nep-agr New Economics Papers
on Agricultural Economics
Issue of 2012‒07‒14
sixteen papers chosen by
Angelo Zago
University of Verona

  1. Policy Responses to Changing Perceptions of the Role of Agriculture in Development By Kym Anderson
  2. Adaptation to Climate Change by Smallholder Farmers in Tanzania By Coretha Komba; Edwin Muchapondwa
  3. Unfavorable Land Endowment, Cooperation, and Reversal of Fortune By Anastasia Litina
  4. Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso By Félix Badolo; Fousseini Traore
  5. Agriculture and Food Security in Asia by 2030 By Anderson, Kym; Strutt, Anna
  6. Impact of tissue culture banana technology in Kenya: A difference-in-difference estimation approach By Enoch M. Kikulwe; Nassul .S. Kabunga; Matin Qaim
  7. Contract linkages and resource use in grain production : the argentina pradera pampeana. By Marcos Gallacher
  8. Modelling Land Use, Land-Use Change, and Forestry in Climate Change: A Review of Major Approaches By Melania Michetti
  9. Exploring cost dominance between high and low pesticide use in French crop farming systems by varying scale and output mix By Jean-Philippe Boussemart; Hervé Leleu; Oluwaseun Ojo
  10. The strategic use of private quality standards in food supply chains By von Schlippenbach, Vanessa; Teichmann, Isabel
  11. Futures basis, inventory and commodity price volatility: An empirical analysis By Symeonidis, Lazaros; Prokopczuk, Marcel; Brooks, Chris; Lazar, Emese
  12. Costing Global Trade Barriers, 1900 to 2050 By Kym Anderson
  13. Estimating Effects of Price-distorting Policies Using Alternative Distortions Databases By Kym Anderson; Will Martin; Dominique van der Mensbrugghe
  14. The Global Economics of Water: Is Water A Source of Comparative Advantage? By Debaere, Peter
  15. Is Chad affected by Dutch or Nigerian disease? By Kablan, Sandrine; Loening, Josef
  16. Informing Climate Adaptation: A Review of the Economic Costs of Natural Disasters, Their Determinants, and Risk Reduction Options By Kousky, Carolyn

  1. By: Kym Anderson
    Abstract: Traditionally, development economists had a dim view of the contribution that farmers made to modern economic growth, compared with manufacturers. Hence agricultural exports and manufacturing imports were often taxed. This view changed over time though, as first economists and then policy makers came to understand the high cost of an anti-agricultural, import-substituting industrialization strategy. This paper outlines how this change came about and the resulting economic policy reforms that occurred in developing countries from the 1980s. It then considers the kinds of distortions that remain within agricultural markets, their cost to the global economy, and alternatives to these price-distorting measures.
    Keywords: agricultural development economics, import-substituting industrialization, farm and food price distortions
    Date: 2012
  2. By: Coretha Komba; Edwin Muchapondwa
    Abstract: In Sub-Saharan Africa, climate change is set to hit the agricultural sector the most and cause untold suffering particularly for smallholder farmers. To cushion themselves against the potential welfare losses, smallholder farmers need to recognize the changes already taking place in their climate and undertake appropriate investments towards adaptation. This study investigates whether smallholder farmers in Tanzania recognize climate change and consequently adapt to it in their agricultural activities. The study also investigates the factors influencing their choice of adaptation methods to climate change To do this, the study collected and analyzed data from 556 randomly selected households in a sample of districts representing the six agro-ecological regions of the country. The data shows that Tanzanian smallholder farmers have observed changes in mean and variance precipitation and temperature and responded to it The farmers have generally used shortseason crops, drought-resistant crops, irrigation, planting dates and tree planting to adapt to the potential negative impacts of climate change on their agricultural yields. A binary logit model is used to investigate the factors influencing a famer's decision to undertake any adaptation at all to climate change while a multinomial logit model is used to investigate the factors influencing farmers' choice of specific adaptation methods. The Tanzanian government needs to help smallholder farmers overcome constraints they face in taking up adaptation to climate change. Furthermore, the government can play a significant role by promoting adaptation methods appropriate for particular circumstances e.g. particular crops or agro-ecological zones
    Keywords: Adaptation methods, smallholder farmers, agro-ecological zones, climate change, Tanzania.
    JEL: Q10 Q12 Q51 Q54 Q57
    Date: 2012
  3. By: Anastasia Litina (University of Luxembourg CREA)
    Abstract: This research advances the hypothesis that reversal of fortunes in the process of economic develop- ment can be traced to the effect of natural land productivity on the desirable level of cooperation in the agricultural sector. In early stages of development, unfavorable land endowment enhanced the economic incentive for cooperation in the creation of agricultural infrastructure that could mitigate the adverse effect of the natural environment. Nevertheless, despite the beneficial effects of cooperation on the intensive margin of agriculture, low land productivity countries lagged behind during the agricultural stage of development. However, as cooperation, and its persistent effect on social capital, have become increasingly important in the process of industrialization, the transition from agriculture to industry among unfavorable land endowment economies was expedited, permitting those economies that lagged behind in the agricultural stage of development, to overtake the high land productivity economies in the industrial stage of development. Exploiting exogenous sources of variations in land productivity across countries the research further explores the testable predictions of the theory. It establishes that: (i) reversal of fortunes in the process of development can be traced to variation in natural land productivity across countries. Economies characterized by favorable land endowment dominated the world economy in the agricultural stage of development but were overtaken in the process of industrialization; (ii) lower level of land productivity in the past is associated with higher levels of contemporary social capital; (iii) cooperation, as reflected by agricultural infrastructure, emerged primarily in places were land was not highly productive and collective action could have diminished the adverse effects of the environment and enhance agricultural output.
    Keywords: Land productivity, Cooperation, Social Capital, Economic development, Agriculture, Industrialization
    JEL: O11 O13 O14 O31 O33 O41 O50
    Date: 2012
  4. By: Félix Badolo (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Fousseini Traore (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: Between January 2006 and April 2008, the prices of most of the agricultural products considerably rose in international markets. Empirical studies show that this spike in world food prices has increased the number of poor households in developing countries, but the magnitude is not the same in all countries. This paper assesses the impact of rising rice price on poverty and income inequality in Burkina Faso. We use a methodology based on the concept of compensating variation combined with the net benefit ratio (NBR) developed by Deaton (1989) and living standard survey (QUIBB, 2003). The results show that higher rice prices have a negative impact on income and poverty in the regions with a large proportion of households who are net buyers of rice. The poverty rate increases by 2.2 to 2.9 percentage points depending on the assumptions. The increase in poverty increase is higher in urban areas than in rural areas. Rising rice prices also increase income inequality. Income inequality particularly increases in urban areas and in relatively rich regions, but it decreases in poor regions with an important proportion of rice producers.
    Keywords: Measuring and analysis of poverty;farm household;Price
    Date: 2012–06–29
  5. By: Anderson, Kym (Asian Development Bank Institute); Strutt, Anna (Asian Development Bank Institute)
    Abstract: Rapid trade-led economic growth in emerging Asia has been shifting the global economic and industrial centres of gravity away from the north Atlantic, raising the importance of Asia in world trade but also altering the commodity composition of trade by Asia and other regions. What began with Japan in the 1950s and the Republic of Korea and Taipei,China from the late 1960s has spread to the much more populous ASEAN region, the People’s Republic of China, and India. This paper examines how that growth and associated structural changes are altering agricultural markets in particular and thereby food security.
    Keywords: asia; asean; agricultural markets; agriculture; food security; world trade
    JEL: D58 F13 F15 F17 Q17
    Date: 2012–07–09
  6. By: Enoch M. Kikulwe (Georg-August-University Göttingen); Nassul .S. Kabunga (International Food Policy Research Institute, Kampala, Uganda); Matin Qaim (Georg-August-University Göttingen)
    Abstract: Most micro-level studies on the impact of agricultural technologies build on cross-section data, which can lead to unreliable impact estimates. Here, we use panel data covering two time periods to estimate the impact of tissue culture (TC) banana technology in the Kenyan small farm sector. TC banana is an interesting case, because previous impact studies showed mixed results. We combine propensity score matching with a difference-in-difference estimator to control for selection bias and account for temporal impact variability. TC adoption has positive impacts on banana productivity and profits. The technology increases yields by 40-50% and gross margins by around 100%. These large effects represent the impact of TC technology in combination with improved management practices and higher input use, which is recommended. Looking at the isolated TC effect may underestimate impact because of synergistic relationships. The results suggest that extension efforts to deliver the technological package to smallholder farmers should be scaled up.
    Keywords: Agricultural technology; Difference-in-difference; Selection bias; Temporal impact variability; Impact; Kenya
    Date: 2012–07–06
  7. By: Marcos Gallacher
    Abstract: This paper analyzes contractual arrangements in barley production in the Argentine pradera pampeana region. Barley constitutes an interesting case-study: its production and marketing conditions result in some degree of vertical contracting between primary producers and processors. Vertical coordination via contracting, however, is considerably less than that observed for example in poultry or some types of vegetable and fruit production. Barley is thus an intermediate case between coordination via impersonal market transactions and that resulting from different degrees of vertical integration. The objective of the paper is to determine the impacts of contracting on decisions such as input purchasing agreements, output marketing sharing, vertical integration, risk management and the use of technical know-how. The impact of contracting arrangements on input use and technology choice is also explored. Findings include the following. First, input purchase sharing, or output marketing sharing arrangements are infrequent amongst farmers. Some evidence exists, however, of barley farmers engaging in these arrangements more than farmers producing alternative crops. The (partial) “asset-specific” nature of the barley crop may explain these differences. Second, a higher proportion of barley farmers engage in different types of vertical arrangements with input suppliers or output purchasers. Third, farmers participating in the barley vertical chain are more likely to use formal insurance instruments than farmers producing other crops. Fourth, significant differences exist in input (fertilizer and ag chemical), and technical-know how between farmers that participate and those that do not participate in vertical arrangements with input suppliers and output purchasers. Formal contracting appears, in general, to have a positive impact on all these dimensions. The paper shows that contracts between barley producers and processors are relatively simple, relying for compliance on reputation and good-will more than on the formal “written word”. Possibly, relatively low benefits from non-compliance result in this type of arrangement working well. The paper also shows, however, that private arbitration, mediation and quality inspection institutions exist in order to reduce both the probability and costs of litigation. The Camara Arbitral (in existence since 1905) is an interesting example of this type of institution.
    Date: 2012–05
  8. By: Melania Michetti (Fondazione Eni Enrico Mattei (FEEM), Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC))
    Abstract: The rapid development of climate policies and the need to understand the dynamics of climate change have highlighted and shaped the role of land use, land-use change and forestry dynamics (LULUCF), making it an issue of global importance. As a consequence, LULUCF has become a central topic in economic theory and in environmental sciences. The attention is focused on creating and expanding comprehensive global land-use datasets and on improving the modelling strategies allowing for an extensive representation of the land-use system. However, this is a relatively new research field and the development of this challenging process is likely to require greater effort in the years to come. By adopting a straightforward model classification, this paper provides a broad, but detailed, overview of the most representative methods and models developed to date. This summary will guide a critical discussion on relevant methodological aspects related to the global modelling of land use and its changes. An additional focus is placed on the representation of forest-carbon sequestration within climate mitigation, which represents one of the most demanding issues from a modelling perspective.
    Keywords: Land, Land-Use Change Modelling, Agriculture, Forestry
    JEL: Q23 Q24 Q51 Q54
    Date: 2012–06
  9. By: Jean-Philippe Boussemart (IESEG School of Management); Hervé Leleu (CNRS-LEM (UMR 8179) and IESEG School of Management); Oluwaseun Ojo (CNRS-LEM (UMR 8179) and IESEG School of Management)
    Keywords: Pesticide Use (PU), Cash crops farming systems, Activity Analysis Model (AAM), Non Parametric Robust Cost Function (NPRCF), Hamming Distance (HD)
    JEL: C61 D22 D24 Q12
    Date: 2012–06
  10. By: von Schlippenbach, Vanessa; Teichmann, Isabel
    Abstract: We explore the strategic role of private quality standards in food supply chains. Considering two symmetric retailers that are exclusively supplied by a finite number of producers and endogenizing the suppliers' delivery choice, we show that there exist two asymmetric equilibria in the retailers' quality requirements. Our results reveal that the retailers use private quality standards to improve their bargaining position in the intermediate goods market. This is associated with inefficiencies in the upstream production, which can be mitigated by enforcing a minimum quality standard. --
    Keywords: private quality standards,vertical relations,buyer power,food supply chain
    JEL: L15 L42 Q13
    Date: 2012
  11. By: Symeonidis, Lazaros; Prokopczuk, Marcel; Brooks, Chris; Lazar, Emese
    Abstract: We employ a large dataset of physical inventory data on 21 different commodities for the period 1993-2011 to empirically analyze the behaviour of commodity prices and their volatility as predicted by the theory of storage. We examine two main issues. First, we explore the relationship between inventory and the shape of the forward curve. Low (high) inventory is associated with forward curves in backwardation (contango), as the theory of storage predicts. Second, we show that price volatility is a decreasing function of inventory for the majority of commodities in our sample. This effect is more pronounced in backwardated markets. Our findings are robust with respect to alternative inventory measures and over the recent commodity price boom period.
    Keywords: Forward curves; inventory; commodity price volatility; theory of storage; convenience yield
    JEL: C59 C22 G00 G13
    Date: 2012–07–04
  12. By: Kym Anderson
    Abstract: By how much did the cost of governmental barriers to trade change over the 20th century, and how might they change by the middle of the 21st century? This paper addresses that question by first reviewing evidence on the changing extent of global trade restrictions since 1900, particularly for agricultural and manufactured goods. It then assesses prospects for trade policy changes over the coming four decades by drawing on current political economy theory and evidence. The paper then provides crude estimates of the annual cost, in terms of economic welfare foregone in high-income and developing countries, of those trade-restricting policies.
    Keywords: welfare effects of trade restrictions, protectionist history, policy reform
    JEL: F13 F15 F17
    Date: 2012
  13. By: Kym Anderson; Will Martin; Dominique van der Mensbrugghe
    Abstract: This paper addresses three questions relating to the very extensive use of the GTAP global trade protection database: Are there additional price-distorting policy instruments worthy of inclusion in the base year? What is the appropriate counterfactual set of price distortions in the year of concern (such as when a proposed reform is expected to be fully implemented, as distinct from the base year)? And how are the price distortions (e.g. tariff rates) on individual products aggregated to the GTAP product groups? We show the estimated welfare effects of policies can change substantially when more-appropriate measures of distortions are used.
    Keywords: trade policy counterfactuals, tariff aggregation, agricultural protection growth
    JEL: F13 F15 F17 Q17
    Date: 2012
  14. By: Debaere, Peter
    Abstract: Freshwater scarcity is bound to be a major challenge of the 21st century. Drawing on newly available data, I investigate to what extent countries make efficient use of the very uneven water resources on a global scale. In particular, I find that countries that are relatively water abundant tend to export more water-intensive products. This evidence supports the hypothesis that water is a source of comparative advantage. My findings also indicate that water contributes significantly less to the pattern of exports than the traditional production factors such as labor and physical capital. In light of climate change, this suggests relatively moderate disruptions to trade on a global scale due to changing precipitation patterns. My results do not provide consistent evidence that there is a difference in the extent to which water determines the pattern of trade between water-scarce and water-abundant countries.
    Keywords: Comparative Advantage; International Trade; Water
    JEL: F1
    Date: 2012–07
  15. By: Kablan, Sandrine; Loening, Josef
    Abstract: We examine the effects of the ‘natural resource curse’ on Chad and find little evidence for Dutch disease. Structural vector auto-regression suggests that changes in domestic output and prices are overwhelmingly determined by aggregate demand and supply shocks, and while oil production and high international prices negatively affect agricultural output, the effects are small. Consistent with empirical evidence for neighbouring Cameroon, we observe minimal impact on Chad’s manufacturing sector. We associate our findings with structural underemployment and the inefficient use of existing production factors. In this context, increased public expenditures in tradable sectors present the opportunity to make oil revenues an engine of national development.
    Keywords: Natural resource curse; Dutch disease; Chad; Structural VAR
    JEL: O11 E32 E30 O13 E61
    Date: 2012–06–30
  16. By: Kousky, Carolyn (Resources for the Future)
    Abstract: This paper reviews the empirical literature on the economic impacts of natural disasters to inform both climate adaptation policy and the estimation of potential climate damages. It covers papers that estimate the short- and long-run economic impacts of weather-related extreme events as well as studies regarding the determinants of the magnitude of those damages (including fatalities). The paper also includes a discussion of risk reduction options and the use of such measures as an adaptation strategy for predicted changes in extreme events with climate change.
    Keywords: natural disaster damages, climate adaptation, risk mitigation
    JEL: Q54 D1 E2 O1
    Date: 2012–07–05

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