nep-agr New Economics Papers
on Agricultural Economics
Issue of 2012‒10‒06
27 papers chosen by
Angelo Zago
University of Verona

  1. Food price volatility in sub-Saharan Africa: Has it really increased? By Minot, Nicholas
  2. Agricultural Production, Productivity and R&D over the Past Half Century: An Emerging New World Order By Pardey, Philip G.; Alston, Julian M.; Chan-Kang, Connie
  3. Food vs. Wood: Dynamic Choices for Kenyan Smallholders By Peralta Sanchez, Alexandra
  4. Determinants of Common Bean Productivity and Efficiency: A Case of Smallholder Farmers in Eastern Uganda By Sibiko, Kenneth Waluse
  5. Willingness-to-Pay for Organic Food Products and Organic Purity: Experimental Evidence By Strzok, Jesse L.; Huffman, Wallace E.
  6. A spatio-temporal analysis of agricultural prices: An application to Colombian data By Ana Maria Iregui; Jesús Otero
  7. Stabilization of farm income in the new risk management policy of the EU: a preliminary assessment for Italy through FADN data By Dell'Aquila, Crescenzo; Cimino, Orlando
  8. The Welfare Impact of Land Redistribution: Evidence from a Quasi-Experimental Initiative in Malawi By Mariapia Mendola; Franklin Simtowe
  9. Economic Analysis of Groundnut Production in Kasungu District, Malawi: A production Economics Approach By Kapopo, Vincent; Assa, Maganga
  10. A spatio-temporal analysis of agricultural prices: An application to Colombian data By Ana María Iregui; Jesús Otero
  11. Distortions to agriculture and economic growth in Sub-Saharan Africa By Anderson, Kym; Bruckner, Markus
  12. UPDATE July 2012 | The Food Crises: The US Drought By Marco Lagi; Yavni Bar-Yam; Yaneer Bar-Yam
  13. Rural Households in a Changing Climate By Baez, Javier E.; Kronick, Dorothy; Mason, Andrew D.
  14. 2012 Outlook of the U.S. and World Wheat Industries, 2012-2021 By Taylor, Richard D.; Koo, Won W.
  15. Représenter la diversité des formes familiales de la production agricole. Approches théoriques et empiriques By Sourisseau, J.M.; Bosc, P.M.; Fréguin-Gresh, S.; Bélières, J.F.; Bonnal, P.; Le Coq, J.F.; Anseeuw, W.; Dury, S.
  16. Efficiency and integration in the Zambian sugar market: analysing price transmission, price formation and policy By Chisanga, Brian
  17. Is U.S. Agricultural Productivity Growth Slowing? By V. Eldon Ball; David Schimmelpfennig; Sun Ling Wang
  18. Simultaneous estimation of risk and time preferences among small-scale cattle farmers in West Africa By Liebenehm, Sabine; Waibel, Hermann
  19. Reversing the Property Rights: Practice-Based Approaches for Controlling Agricultural Nonpoint-Source Water Pollution When Emissions Aggregate Nonlinearly By Sergey Rabotyagov; Adriana Valcu; Catherine L. Kling
  20. Territorial Economic Impacts of Climate Anomalies in Brazil By Eduardo A. Haddad; Alexandre A. Porsse, Paula C. Pereda
  21. Common Agricultural Policy effects on dynamic labour use in agriculture By Petrick, Martin; Zier, Patrick
  22. The Determinants of Extreme Commodity Prices By Karlygash Kuralbayeva; Samuel Malone
  23. Do Environmental Regulations Disproportionately Affect Small Businesses? Evidence from the Pollution Abatement Costs and Expenditures Survey By Randy A. Becker; Ronald J. Shadbegian; Carl Pasurka
  24. The role of scarcity in global virtual water flows By Lenzen, Manfred; Bhaduri, Anik; Moran, Daniel; Kanemoto, Keiichiro; Bekchanov, Maksud; Geschke, Arne; Foran, Barney
  25. Breaking Environmental Kuznets Curves. Evaluating Energy and Policy Time Events Effects on CO2 Trends for Advanced Countries By Massimiliano Mazzanti; Antonio Musolesi
  26. The effect of subsidies on the performance and sustainability of microfinance institutions in sub-Saharan Africa By Dlamini, Menzie S.
  27. Recreation Demand Analysis of the "Sensitive Natural Areas" (Hérault District, France) : A Travel Cost Appraisal using Count Data Models By Sébastien Roussel; Jean-Michel Salles; Léa Tardieu

  1. By: Minot, Nicholas
    Keywords: Agricultural and Food Policy, Food Security and Poverty,
    Date: 2012–08
  2. By: Pardey, Philip G.; Alston, Julian M.; Chan-Kang, Connie
    Abstract: Recent trends in farm productivity and food prices raise concerns about whether the era of global agricultural abundance is over. Agricultural R&D is a crucial determinant of agricultural productivity and production, and therefore food prices and poverty. In this paper we review past and present agricultural production and productivity trends and present entirely new evidence on investments in public agricultural R&D worldwide as an indicator of the prospects for agricultural productivity growth over the coming decades. The agricultural R&D world is changing, and in ways that will definitely affect future global patterns of poverty, hunger and other outcomes. The global picture is mixed. In the world as a whole crop yield growth has slowed. In high-income countries productivity growth has slowed significantly, and real spending on agricultural R&D is being reduced. In China, and other middle-income countries, spending on agricultural R&D is being ramped up and productivity growth has not slowed. The overall picture is one in which the middle-income countries are growing in relative importance as producers of agricultural innovations through investments in R&D and have consequently better prospects as producers of agricultural products.
    Keywords: Agricultural and Food Policy, Production Economics, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012–09
  3. By: Peralta Sanchez, Alexandra
    Abstract: Smallholder farmers in many areas of the semiarid tropics are planting exotic tree species that provide alternative income sources, fuel, and building materials. While providing other benefits, these trees often occupy land that could produce annual food crops. This study uses a polyperiod, linear programming model to explore the opportunity cost of planting Eucalyptus grandis and Grevillea robusta trees compared to crops in the Nyando watershed of western Kenya. Results of the ten year period wealth maximization model suggest that a representative farmer’s decisions on farm resource allocation are sensitive to changes in the relative prices of short rotation tree products and annual crops. The model also suggests that there are economic tradeoffs between planting trees and crops, as well as between planting different tree species. Timber production is not likely to replace food crops for two main reasons: (1) the high cost of meeting household subsistence requirements from marketed grains, (2) household cash flow needs met by annual crops. Farmers plant eucalyptus for commercial purposes because they can obtain timber products within four years; however if the prices of these short rotation products go down, farmers will prefer to grow timber from high yield grevillea.
    Keywords: Community/Rural/Urban Development, Production Economics, Resource /Energy Economics and Policy,
    Date: 2012
  4. By: Sibiko, Kenneth Waluse
    Abstract: Agriculture sustains the livelihoods of about 70.8% of Ugandans, while common bean has emerged to be an important cash crop as well as a staple food for the majority of farmers and consumers. Although Uganda’s bean output has more than doubled, average bean yields in the country have been between 0.6 and 0.8 Mt Ha-1, even though yields higher than 1.5 Mt Ha-1 can be realized with improved varieties. Thusthe objective of this study was to determine the factors influencing common beanproductivityand efficiency among smallholder farmers in Eastern Uganda.The study was conducted in Busia, Mbale, Budaka and Tororo districts in Eastern Uganda based on a sample of 280 householdsselected using a multi-stage sampling technique. For the data collection, a personally administered structured questionnaire was used to conduct interviews, with a focus on household heads. In the analyses, descriptive statistics, a stochastic frontier modeland a two-limit Tobit regression model were employed. It was established that bean productivity was positively influenced by plot size, ordinary seeds, certified seeds and planting fertilizers. The mean technical efficiency among bean farms was 48.2%, mean economic efficiency was 59.94% and mean allocative efficiency was 29.37%. Finally, Tobit model estimation revealed that technical efficiency was positively influenced by value of assets at 1% level and extension service and group membership at 5% level; while age and distance to the factor market negatively influenced technical efficiency at 10% and 5% levels respectively. Economic efficiency was positively influenced by value of assets at 1% level and off-farm income and credit at 5% level. However, farmers’ primary occupation negativelyinfluenced economic efficiency at 5% level. Allocative efficiency was positively influenced by value of assets at 1% level and farm size and off-farm income at 10% level; while distance to the factor market negatively influenced allocative efficiency at 5% level.Hence the study recommended on the need for increased provision of extension service and training on correct input application and improved farming technologies to increase bean productivity. It also suggested on the need for policy to discourage land fragmentation, develop road and market infrastructure in rural areas and provide affordable and easily available credit facilities to improve production efficiency of bean farms.
    Keywords: Crop Production/Industries, Farm Management,
    Date: 2012–03
  5. By: Strzok, Jesse L.; Huffman, Wallace E.
    Date: 2012–09–24
  6. By: Ana Maria Iregui; Jesús Otero
    Abstract: This paper studies whether the geographical separation of markets constitutes a factor that helps explain the dynamics of agricultural prices. To do this, we employ a highly disaggregated dataset for Colombia that consists of weekly observations on wholesale prices for 18 agricultural products traded in markets scattered around the country. The sample period spans for almost a decade. According to our results, which are based on generalised impulse response functions, distance (and thus transportation costs) is a factor that helps explain the speed at which prices adjust to shocks in other locations, thus confirming that price adjustments take longer for markets farther apart.
    Keywords: Price analysis, market integration, agriculture, Colombia. Classification JEL: O18; Q13; R12.
    Date: 2012–09
  7. By: Dell'Aquila, Crescenzo; Cimino, Orlando
    Abstract: Risk management and income stabilization have been gaining increasing attention in the EU’s agricultural policy debate, also in connection to the recent proposal of a specific package of measures hypothesized in the ongoing CAP reform. The paper summarizes the current policy picture at EU and Italian levels, deepening country specific issues of construction of an income stabilization tool and providing a quantitative appreciation of the financial importance of a generalized measure of income stabilization for Italian farms. Estimates of farms’ losses and compensations are differentiated by type of farming and dimension of farms. The results are discussed looking at the perspectives of the new policies under scrutiny
    Keywords: risk management, income stabilization, agricultural policy, FADN, Agricultural and Food Policy, Risk and Uncertainty, Q18,
    Date: 2012–06
  8. By: Mariapia Mendola; Franklin Simtowe
    Abstract: Even though land reform may be an effective means of reducing poverty, evidence on its causal effects is scant. This paper uses household panel data combined with a quasi- experimental program to assess the impact of a joint Malawi/World Bank land redistribution project on households’ productivity and well-being in southern Malawi. Double difference and matching methods are used to address sources of selection bias in identifying impacts. Results point to average positive effects of the land program on land holdings, agricultural output, income, food security and asset ownership of beneficiary households. Yet, beneficiaries do not see an improvement in access to social services such as schools and health facilities. There is also evidence of heterogeneous effects by gender and inheritance systems. Overall, our findings suggest that there is scope for reducing poverty and inequality in developing countries by implementing a decentralized, community-based, voluntary approach to land reform through the provision of land to land-poor households.
    Keywords: Land Reform, Program Evaluation, Community Based Rural Land Development Program, Malawi
    Date: 2012–09
  9. By: Kapopo, Vincent; Assa, Maganga
    Abstract: This study was rolled out to assess resource use efficiency in small scale groundnut production in Kasungu district. A household survey was administered to 42 groundnut farmers in Northern part of Kasungu district. The study has established that a farmers return MK2 for every Kwacha invested. The farmer incurs MK95 for every Kg of groundnut produced. The foregoing analysis of production function indicated that farm size, seed and labour are the important factors of production that affect groundnut output in the study area. The regression coefficients of these inputs were positive and statistically significant. Farm size had the highest MVPs as compared to other inputs. Seed was the second production factor with higher MVP indicating that farmers can increase their groundnut output by using optimal seedrate. The main constraints to marketing included low output prices and poor (unstandardized) measurement scales.
    Keywords: Groundnut; MVP; Smallholder farmer; Kasungu
    JEL: D24
    Date: 2012–09–27
  10. By: Ana María Iregui; Jesús Otero
    Abstract: This paper studies whether the geographical separation of markets constitutes a factor that helps explain the dynamics of agricultural prices. To do this, we employ a highly disaggregated dataset for Colombia that consists of weekly observations on wholesale prices for 18 agricultural products traded in markets scattered around the country. The sample period spans for almost a decade. According to our results, which are based on generalised impulse response functions, distance (and thus transportation costs) is a factor that helps explain the speed at which prices adjust to shocks in other locations, thus confirming that price adjustments take longer for markets farther apart.
    Date: 2012–09–25
  11. By: Anderson, Kym; Bruckner, Markus
    Abstract: To what extent has Sub-Saharan Africa's slow economic growth over the past five decades been due to price and trade policies that discouraged production of agricultural relative to non-agricultural tradables? This paper uses a new set of estimates of policy induced distortions to relative agricultural prices to address this question econometrically. First, the authors test if these policy distortions respond to economic growth, using rainfall and international commodity price shocks as instrumental variables. They find that on impact there is no significant response of relative agricultural price distortions to changes in real GDP per capita growth. Then, the authors test the reverse proposition and find a statistically significant and sizable negative effect of relative agricultural price distortions on the growth rate of Sub-Saharan African countries. The fixed effects estimates yield that, during the 1960-2005 period, a ten percentage points increase in distortions to relative agricultural prices decreased the region's real GDP per capita growth rate by about half a percentage point per annum.
    Keywords: Economic Theory&Research,Achieving Shared Growth,Inequality,Markets and Market Access,Emerging Markets
    Date: 2012–09–01
  12. By: Marco Lagi; Yavni Bar-Yam; Yaneer Bar-Yam
    Abstract: Recent droughts in the midwestern United States threaten to cause global catastrophe driven by a speculator amplified food price bubble. Here we show the effect of speculators on food prices using a validated quantitative model that accurately describes historical food prices. During the last six years, high and fluctuating food prices have lead to widespread hunger and social unrest. While a relative dip in food prices occurred during the spring of 2012, a massive drought in the American Midwest in June and July threatens to trigger another crisis. In a previous paper, we constructed a model that quantitatively agreed with food prices and demonstrated that, while the behavior could not be explained by supply and demand economics, it could be parsimoniously and accurately described by a model which included both the conversion of corn into ethanol and speculator trend following. An update to the original paper in February 2012 demonstrated that the model previously published was predictive of the ongoing price dynamics, and anticipated a new food crisis by the end of 2012 if adequate policy actions were not implemented. Here we provide a second update, evaluating the effects of the current drought on global food prices. We find that the drought may trigger the expected third food price bubble to occur sooner, before new limits to speculation are scheduled to take effect. Reducing the amount of corn that is being converted to ethanol may address the immediate crisis. Over the longer term, market stabilization requires limiting financial speculation.
    Date: 2012–09
  13. By: Baez, Javier E. (World Bank); Kronick, Dorothy (World Bank); Mason, Andrew D. (World Bank)
    Abstract: This paper argues that climate change poses two distinct, if related, sets of challenges for poor rural households: challenges related to the increasing frequency and severity of weather shocks and challenges related to long-term shifts in temperature, rainfall patterns, water availability, and other environmental factors. Within this framework, we examine evidence from existing empirical literature to compose an initial picture of household-level strategies for adapting to climate change in rural settings. We find that although households possess numerous strategies for managing climate shocks and shifts, their adaptive capacity is insufficient for the task of maintaining – let alone improving – household welfare. We describe the role of public policy in fortifying the ability of rural households to adapt to a changing climate.
    Keywords: climate change, rural households, adaptation, risk-coping mechanisms, long-term effects
    JEL: Q12 Q54 O13
    Date: 2012–09
  14. By: Taylor, Richard D.; Koo, Won W.
    Abstract: This report evaluates the U.S. and world wheat markets for the 2012-2021 time period using the Global Wheat Policy Simulation Model. This analysis is based on a series of assumptions about general economic conditions, agricultural policies, weather conditions, and technological change. Both the U.S. and world wheat economies are predicted to remain relatively healthy for the next ten years. World demand for both common and durum wheat are expected to remain strong. The high price levels in 2010 and early 2011 will not be maintained because they are the result of a small wheat crop in 2010 in the Former Soviet Union (FSU). It is expected that wheat production in the FSU will return to normal in the future. World trade volumes of both durum and common wheat are expected to expand, but trade volume of common wheat may grow faster than that of durum wheat.
    Keywords: common wheat, durum wheat, production, exports, consumption, ending stocks, Crop Production/Industries, International Relations/Trade,
    Date: 2012–06
  15. By: Sourisseau, J.M.; Bosc, P.M.; Fréguin-Gresh, S.; Bélières, J.F.; Bonnal, P.; Le Coq, J.F.; Anseeuw, W.; Dury, S.
    Abstract: The transformation of family-based agricultural structures is compelling the academic and policy environments. The questions being advanced cross the history of agricultural representations since a century. The ways of seeing and representing the different forms of agriculture relate to these transformations. Family farming has acquired an international legitimacy but is presently questioned by agricultural evolutions in developed countries as well as in developing or emerging ones. The Sustainable Rural Livelihoods (SRL) approach allows a global comprehension of the agricultural entity as a constituent of an activity system that has become multi-sectoral and multi-situational, relating to market and non-market regulations. The relative significance and the nature of the mobilized capitals led us to schematically present six organizational forms of family agriculture in New-Caledonia, in Mali, in Viet-Nam, in South Africa, France and Brazil. A more generic characterization that foresees our representation framework proposal poses new methodological challenges. ...French Abstract : Les mutations des agricultures familiales interrogent le monde académique et les politiques. Cette interrogation traverse l’histoire des représentations de l’agriculture depuis un siècle. Les manières de voir ces agricultures ont accompagné leurs transformations. Aujourd’hui, l’agriculture familiale acquiert une légitimité internationale mais elle est questionnée par les évolutions des agricultures aux Nords comme aux Suds. L’approche Sustainable Rural Livelihoods (SRL) permet une appréhension globale du fait agricole comme une composante de systèmes d’activités multi sectoriels et multi situés dont les logiques renvoient à des régulations marchandes et non marchandes. Le poids relatif et la nature des capitaux mobilisés permettent de représenter de manière stylisée six formes d’organisation de l’agriculture familiale en Nouvelle-Calédonie, au Mali, au Viêt-Nam, en Afrique du Sud, en France et au Brésil. Une caractérisation plus générique, qu’esquisse notre proposition de méthode de représentation des agricultures est enfin proposée, qui pose de nouvelles questions méthodologiques.
    JEL: O13 O57 Q12
    Date: 2012
  16. By: Chisanga, Brian
    Abstract: Efficiency and integration in the Zambian sugar market: analysing price transmission, price formation and policy By Brian Chisanga Degree: MSc. Agric (Agricultural Economics) Department: Agricultural Economics, Extension and Rural Development Supervisor: Dr Ferdinand Meyer Zambia ranks as one of the lowest cost producers of sugar. However, Zambia‟s domestic sugar price has been high and volatile and is substantially higher than the world price. This has raised concern among stakeholders and further raises questions about the efficient functioning of the market. The study sought to determine and explain efficiency and integration in Zambia‟s sugar value chain by analysing price spreads, price formation, and price transmission through a price transmission and partial equilibrium model. The study hypothesised that the Zambian sugar market is both inefficient and it is not integrated with the world market. This was tested through the price transmission and partial equilibrium models. Price transmission is conceptually premised on the Law of One Price (LOP) which postulates that in a frictionless undistorted market, the difference between markets spatially separated should only be explained by transaction costs. To test the hypothesis long-run equilibrium between prices was tested through a series of cointegration tests and an Error Correction model (ECM) was built for cointegrating price series. Model simulations were run and tests for asymmetry for cointegrating price series were conducted. A partial equilibrium framework was developed to determine price formation for Zambia‟s sugar market from a number of behavioural equations. - v - The study establishes cointegration in the spatial price transmission (between world sugar prices and Zambia‟s wholesale prices) and vertically (between the domestic wholesale prices and sugarcane prices). The ECM for the spatial price transmission reveals low integration and efficiency evidenced by the low speed of adjustment, the Error Correction Term (ECT) of -0.09 and the model simulation, which shows that it takes approximately 3 years for the markets to revert to long run equilibrium after experiencing a price shock. The study also establishes that the spatial price adjustment is asymmetric. The vertical price transmission analysis reveals that it is relatively more integrated and efficient as it has a higher speed of adjustment (ECT of 0.199) which is twice that of the spatial price transmission. The model simulation reveals that it takes about 1 year and 6 months to revert to long run equilibrium after experiencing a shock. The vertical price adjustment is also found to be symmetric. A negative short-run elasticity of -0.29 is found for the spatial price transmission while the long-run transmission is found to be inelastic (0.91 ) which is close to unitary elasticity. The short-run vertical transmission is found to be very inelastic (0.009 ) while the long-run transmission of 0.94 is similar to the spatial transmission (inelastic but close to unitary). Farm to Retail Price Spreads are found to be widening with growing volatility owing to the volatile nature of the Retail Value. While the Farm Value has been increasing, recent spikes experienced in the Retail Value have resulted in an overall widening of the Farm to Retail Price Spread. The partial equilibrium analysis indicates that the price formation in Zambia‟s sugar market is determined by the world price through the export parity price, domestic demand, supply conditions as well as policy. The elasticity between Zambia‟s sugar price and the export parity price is found to be unitary (1.09). The price space analysis reveals that although Zambia‟s domestic price is correlated with the export parity prices it is trending closer to the import parity price. This suggests that there are distortions in the sugar market, which may include high transaction costs, high concentration in the market structure as well as inappropriate policies such as high taxation, high interest rates and a policy requiring fortification of all sugar with Vitamin A, which are driving the domestic price upwards to exceed the export parity price. The sugar baseline for Zambia is generated for 2012 to 2015 based on a number of assumptions in the exogenous variables. - vi - Sugar production domestic use and exports are on the rise while the domestic price rises in 2011, falling between 2013 and 2014 then rising in 2014 to 2015. Model simulation of the removal and/or modification of the policy requiring sugar fortification reveals that there is an increase in the flow of imports to about 25,000 tons per year. This results in a 3.2 per cent loss in production and a 6.1 per cent gain in exports while the domestic sugar price falls by 23.9 US Cents/kg (18.8 per cent). Thus Zambia gains in terms of increased consumer welfare and producer welfare because production losses are offset by revenue gains through exports since the world price also increases. The study recommends that transaction costs which include transportation costs, energy, taxation which are pushing the domestic price upwards need to be lowered. The study emphasises the need to promote investments in the sugar industry especially for smaller emerging sugar mills by lowering interest rates and taxes as well as a need to strengthen competition laws governing the industry which will protect consumers,would-be- investors and cane producers from uncompetitive pricing. It further recomments the lifting and /or modification of the barrier on imports of unfortified sugar but stresses that government can allow raw sugar imports which can be fortified in Zambia. A more open and undistorted sugar market in Zambia will result in a competitive, efficient and integrated market governed by market dynamics.
    Keywords: price transmission, price formation, efficiency, integration, Agricultural and Food Policy,
    Date: 2012–06
  17. By: V. Eldon Ball; David Schimmelpfennig; Sun Ling Wang
    Abstract: Tests for a structural break in a time series typically involves partitioning the data into two sub-periods and compare the resulting mean rates of growth. A more formal approach involves estimating the regression parameters for each sub-period and testing theequality of the two sets of parameters. An important limitation of both approaches is that the breakdate must be known a priori. The researcher must either pick an arbitrary breakdate or pick a breakdate based on some known feature of the data. The test results can be "uninformative" because they can miss the true breakdate, or can be ‘misleading’ because the breakdate is endogenous and the test can indicate a break when none in fact exists. This paper tests for slower productivity growth in agriculture using techniques that allow for unknown structural breaks jointly with a possible unit root that can have either or both stochastic and deterministic components.
    Keywords: Agriculture, Total factor productivity growth, Structural breaks
    Date: 2012–09
  18. By: Liebenehm, Sabine; Waibel, Hermann
    Abstract: This study investigates risk and time preferences of small-holder cattle farmers in West Africa. We apply a discounted utility model and jointly estimate a prospect theory-based utility function and a quasi-hyperbolic discounting function using a maximum likelihood method. Results show that West African farmers are less loss-averse and are more patient than suggested by comparable studies in Asian developing countries. The main factors influencing farmers' risk and time preferences are cattle herd size and net revenue from sales of cattle products.
    Keywords: experiments, prospect theory, risk preference, time preference, West Africa
    JEL: D81 C61 C93
    Date: 2012–07
  19. By: Sergey Rabotyagov; Adriana Valcu; Catherine L. Kling (Center for Agricultural and Rural Development (CARD))
    Abstract: Nonpoint-source pollution remains a troubling source of water quality problems despite decades of economics research on the matter. Among the chief difficulties for addressing the issue are the property rights assignments implicit in the current policy environment that favor agricultural nonpoint-source pollution, the unobservability of field-level emissions, and complex fate and transport relationships linking them to ambient water quality. Theoretical and practical considerations lead to the focus on observable abatement actions (conservation practices). Biophysical models are increasingly more capable of linking abatement actions to policy-relevant water quality outcomes. If costs of abatement actions are known, finding the least-cost mix of abatement actions is possible, while incorporating the nonlinearity of the pollution process. When costs are not known or information is incomplete, regulators can rely on flexible incentive-based programs, but the design of such programs is complicated by the complexities of emission aggregation. In this work, we focus on the regulator capable of focusing on nonpoint-source emitters. We address the design and performance of three practice-based approaches, ranging from the command-and-control approach mandating practices, to the more flexible performance standard approach where farmers are free to select the optimal mix of on-farm conservation practices, to a fully flexible approach where credits for conservation practices are freely tradable. We do so by utilizing the representation of the nonlinear emission aggregation (fate and transport) process (the Soil and Water Assessment Tool model), and consider cases ranging from the regulator having perfect information on the costs of conservation practices to no information at all. We show how workable programs utilizing the biophysical models and simulation-optimization approaches can be designed, and assess their performance relative to the efficient case. We find that flexible programs perform well both in terms of cost and water quality goals attainment. In particular, a trading program designed around an approximation of the nonlinear pollution process performs well, relative to first-best under no information on the cost of conservation practices.
    Date: 2012–09
  20. By: Eduardo A. Haddad; Alexandre A. Porsse, Paula C. Pereda
    Abstract: This paper evaluates the systemic impact of climate variations in a regional perspective using an interregional CGE model integrated with a physical model estimated for agriculture in order to catch the effects of climate change. The climate anomalies are estimated for 2005 and represent deviations over the historic trend. The results of this paper suggest that the economic costs of climate anomalies can be significantly underestimated if only partial equilibrium effects (direct impact/damage) are accounted for. The results show that a general equilibrium approach can provide a better comprehension about the systemic impact of climate anomalies, suggesting the economic costs are higher than those that would be observed in a partial equilibrium analysis. In addition, intersectoral and interregional linkages as well price effects seem to be important transmission channels in the context of systemic impact of climate anomalies.
    Keywords: climate anomalies, systemic impact, interregional CGE analysis
    JEL: Q54 R13
    Date: 2012–09–15
  21. By: Petrick, Martin; Zier, Patrick
    Abstract: The aim of this study is to investigate the effects of direct payments and rural development measures of the EU’s Common Agricultural Policy (CAP) on employment in agriculture. We work with a dynamic labour demand equation augmented by the full set of policy instruments of the CAP, which is estimated on a panel dataset of 69 East German regions. We present results for four estimators which differ in how they eliminate the fixed effects and how they address the endogeneity of the lagged dependent variable. The results suggest that there were few desirable effects on job maintenance in agriculture. While there is some indication that investment subsidies have halted labour shedding on farms, a rise in the general wage level reduced labour use in agriculture. Changes in direct payments had no employment effects. Generally, labour adjustment exhibits a strong path dependency. Das Ziel dieser Studie ist es, die Auswirkungen der im Rahmen der Gemeinsamen Agrarpolitik (GAP) gewährten Direktzahlungen und der Maßnahmen zur ländlichen Entwicklung auf die Beschäftigung im Agrarsektor zu untersuchen. Wir verwenden hierfür eine dynamische Arbeitsnachfragegleichung, welche um das vollständige Maßnahmenbündel der GAP erweitert wurde. Diese Gleichung wird für einen Paneldatensatz aus 69 ostdeutschen Landkreisen geschätzt. Wir stellen Ergebnisse für vier verschiedene Schätzer vor, die sich darin unterscheiden, wie sie fixe Effekte und die Endogenität der verzögert abhängigen Variable kontrollieren. Die Ergebnisse legen nahe, dass es wenige wünschenswerte Effekte auf die Beschäftigungssicherung in der Landwirtschaft gegeben hat. Einige Ergebnisse sprechen dafür, dass Investitionsbeihilfen den Arbeitskräfteabbau verlangsamt haben. Ein Anstieg des allgemeinen Lohnniveaus hat den Arbeitseinsatz in der Landwirtschaft verringert. Änderungen in den Direktzahlungen hatten keinen Beschäftigungseffekt. Grundsätzlich zeigt die Anpassung des Arbeitseinsatzes eine starke Pfadabhängigkeit.
    Keywords: Agricultural employment, Dynamic panel data models, Common Agricultural Policy, East Germany, Landwirtschaftliche Beschäftigung, Dynamisches Paneldaten Modell, Gemeinsame Agrarpolitik, Ostdeutschland, Agricultural and Food Policy, Labor and Human Capital, Q18, J43, C23,
    Date: 2012–08
  22. By: Karlygash Kuralbayeva; Samuel Malone
    Abstract: Fat-tailed commodity price innovations are well-documented in the literature and long recognized as disruptive for consumers and producers, yet little is known about what factors drive such extreme events. Utilizing a wide range of factors from the economiccs and finance literature and quantile regression techniques, we shed light on this issue. Our models explain more variation in extreme than in median price innovations. Common global financial and demand factors account for a greater proportion of extreme aily spot price variations than do commodity-specific factors such as basis and open interest. Financialization of commodity markets, via significant and increasing co-variation of extreme spot price innovations with US equity market and trade-weighted US dollar returns, appears to be a major driver of extreme events in the 2000-09 period.
    Keywords: commodities price returns, extreme dependence, quantile regressions
    JEL: G13 G15 E31
    Date: 2012
  23. By: Randy A. Becker; Ronald J. Shadbegian; Carl Pasurka
    Abstract: It remains an open question whether the impact of environmental regulations differs by the size of the business. Such differences might be expected because of statutory, enforcement, and/or compliance asymmetries. Here, we consider the net effect of these three asymmetries, by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) surveys of 1974-1982, 1984-1986, 1988-1994, 1999, and 2005, combined with data from the Annual Survey of Manufactures and Census of Manufactures. We model establishments’ PAOC intensity – that is, their pollution abatement operating costs per unit of economic activity – as a function of establishment size, industry, and year. Our results show that PAOC intensity increases with establishment size. We also find that larger firms spend more per unit of output than do smaller firms.
    Keywords: Environmental Regulation, costs, Business size, U. S.manufactoring
    JEL: L51 L60 Q52
    Date: 2012–09
  24. By: Lenzen, Manfred; Bhaduri, Anik; Moran, Daniel; Kanemoto, Keiichiro; Bekchanov, Maksud; Geschke, Arne; Foran, Barney
    Abstract: Recent analyses of the evolution and structure of trade in virtual water revealed that the number of trade connections and volume of virtual water trade have more than doubled over the past two decades, and that developed countries increasingly draw on the rest of the world to alleviate the pressure on their domestic water resources. Our work builds on these studies, but fills three important gaps in the research on global virtual water trade. First, we note that in previous studies virtual water volumes are lumped together from countries experiencing vastly different degrees of water scarcity. We therefore incorporate water scarcity into assessments of virtual water flows. Second, we note that some previous studies assess virtual water networks only in terms of immediate water used for food production, but omit indirect virtual water used throughout the supply chains underlying all traded goods. In our analysis we therefore use input-output analysis to also include indirect virtual water. We note existing conflicting views about whether trade in virtual water can lead to overall savings in global water resources. We re-visit the Heckscher-Ohlin Theorem in the context of direct as well as indirect virtual water in order to determine whether international trade can be seen as a feasible demand management instrument in alleviating water scarcity. We find that the structure of global virtual water networks changes significantly after adjusting for water scarcity. In addition, when indirect virtual water is appraised the Heckscher-Ohlin Theorem can be validated.
    Keywords: Virtual water, multi-region input-output analysis, regional aggregation, scarcity, international trade, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy,
    Date: 2012–09
  25. By: Massimiliano Mazzanti; Antonio Musolesi
    Abstract: This paper documents the structural differences among advanced countries with regard to their long run carbon-income relationships. On the basis of a first application of intervention analysis to Environmental Kuznets curves, we show that time related effects, namely structural breaks, have been predominantly relevant in explaining the eventual occurrence of such bell shaped curves. We indeed find great heterogeneity of effects in comparing advanced countries long run performances. The different response in terms of environmental policy and innovation efforts of northern EU to exogenous policy events such as the 1992 climate change Rio convention, that gave earth to the Kyoto era, and to the second oil shock that preceded it in the 80’s are among the underlying causes. Environmental policy can be or create the pre conditions to exert long run beneficial shocks to the energy-economic system. Evidence provides food for thought for the post Kyoto era policy making, just after the Rio+20 step.
    Keywords: Carbon Kuznets Curves; Rio convention; policy events; oil shocks; intervention analysis; structural breaks
    JEL: C22 Q53
    Date: 2012–09–23
  26. By: Dlamini, Menzie S.
    Abstract: Microfinance Institutions (MFIs) in sub-Saharan Africa (SSA) and the developing world have over the years attracted and received billions of US dollars (valued at over US$4 billion annually worldwide) in subsidies and concessionary funds. These subsidies are used to capitalize, promote growth, and help improve efficiency, operations and performance of newly established MFIs. At face value these interventions seem positive, yet studies have shown that they can be counterproductive in terms of their effect on the performance, efficiency and self-sustainability of the MFIs. This research addresses this issue by identifying four determinants of MFI’s performance and analysing the effect that subsidies have on them. A quantitative approach was used in the analysis in which the financial data of 92 MFIs were estimated using panel data estimation. The method of variable selection was based on the procedure used by Nawaz (2010). This method of determining the relationship between selected performance and sustainability indicators and subsidy was modelled on the Subsidy Dependant Index (SDI) method of analysis developed by Yaron (1992a) and the Return on Asset (ROA), Operational Self-Sufficiency (OSS) and Financial Self-Sufficiency (FSS) methods of analysis developed by the SEEP Network (2005). The summary results of the analysis showed that the majority of MFIs (90.22%) were not sustainable nor were they found to be profitable. However, the results show that all the institutions were operationally self-sufficient and that, on average, MFIs in SSA charged higher interest rates than MFIs in other parts of the world. The average OSS was 136.01% showing that MFIs are operationally self-sufficient. However, the average FSS value was ix 74.32% reflecting that the MFIs are not able to raise enough revenue to cover their capital and indirect costs which would ultimately result in them running out of equity funds. The inclusion of subsidies in the sustainability regressions resulted in a decline in the ability of the MFIs to attain operational and financial self-sufficiency, thus showing the negative effect subsidies have on the sustainability of MFIs. Inflation and interest rates charged on loans also had a negative effect on sustainability as they resulted in an increase in costs and a decline in the number of low income clients. MFIs located in wealthier countries were found to be more efficient because of the lower costs associated with having wealthier clients who have larger loan sizes. MFIs in lower income countries have to overcome limitations of weak infrastructures, low population densities and rural markets which increase operating costs. Older institutions were found to more likely be sustainable than new and young MFIs as expected because of their improved efficiency and productivity and also because they have more experience and are therefore better equipped to overcome challenges. However, by adding subsidy in the analysis the results show that the level of efficiency of MFIs is reduced. The results also show that with increased maturity MFIs are found to be more productive, however, when subsidies are included in the finances the levels of productivity will decline as costs increase. NBFIs are the most suitable business model to practice in MFIs in Africa according to the findings which reflect that NBFIs are more profitable and efficient than any of the other business models in the sample. However, cooperatives were found to be the most productive business model as they have a stronger borrower to staff ratio than the other institutional types. Furthermore, cooperatives and NBFIs tend to have clients who are better off and therefore can afford to take larger sized loans, unlike clients of NGOs who are poor who struggle to have a stable income.
    Keywords: Agricultural Finance,
    Date: 2012–05
  27. By: Sébastien Roussel; Jean-Michel Salles; Léa Tardieu
    Abstract: Natural areas are essentially multifunctional, contributing in multiple ways to human well-being. Ecosystem goods and services are provided through ecosystem func- tions (regulation, habitat, production and information). Among the multiple services provided by natural areas, recreational services are increasingly valuable. The main objective of our paper is to evaluate the recreation demand of the Sensitive Natural Areas(SNA) public policy in the Hérault District (Languedoc-Roussillon Region, France). These natural areas are acquired as land ownership by the Hérault District to ensure their protection from urban pressure and making them free to access. We highlight the recreation bene…ts in a Cost-Bene…t Analysis (CBA) whilst measuring [...].
    Date: 2012–09

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