nep-agr New Economics Papers
on Agricultural Economics
Issue of 2012‒09‒16
thirteen papers chosen by
Angelo Zago
University of Verona

  1. Drivers of agricultural capital productivity in selected EU member states By Petrick, Martin; Kloss, Mathias
  2. How does Market Access affect Smallholder Behavior? The Case of Tobacco Marketing in Malawi By Wouter Zant
  3. Spatial and Temporal Responses to an Emissions Trading System Covering Agriculture and Forestry: Simulation Results from New Zealand By Suzi Kerr; Simon Anastasiadis; Alex Olssen; William Power; Levente Tímár; Wei Zhang
  4. Simulation of Land Use and Investment Behaviour under Different Policy Scenarios: Results of the extended farm/household model By Puddu,Marco; Bartolini, Fabio; Viaggi,Davide
  5. Should African rural development strategies depend on smallholder farms ? an exploration of the inverse productivity hypothesis By Larson, Donald F.; Otsuka, Keijiro; Matsumoto, Tomoya; Kilic, Talip
  6. Does the Common Agricultural Policy Reduce Farm Labour Migration? Panel data analysis across EU regions By Olper,Alessandro,; Raimondi,Valentina; Cavicchioli,Daniele; Vigani,Mauro
  7. Fuel Choices in Rural Maharashtra By David Ian Stern; Jack Gregory
  8. Income Distributional Effects of Decoupled Payments: Single Payment Scheme in the European Union By Ciaian, Pavel; Kancs, d’Artis; Swinnen, Jo
  9. Migration, congestion externalities, and the evaluation of spatial investments By Taryn Dinkelman; Sam Schulhofer-Wohl
  10. Carbon Incentive for physical activity: Conceptualising clean development mechanism for food energy By Srinivasan, Raghavendra Guru
  11. The Group of Twenty : Input and Output Legitimacy, Reforms, and Agenda By Andrew F. Cooper
  12. Tax exemptions and rural development: Evidence from a quasi-experiment By Luc Behaghel; Adrien Lorenceau; Simon Quantin
  13. Loan regulation and child labor in rural India By Basab Dasgupta; Christian Zimmermann

  1. By: Petrick, Martin; Kloss, Mathias
    Abstract: The aim of this Working Paper is to provide an empirical analysis of the marginal return on working capital and fixed capital in agriculture, based on data gathered by the Farm Accountancy Data Network from seven EU member states. Particular emphasis is placed on the detection of credit market imperfections. The key idea is to provide farm group-specific estimates of the shadow price of capital, and to use these to analyse the drivers of on-farm capital use in European agriculture. Based on Cobb Douglas estimates of farm-type specific production functions, we find that working capital is typically used in more than economically optimal quantities and often displays negative marginal returns across countries and farm types. This is less often the case with regard to fixed capital, but it is only in a small set of sectors where access to fixed capital appears severely constrained. These sectors include field crop and mixed farms in Denmark, dairy farms in East Germany, as well as mixed farms in Italy and the UK. The relationship between farm financial indicators and the estimated shadow prices of capital varies considerably across countries and sectors. Among the farms with a high shadow price for fixed capital in Denmark, high debt levels and little owned land tended to induce more intensive capital use, which may reflect the liberal Danish banking system. In East Germany, Italy and the UK, high debt levels made farmers more tightly capital constrained. Hence, in the latter group of countries, more traditional mechanisms of capital allocation based on debt capacity seemed to be at work. As a general conclusion, EU agriculture appears to be characterised by overcapitalisation rather than by credit constraints.
    Date: 2012–09
  2. By: Wouter Zant (VU University Amsterdam)
    Abstract: Transaction costs play a key role in the behaviour of smallholders in developing countries. We exploit the quasi experimental design of the introduction of an additional tobacco auction floor in Malawi in order to investigate the impact of a reduction in transaction costs and improved market access on yield and underlying smallholder's decisions on production and area of tobacco, the major cash crop in Malawi. Estimations are based on annual data by Extension Planning Area, 198 in total, fully covering Malawi, for 2003-04 to 2009-10. The estimation results support a statistically significant positive impact of the introduction of a new auction floor on tobacco yield and production of smallholders. Yield increases over the years to 21-25% above base year level. Smallholder production increases are of a similar size with a larger variation, ranging from 12% to 30%. The evidence further suggests that smallholder area is not affected. Results are shown to be robust after controlling for rainfall, fertilizer use, tobacco prices, maize prices and after including the lagged dependent variable.
    Keywords: transaction costs; market access; subsistence; food & cash crops; Malawi; Africa
    JEL: D23 O13 O55 Q11 Q13
    Date: 2012–09–03
  3. By: Suzi Kerr (Motu Economic and Public Policy Research); Simon Anastasiadis (Motu Economic and Public Policy Research); Alex Olssen (Motu Economic and Public Policy Research); William Power (GNS Science); Levente Tímár (Motu Economic and Public Policy Research and GNS Science); Wei Zhang (Ministry for Primary Industries)
    Abstract: We perform simulations using the integrated Land Use in Rural New Zealand (LURNZ) model to analyse the effect of various New Zealand emissions trading scheme (ETS) scenarios on land-use, emissions, and output in a temporally and spatially explicit manner. We compare the impact of afforestation to the impact of other land-use change on net greenhouse gas emissions, and evaluate the importance of the forestry component of the ETS relative to the agricultural component. We also examine the effect of land-use change on the time profile of net emissions from the forestry sector. Our projections for the mid-2020s suggest that under a comprehensive ETS, sequestration associated with new planting could be significant; it may approach 20 percent of national inventory agricultural emissions in 2008. Most of this is driven by the reward for forestry rather than a liability for agricultural emissions. Finally, we present projections of future agricultural output under various policy scenarios.
    Keywords: land use; land-use change; LURNZ; greenhouse-gas emissions; afforestation; forestry removals; New Zealand Emissions Trading Scheme; integrated modelling; agricultural production
    JEL: Q15 Q18 Q23 Q54
    Date: 2012–09
  4. By: Puddu,Marco; Bartolini, Fabio; Viaggi,Davide
    Abstract: Factor markets are a central issue in analyses of farm development and of agricultural sector vitality. Among the different production factors, land is one of the most studied. Several studies seek to estimate the effect of government policy payments on land value or land rental prices. The studies mostly agree that government payments and other types of policy support are significant in explaining land prices and account for a large share of them. In October 2011, the European Commission published a new policy proposal for the common agricultural policy (CAP) up to 2020. The proposed regulation includes a shift from historical to regional payments. The objective of this paper is to provide an ex ante analysis of the impact of the new CAP policy instruments on the land market. In particular, the effect of the regionalisation of payments in Italy is examined. The analysis is based on the use of a mathematical programming model to simulate the changes in land demand for a farm in Emilia Romagna. The results highlight the relevance of the new policy mechanism in determining a change in land demand. Yet the effect is highly dependent on initial ownership of entitlements under the historical payment scheme.
    Date: 2012–07
  5. By: Larson, Donald F.; Otsuka, Keijiro; Matsumoto, Tomoya; Kilic, Talip
    Abstract: In Africa, most development strategies include efforts to improve the productivity of staple crops grown on smallholder farms. An underlying premise is that small farms are productive in the African context and that smallholders do not forgo economies of scale -- a premise supported by the often observed phenomenon that staple cereal yields decline as the scale of production increases. This paper explores a research design conundrum that encourages researchers who study the relationship between productivity and scale to use surveys with a narrow geographic reach, when policy would be better served with studies based on wide and heterogeneous settings. Using a model of endogenous technology choice, the authors explore the relationship between maize yields and scale using alternative data. Since rich descriptions of the decision environments that farmers face are needed to identify the applied technologies that generate the data, improvements in the location specificity of the data should reduce the likelihood of identification errors and biased estimates. However, the analysis finds that the inverse productivity hypothesis holds up well across a broad platform of data, despite obvious shortcomings with some components. It also finds surprising consistency in the estimated scale elasticities.
    Keywords: Crops&Crop Management Systems,Climate Change and Agriculture,Rural Development Knowledge&Information Systems,Economic Theory&Research,Labor Policies
    Date: 2012–09–01
  6. By: Olper,Alessandro,; Raimondi,Valentina; Cavicchioli,Daniele; Vigani,Mauro
    Abstract: This paper deals with the determinants of labour out-migration from agriculture across 149 EU regions over the 1990–2008 period. The central aim is to shed light on the role played by payments from the common agricultural policy (CAP) on this important adjustment process. Using static and dynamic panel data estimators, we show that standard neoclassical drivers, like relative income and the relative labour share, represent significant determinants of the intersectoral migration of agricultural labour. Overall, CAP payments contributed significantly to job creation in agriculture, although the magnitude of the economic effect was rather moderate. We also find that pillar I subsidies exerted an effect approximately two times greater than that of pillar II payments.
    Date: 2012–07
  7. By: David Ian Stern; Jack Gregory
    Abstract: Traditional biomass remains a large source of energy in developing countries, particular in rural areas. Use of biomass can contribute to deforestation and hence climate change as well as indoor air pollution. Therefore, significant efforts have been made to improve the efficiency with which it is used and to reduce particulate emissions through the adoption of improved stoves and to transition households to modern energy carriers. We report on and analyze the results of an energy use survey in two tribal villages in rural Maharashtra, India. Though there is significant heterogeneity between the effects of the variables in the two villages there are some robust results. We find modest evidence for the 'energy ladder' hypothesis and that use of higher quality energy sources reduces total energy use ceteris paribus. Income elasticities of fuel demand are small. Additionally, we demonstrate that household size, stove ownership, and season influence rural energy choices. However, the effects of improved stoves are small and not consistent across the villages.
    Keywords: Household energy, income elasticity, improved stoves, India
    JEL: Q41 O13
    Date: 2012–07
  8. By: Ciaian, Pavel; Kancs, d’Artis; Swinnen, Jo
    Abstract: This paper analyses the effects of the Single Payment Scheme (SPS) with and without farm structural change. Particular focus is placed on how income distributional effects and farm restructuring are impacted by the SPS under: alternative entitlement tradability, crosscompliance and CAP ‘greening’ requirements, different SPS implementation models, the entitlement stock, market imperfections and institutional regulations. The authors find that the SPS implication details are highly significant: farmers’ benefits can range from 100% of the SPS value to a negative policy incidence, and farm structural change may be hindered by the SPS.
    Date: 2012–07
  9. By: Taryn Dinkelman; Sam Schulhofer-Wohl
    Abstract: Evaluations of new infrastructure in developing countries typically focus on direct effects, such as the impact of an electrification program on household energy use. But if new infrastructure induces people to move into an area, other local publicly provided goods may become congested, offsetting the benefit of the infrastructure. We use a simple model to show how to measure the net benefit of a place-based program without data on land prices—an indicator that is commonly used to measure congestion in developed countries but that often cannot be used in poor countries because land markets are missing or land prices are badly measured. Our model shows that congestion externalities are especially large when land markets are missing. To illustrate, we estimate the welfare impact of a recent household electrification program in South Africa. Congestion externalities from migration reduced local welfare gains by half.
    Keywords: South Africa
    Date: 2012
  10. By: Srinivasan, Raghavendra Guru
    Abstract: The paper analyses the food and water consumption, excessive consumption, consumption taxes like fat tax and brings out the business behaviour of tickling food consumption. In addition to taxing and regulating the excessive consumption & the tickling behaviour, it explores the preventive best practices that reinforce natural human ability of self-control over food consumption. It identifies the practices where there is purposeful or consequential reduction on food consumption i.e. weight loss treatment and yoga, proposes clean practice and suggests accounting for savings & carbon incentive. With the efforts to increase physical activity by subsidy proving to be less effective and with the taxes preventing consumption but not reducing temptation in short run the paper considers embedding the best practice in the education to bring the habit of physical activity. Recognising yoga and evaluating the practice for optimizing food consumption may operationalize wellbeing practice, stimulate economic growth, and may lead to completeness in conserving all forms of energy and to completeness in charging of consumption taxes.
    Keywords: Reduction in food consumption; tickle tax
    JEL: I12 D61
    Date: 2012–09–05
  11. By: Andrew F. Cooper (Asian Development Bank Institute (ADBI))
    Abstract: The Group of Twenty (G-20) deserves credit for opening up of the “top table†of global governance to a wider representation of countries on a geographic basis in general and Asia in particular. As both a crisis committee in terms of the reverberations from the 2008 financial crisis and a potential global steering committee for a wider set of economic/developmental issues the summit process includes not only the association of leading association of leading emerging economies referred to as BRICS (Brazil, Russia, India, the Republic of China, and South Africa), but key middle powers such as the Republic of Korea. Yet, as a growing body of literature attests, it is clearly the contested nature of the G-20 that has come to the fore. This paper examines both the strengths and weaknesses of the G-20 from the perspective of input and output legitimacy. Notwithstanding some initial successes the constraints with respect to “output†have become more acute. Moreover, the “input†legitimacy of the G-20 has been eroded by the absence of the United Nations in the design and representational gaps. On the basis of this analysis the paper examines the debates and makes specific policy recommendations by which regionalism, the engagement of small states (through the role of Singapore and the 3-G coalition), and the expansion of the agenda can be utilized as a dynamic of reform for the G-20 without eroding the core strengths in terms of informality and issue-specific focus of the forum.
    Keywords: G-20, global governance, global steering committee, Regionalism
    JEL: D7 F02 G01 F55
    Date: 2012–08
  12. By: Luc Behaghel (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique); Adrien Lorenceau (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Simon Quantin (INSEE - Institut National de la Statistique et des Etudes Economiques - INSEE)
    Abstract: This paper provides quasi-experimental (RDD) estimates of the impact of a tax credit program targeted at less densely populated areas. The program was launched in the mid 1990s in rural France and includes corporate and payroll tax exemptions. Variations over time and across rm types allow un-bundling the overall program impact into three components: a quite restrictive, short-term (1-year) payroll tax exemption on new hires; permanent payroll tax exemptions in the non-pro t sector; and corporate tax exemptions for new rms. We nd no signi cant impact of the program on total employment or the number of plants, and no impact of the di erent program components on targeted subsets of rms. Large positive e ects can be statistically rejected.
    Keywords: Tax exemptions ; Rural Development ; Enterprise Zones
    Date: 2012–09
  13. By: Basab Dasgupta; Christian Zimmermann
    Abstract: We study the impact of loan regulation in rural India on child labor with an overlapping-generations model of formal and informal lending, human capital accumulation, adverse selection, and differentiated risk types. Specifically, we build a model economy that replicates the current outcome with a loan rate cap and no lender discrimination by risk using a survey of rural lenders. Households borrow primarily from informal moneylenders and use child labor. Removing the rate cap and allowing lender discrimination markedly increases capital use, eliminates child labor, and improves welfare of all household types.
    Keywords: Loans ; Child labor ; India
    Date: 2012

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