product. Futures markets for dairy and pork are not utilised, and it is suggested that the reason is prohibitively large basis risk. The events following the global financial crisis suggest increased need for price risk management in Danish agriculture. Since futures markets do not seem to be a viable solution, the paper explores an alternative. Reallocation of price risk among members in marketing cooperatives. Endowing members with a forward contracted share of delivery, and allowing for transfer at a market price will lead to reallocation gains if member heterogeneity in cost of risk is great enough and transaction costs are low enough.
    Keywords: futures, hedging, risk management, marketing cooperatives, Agribusiness, Risk and Uncertainty, G13, G32, Q13, D61, D8,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122529&r=agr
  69. By: Bokusheva, Raushan; Conradt, Sarah
    Abstract: The study evaluates the effectiveness of a catastrophic drought-index insurance developed by applying two alternative methods - the standard regression analysis and the copula approach. Most empirical analyses obtain estimates of the dependence of crop yields on weather by employing linear regression. By doing so, they assume that the sensitivity of yields to weather remains constant over the whole distribution of the weather variable and can be captured by the effect of the weather index on the yield conditional mean. In our study we evaluate, whether the prediction of farm yield losses can be done more accurately by conditioning yields on extreme realisations of a weather index. Therefore, we model the dependence structure between yields and weather by employing the copula approach. Our preliminary results suggests that the use of copulas might be a more adequate way to design and rate weather-based insurance against extreme events.
    Keywords: catastrophic insurance, weather-based insurance, copula, Risk and Uncertainty, C18, Q14,
    Date: 2012–04–10
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122443&r=agr
  70. By: Anton, Jesus
    Abstract: Plenary presentation from 123rd EAAE Seminar, 23-24 February, Dublin, Ireland
    Keywords: Risk and Uncertainty,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122774&r=agr
  71. By: Paul C. Cheshire (London School of Economics); Christian A. L. Hilber (London School of Economics & Spatial Economics Research Centre (SERC)); Ioannis Kaplanis (Universitat Rovira i Virgili & Spatial Economics Research Centre (SERC))
    Abstract: We use unique store-specific data for a major UK supermarket chain to estimate the impact of planning, which restricts both the size and location of stores, on store output. Using the quasi-natural experiment of the variation in planning policies between England and other UK countries and a difference-in-difference approach, we isolate the impact of Town Centre First (TCF) policies. We find that space contributes directly to the productivity of stores and planning policies in England directly reduce output both by reducing store sizes and forcing stores onto less productive sites. Our results suggest that since the late 1980s planning policies have imposed a loss of total output of at least 18.3 to 24.9%. This is equivalent to more than a ‘lost decade’ of output growth in a major sector generated directly by government policy.
    Keywords: Land use regulation, regulatory costs, firm productivity, retail
    JEL: D2 L51 L81 R32
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ieb:wpaper:2012/5/doc2012-15&r=agr
  72. By: E. Kwan Choi
    Abstract: Cross-pollination can be caused by birds, insects and wind. Genetically modified (GM) seeds are produced each year in a controlled environment to maintain their purity. However, pollen from the GM crop can be transferred to traditional crops. When the GM crop producers are in long-run equilibrium and buy seeds from a monopolistic seed producer, the resulting market equilibrium is identical to that when a seed monopolist produces the GM crop directly. When involuntary genetic contamination occurs, the monopolist eventually loses its advantage and stops the protection of GM seeds. A terminator gene can stop genetic contamination but imposes spillover costs on the traditional producers and reduces their outputs.
    Keywords: Transboundary, Genetic Contamination, Terminator Genes
    Date: 2011–09
    URL: http://d.repec.org/n?u=RePEc:deg:conpap:c016_002&r=agr
  73. By: Huffman, Wallace E.
    Abstract: This paper provides a description of important steps in the mechanization of U.S. fruit and vegetable harvesting, which can be hard, backbreaking work, and in addition, the risk of falling is significant for hand-harvesting fruit trees from ladders. Switching to mechanical harvesting frequently requires the transformation of a farming operation, e.g., new crop varieties, new field configurations, and new packing processes. In addition, a significant capital outlay is frequently required. Progress in mechanization varies a great deal across fruit and vegetable crops.
    Keywords: fruits; vegetables; United States; Mechanization; mechanical harvesters
    Date: 2012–05–05
    URL: http://d.repec.org/n?u=RePEc:isu:genres:35132&r=agr
  74. By: Asirvatham, Jebaraj; Nayga, Rodolfo M., Jr.; Thomsen, Michael R.
    Abstract: We examine the role of peer effects in childhood obesity outcomes by investigating whether obesity rates among the highest graders in a public school has an effect on obesity rates among younger grades. We use a panel dataset with obesity prevalence measured at the grade level. Our data are from Arkansas public schools. Results provide evidence that changes in the obesity prevalence at the highest grade are associated with changes in obesity prevalence at younger grades. The magnitude of the peer effect depends on the type of school, and we find statistically significant peer effects in both elementary and high schools but not in middle schools. These effects are also larger in high schools than in elementary schools. We use falsification tests to provide evidence that these peer effects are more than just a statistical correlation or an association.
    Keywords: peer-effects, obesity, childhood obesity, overweight, Food Consumption/Nutrition/Food Safety, D10, D71, I10, Z13,
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:ags:aaeafe:122732&r=agr
  75. By: Hallegatte, Stephane
    Abstract: In Europe, it can be estimated that hydro-meteorological information and early warning systems save several hundreds of lives per year, avoid between 460 million and 2.7 billion Euros of disaster asset losses per year, and produce between 3.4 and 34 billion of additional benefits per year through the optimization of economic production in weather-sensitive sectors (agriculture, energy, etc.). The potential for similar benefits in the developing world is not only proportional to population, but also to increased hazard risk due to climate and geography, as well as increased exposure to weather due to the state of infrastructure. This analysis estimates that the potential benefits from upgrading to developed-country standards the hydro-meteorological information production and early warning capacity in all developing countries include: (i) between 300 million and 2 billion USD per year of avoided asset losses due to natural disasters; (ii) an average of 23,000 saved lives per year, which is valued between 700 million and 3.5 billion USD per year using the Copenhagen Consensus guidelines; and (iii) between 3 and 30 billion USD per year of additional economic benefits. The total benefits would reach between 4 and 36 billion USD per year. Because some of the most expensive components of early warning systems have already been built (e.g., earth observation satellites, global weather forecasts), these investments are relatively modest, estimated here around 1 billion US per year, reaching benefit-cost ratios between 4 and 36.
    Keywords: Hazard Risk Management,Natural Disasters,Transport Economics Policy&Planning,Climate Change Economics,Climate Change Mitigation and Green House Gases
    Date: 2012–05–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6058&r=agr
  76. By: Conradt, Sarah; Bokusheva, Raushan; Finger, Robert; Kussaiynov, Talgat
    Abstract: The application of yield time series in risk analysis prerequisites the estimation of technological trend which might be present in the data. In this paper, we show that in presence of highly volatile yield time series and non-constant technology, the consideration of the weather effect in the trend equation can seriously improve trend estimation results. We used ordinary least squares (OLS) and MM, a robust estimator. Our empirical analysis is based on weather data as well as farm-level and county-level yield data for a sample of grain-producing farms in Kazakhstan.
    Keywords: Yield detrending, weather information, robust trend estimation, aggregation, Risk and Uncertainty, Q19,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122541&r=agr
  77. By: Giorgio Brunello; Maria De Paola; Giovanna Labartino
    Abstract: We use scanner data of supermarket sales to investigate the effects of the EU School Fruit campaign, conducted in a sample of primary schools in the city of Rome during 2010 and 2011, on the consumption of unhealthy snacks. We allocate supermarkets to treatment and control groups depending on whether they are located or not near treated schools and estimate the causal effect of the program by comparing the changes in the sales of snacks in treated stores with the changes in control stores. We find evidence that the campaign reduced the consumption of unhealthy snacks bought in stores located in high income areas. No effect is found in poorer areas. Repeated treatment does not strengthen the effects of the program.
    Date: 2012–04
    URL: http://d.repec.org/n?u=RePEc:dpr:wpaper:0840&r=agr
  78. By: Johanna Choumert (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Pascale Combes Motel (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); K. Herve DAKPO (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: Although widely studied, deforestation remains a topical and typical issue. The relationship between economic development and deforestation is still at stake. This paper presents a meta-analysis of Environmental Kuznets Curve (EKC) studies for deforestation. Using 71 studies, offering 631 estimations, we shed light on why EKC results differ. We investigate the incidence of choices made by authors (econometric strategy, deforestation measure, temporal coverage, geographical area, measure of economic development...) on the probability of finding an EKC. After a phase of work corroborating the EKC, we find a turning point after the year 2001. Building on our results, we conclude that the EKC story will not fade until theoretical alternatives will be provided.
    Keywords: Meta-Analysis; Environmental Kuznets Curve; Deforestation;development
    Date: 2012–04–27
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00691863&r=agr
  79. By: Ritter, Matthias; Musshoff, Oliver; Odening, Martin
    Abstract: Weather risk is one of the main causes for income fluctuation in agriculture. Since 1997, the economic consequences of weather risk can be insured with weather derivatives, which are offered for many different weather events, such as temperature, rainfall, snow or hurricanes. It is well known that the hedging effectiveness of weather derivatives is interfered by the existence of geographical basis risk, i.e., the deviation of weather conditions at different locations. In this paper, we explore how geographical basis risk of rainfall based derivatives can be reduced by regional diversification. Minimizing geographical basis risk requires knowledge of the joint distribution of rainfall at different locations. For that purpose, we estimate a daily multi-site rainfall model from which optimal portfolio weights are derived. We find that this method allows to reduce geographical basis risk more efficiently than simpler approaches as, for example, inverse distance weighting.
    Keywords: management, weather risk, regional diversification, portfolio weights, Risk and Uncertainty, G11, Q14, G32,
    Date: 2012–02–23
    URL: http://d.repec.org/n?u=RePEc:ags:eaa123:122527&r=agr

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