New Economics Papers
on Agricultural Economics
Issue of 2012‒10‒27
twenty-one papers chosen by

  1. Does agriculture matter? Revisiting the farm income problem in Italy By Gianluca Stefani; Benedetto Rocchi; Donato Romano
  2. Agricultural Decisions after Relaxing Credit and Risk Constraints By Karlan, Dean S.; Osei, Robert; Osei-Akoto, Isaac; Udry, Christopher
  3. Agriculture Reform and Food Crisis in Syria: Impacts on Poverty and Inequality By Benedetto Rocchi; Donato Romano; Raid Hamza
  4. Agri-environmental Management during EU Integration of Bulgaria By Bachev, Hrabrin
  5. The Impact of Sanitary and Phytosanitary Measures on Market Entry and Trade Flows By Pramila Crivelli; Jasmin Gröschl
  6. Certifying in Contested Spaces: Private Regulation in Indonesian Forestry and Palm Oil By John F. McCarthy
  7. Natural capital, ecological scarcity and rural poverty By Barbier, Edward B.
  8. An Overview of Carbon Offsets from Agriculture By Gonzalex-Ramirez, Jimena; Kling, Catherine Louise; valcu, adriana
  9. Why is Measured Productivity so Low in Agriculture? By Todd Schoellman; Berthold Herrendorf
  10. Stringent Maximum Residue Limits, Protectionism, and Competitiveness: The Cases of the US and Canada By Xiong, Bo; Beghin, John C.
  11. Problems of Rural Development in the Wake of the Municipal Reform in Russia By Irina Starodubrovskaya; Nina Mironova
  12. Determinants of Tanzanian export prices By Rollo, Valentina
  13. The Effects of Effciency and TFP Growth on Nitrogen and Sulphur Emissions in Europe: A Multistage Spatial Analysis By Anthony J. Glass; Karligash Kenjegalieva; Robin Sickles
  14. Marriage as women's old age insurance : evidence from migration and land inheritance practices in rural Tanzania By Kudo, Yuya
  15. Trade Restrictiveness Indices in Presence of Externalities: An Application to Non-Tariff Measures By Beghin, John C.; Disdier, Anne-Celia; Marette, Stephan
  16. Is green growth good for the poor ? By Dercon, Stefan
  17. Comparing Parametric and Nonparametric Regression Methods for Panel Data: the Optimal Size of Polish Crop Farms By Tomasz Gerard Czekaj; Arne Henningsen
  18. Estimating the Long-Run Impact of Forest Fires on the Eucalyptus Timber Supply in Galicia, Spain By Manuel González-Gómez; Marcos Alvarez-Díaz; Mª Soledad Otero-Giraldez
  19. The use of economic valuation in environmental policy: providing research support for the implementation of Eu Water Policy Under Aquastress By Koundouri, Phoebe; Remoundou, Kyriaki
  20. The role of local and newcomer entrepreneurs in rural development: A comparative meta-analytic study By Gulumser, A.A.; Baycan Levent, T.; Nijkamp, P.; Poot, H.J.
  21. Second generation biofuel production in the Netherlands. A spatially-explicit exploration of the economic viability of a perennial biofuel crop By Diogo, V.; Koomen, E.; Hilst, F. van der

  1. By: Gianluca Stefani (Università degli Studi di Firenze); Benedetto Rocchi (Università degli Studi di Firenze); Donato Romano (Università degli Studi di Firenze)
    Abstract: The prevalence of low income among agricultural households has long been known as the “farm problem”. Although revisited by a number of recent studies the farm problem is still one of the rationales of agricultural policies. We apply the Oaxaca decomposition to investigate how differences in well-being between agricultural and non agricultural households in Italy are affected by the structural characteristics of households rather than specificities of the agricultural sector. Findings indicate that the latter component accounts only for one third of the difference in well-being. Therefore, tackling the adverse mix of characteristics that negatively impact well-being in agricultural households would seem to require the implementation of targeted – but not necessarily sector-specific – policies.
    Keywords: farm income problem, agricultural households, Oaxaca decomposition
    JEL: Q18 J79
    Date: 2012
  2. By: Karlan, Dean S.; Osei, Robert; Osei-Akoto, Isaac; Udry, Christopher
    Abstract: The investment decisions of small-scale farmers in developing countries are conditioned by their financial environment. Binding credit market constraints and incomplete insurance can reduce investment in activities with high expected profits. We conducted several experiments in northern Ghana in which farmers were randomly assigned to receive cash grants, grants of or opportunities to purchase rainfall index insurance, or a combination of the two. Demand for index insurance is strong, and insurance leads to significantly larger agricultural investment and riskier production choices in agriculture. The salient constraint to farmer investment is uninsured risk: when provided with insurance against the primary catastrophic risk they face, farmers are able to find resources to increase expenditure on their farms. Demand for insurance in subsequent years is strongly increasing in a farmer’s own receipt of insurance payouts, and with the receipt of payouts by others in the farmer’s social network. Both investment patterns and the demand for index insurance are consistent with the presence of important basis risk associated with the index insurance, and with imperfect trust that promised payouts will be delivered.
    Keywords: agriculture; credit markets; insurance markets; misallocation; risk; underinvestment
    JEL: C93 D24 D92 G22 O12 O13 O16 Q12 Q14
    Date: 2012–10
  3. By: Benedetto Rocchi (Università degli Studi di Firenze); Donato Romano (Università degli Studi di Firenze); Raid Hamza
    Abstract: The paper pursues a two-fold objective. From a methodological viewpoint it shows how to carry out an impacts evaluation of exogenous shocks on poverty and inequality in a context characterized by out-of-equilibrium, poorly-adjusting markets, as it is the case in many developing countries, using a social account matrix framework. From an empirical viewpoint it provides an assessment of how the cereal price spikes of 2007-2008 and the global recession of 2008-2009 have impacted the welfare of Syrian households and how did they compound with the on-going agricultural sector liberalisation implemented by the Government of Syria over the last decade. This will contribute to shed some lights on the economic background behind the spreading of unrest across the country over the last year or so. The results show that liberalisation impacts are very different and largely affected by the adopted budget closure rules. While reforms aiming at reducing agricultural market distortions (such as production subsidies and price support for strategic crops) could generally have a positive effect on both growth and poverty and inequality, the elimination of food security interventions (such as food stamp schemes) determines an adverse distributional impact against rural household and an increase of poverty. The recent macroeconomic shocks (food price crisis and the global recession) determined a generalized poverty increase and showed an income distribution bias against rural households. Two fundamental policy implications can be drawn by this study. First, the liberalisation of agricultural sector shows a significant growth potential and is likely to determine positive effects on poverty through a generalised increase of incomes as well as public budget savings that could be used for pursuing other policy goals. Second, in the short-run there is a structural trade-off between equity improvements and poverty alleviation: the policy options that will more likely reduce absolute poverty show undesirable distributive biases (both on overall inequality and on rural households vis-à-vis urban households). This calls for a careful targeting of how to use budget savings generated by agriculture liberalisation.
    Keywords: poverty, inequality, agricultural liberalisation, social accounting matrix, Syria.
    Date: 2012
  4. By: Bachev, Hrabrin
    Abstract: This paper suggests a holistic framework for analyzing the forms and efficiency of agri-environmental management; assesses evolution of market, private, public and hybrid modes of agri-eco-governance during transition and EU integration in Bulgarian; evaluates the impacts of EU CAP on environmental sustainability of Bulgarian farms; specifies major environmental challenges in Bulgarian agriculture, and suggests recommendations for improvement of public policies for effective environmental management. First, it incorporates interdisciplinary New Institutional Economics and suggests a comprehensive framework of analyzing the eco-management in agriculture. Second, it presents the evolutions of diverse forms of eco-management during post-communist transition and EU integration of Bulgarian agriculture, and analyzes their impact(s) on agents’ behaviour and efficiency. Third, it assesses the impact(s) of dominating system of management and the new public (EU, national) measures on the state of environment, and identifies major eco-challenges, conflicts and risks. Forth, it evaluates the impacts of EU CAP implementation on eco-performance of Bulgarian farms. Finally, it suggests recommendations for institutional modernization and for improvement of public policies for effective environmental management.
    Keywords: agri-eco-governance; market; private; public modes; agricultural transition; eco-effects of EU CAP; Bulgaria
    JEL: Q28 Q24 O13 Q12 Q25 Q18 Q26 O17 Q13
    Date: 2012–10–20
  5. By: Pramila Crivelli; Jasmin Gröschl
    Abstract: In an attempt to disentangle the impact of sanitary and phytosanitary (SPS) measures on trade patterns, we estimate a Heckman selection model on the HS4 disaggregated level of trade. We find that aggregated SPS measures constitute barriers to agricultural and food trade consistently to all exporters. But conditional on market entry, trade flows are positively affected by SPS measures. Additionally, we find that SPS measures related to conformity assessment hamper market entry and trade flows, while SPS measures related to product characteristics pose an entry barrier but increase bilateral trade flows conditional on meeting the standard.
    Keywords: Agriculture, International Trade, Sanitary and PhytosanitaryMeasures, Conformity Assessment, Heckman Selection Model
    Date: 2012–09
  6. By: John F. McCarthy
    Abstract: Over recent years, systems of civil or private regulation have emerged across several commodity sectors in developing countries. This paper compares two regulatory systems applied to parallel food and forestry problems: the Forest Stewardship Council (FSC) and the Roundtable on Sustainable Palm Oil (RSPO). Analysing these regulations as attempts to extend procedural and distributional justice into contested forested and agricultural spaces, the paper examines the paradox that, despite successful advocacy campaigns using these regulatory standards, oil palm and timber estates and associated land conflicts continue to proliferate in Indonesia. These regulatory processes provide leverage within bounded spaces, yet they are limited by an incommensurability of values and interests that reflect underlying structural problems. At best these certification schemes provide limited learning tools. Addressing the underlying problems will require legal reforms, effective State engagement and supporting forms of accountability.
    Keywords: Regulatory, forestry, land conflicts, Palm oil, Indonesia, certifying working papers series
    Date: 2012–09
  7. By: Barbier, Edward B.
    Abstract: Much of the rural poor -- who are growing in number -- are concentrated in ecologically fragile and remote areas. The key ecological scarcity problem facing such poor households is a vicious cycle of declining livelihoods, increased ecological degradation and loss of resource commons, and declining ecosystem services on which the poor depend. In addition, developing economies with high concentrations of their populations on fragile lands and in remote areas not only display high rates of rural poverty, but also are some of the poorest countries in the world today. Policies to eradicate poverty therefore need to be targeted at the poor where they live, especially the rural poor clustered in fragile environments and remote areas. The specific elements of such a strategy include involving the poor in payment for ecosystem services schemes and other measures that enhance the environments on which the poor depend; targeting investments directly to improving the livelihoods of the rural poor, thus reducing their dependence on exploiting environmental resources; tackling the lack of access of the rural poor in less favored areas to well-functioning and affordable markets for credit, insurance, and land; and reducing the high transportation and transaction costs that prohibit the poorest households in remote areas from engaging in off-farm employment and limit smallholder participation in national and global markets.
    Keywords: Environmental Economics&Policies,Rural Poverty Reduction,Regional Economic Development,Banks&Banking Reform
    Date: 2012–10–01
  8. By: Gonzalex-Ramirez, Jimena; Kling, Catherine Louise; valcu, adriana
    Keywords: GHGs; carbon policy; conservation practices; carbon supply curves; additionality; leakage
    JEL: Q R
    Date: 2012–10–18
  9. By: Todd Schoellman (Arizona State University); Berthold Herrendorf (Arizona State University)
    Abstract: It is well known that poor countries are much less productive in agriculture than in the rest of the economy, and that it is hard to account for these productivity gaps. In this paper, we study US states during 1980–2009. We find that there are large productivity gaps between agriculture and non–agriculture. These productivity gaps are not at all accounted for by gaps in real wages per efficiency unit, which are similar in the two sectors. Instead, they are accounted for by two key factors: human capital is much higher in non–agriculture; and value added is seriously mis–measured in agriculture.
    Date: 2012
  10. By: Xiong, Bo; Beghin, John C.
    Abstract: Maximum Residue Limits (MRLs) on pesticides and veterinary drugs in plant and animal products are established to promote food safety and animal and plant health. In practice, however, they are often accused of creating unnecessary trade barriers. The controversy is more prominent when a given MRL is stricter than the corresponding international standard developed by Codex. Using the score indices constructed by Li and Beghin (2012), we empirically assess the implications of stringency in MRLs in plant and animal products, relative to Codex levels, for Canadian and U.S. trade performance. We find little evidence that U.S. imports are influenced by domestic stringency or those imposed by its trading partners. However, U.S. exports are negatively affected by stringency in destination markets.  Canada’s stringent MRLs facilitate its exports of plant and animal products and these exports do not seem to be impeded by MRL stringency in destination markets. Canada’s imports do not appear to be systematically influenced by either its own or its trading partners’ MRL stringency. We draw implications for the potential harmonization of MRLs between the two countries.
    Keywords: Maximum residue limit; MRL; standard; protectionism; Non-tariff measures; competitiveness; Canada; non-tariff barriers; gravity; US
    JEL: F13 Q17 Q18
    Date: 2012–10–21
  11. By: Irina Starodubrovskaya (Gaidar Institute for Economic Policy); Nina Mironova (Gaidar Institute for Economic Policy)
    Abstract: This publication addresses theoretical and practical aspects of rural life in Russia. The authors developed approaches to enhance rural evelopment in the framework of regional managerial strategies. Operation of the institutions of local development in Arhkangelsk oblast and the Republic of Karelia are investigated. Objective preconditions, constraints, institutional circumstances and the most preferable mechanisms of ensuring development on various types of rural territories are studied. The influence of municipal reform on all these issues is also demonstrated.
    Keywords: Rural Development, Municipal Reform, Russia
    JEL: H30 K10 R00
    Date: 2012
  12. By: Rollo, Valentina
    Abstract: . This paper uses firm-level data to study the pricing-behavior of Tanzanian exporters. The important question of how exporting firms make pricing decisions has not received significant attention in the trade literature, which is more focused on factors that determine export flows. The results of the paper show that the free on board price of Tanzanian exports is differentiated both across exporters -- within product-destination pairs -- and across markets -- within firm-product pairs. Moreover, contrasting with existing evidence, price differentiation across destinations seems to be mainly relevant for homogenous goods. This result could indicate either that goods classified as homogeneous can potentially be differentiated by their intrinsic quality (such as coffee), or that firms charge different mark-ups in different markets. Although further work is needed to confirm what leads to price dispersion, allowing for the possibility that food products can be vertically differentiable amplifies the spectrum of existing opportunities for developing countries to exploit product differentiation and market niches. The study also discusses the implications of the empirical findings in light of the predictions of price and quality competition models, but finds that the results cannot be explained by a single trade model of quality or price competition.
    Keywords: Markets and Market Access,Economic Theory&Research,Access to Markets,Commodities,Emerging Markets
    Date: 2012–10–01
  13. By: Anthony J. Glass (School of Business and Economics, Loughborough University, UK); Karligash Kenjegalieva (School of Business and Economics, Loughborough University, UK); Robin Sickles (Department of Economics, Rice University, Houston, United States)
    Abstract: It is common in firm level environmental efficiency studies for pollution to form part of the production technology. We omit nitrogen and sulphur emissions from the spatial analysis of production in European countries (1995 - 2008) because we find they are not significant inputs. Efficiency and TFP growth from the production analysis are then used in second stage spatial models of nitrogen and sulphur emissions in European countries. We find that to cut European sulphur emissions by a certain percentage requires a decrease in a composite measure of a country’s efficiency and TFP growth which is more than double the decrease needed to reduce European nitrogen emissions by the same percentage.
    Keywords: TFP Growth; Atmospheric Pollution; Spatial Econometrics; Economic Efficiency
    JEL: C23 D24 Q53
    Date: 2012–10
  14. By: Kudo, Yuya
    Abstract: In a traditional system of exogamous and patrilocal marriage prevalent in much of Sub-Saharan Africa, when she marries, a rural woman typically leaves her kin to reside with her husband living outside her natal village. Since a village that allows a widow to inherit her late husband's land can provide her with old age security, single females living outside the village are more likely to marry into the village. Using a natural experimental setting, provided by the longitudinal household panel data drawn from rural Tanzania for the period from 1991 to 2004, during which several villages that initially banned a widow's land inheritance removed this discrimination, this study provides evidence in support of this view, whereby altering a customary land inheritance rules in a village in favor of widows increased the probability of males marrying in that village. This finding suggests that providing rural women with old age protection (e.g., insurance, livelihood protection) has remarkable spatial and temporal welfare effects by influencing their decision to marry.
    Keywords: Tanzania, Social security, Women welfare, Land tenure, Aged, Migration, Demography, Gender empowerment, Land ownership, Social custom, Widowhood
    JEL: J12 J14 K11 Q15 R23
    Date: 2012–09
  15. By: Beghin, John C.; Disdier, Anne-Celia; Marette, Stephan
    Abstract: We extend the trade restrictiveness indices (TRIs) approach to the case of market failures and domestic regulations addressing them, in presence of arbitrary tariffs and other domestic price policy distortions. We focus on standard-like non-tariff measures (NTMs) affecting cost of production and potentially enhancing domestic demand by increasing product quality or reducing negative externalities. The impact of NTMs on trade is ambiguous depending on the relative strength of the supply cost and demand enhancing effects. We apply the framework to the NTM database of Kee, Nicita, and Olarreaga (2009) and derive ad valorem equivalents for NTMs and other policy distortions. These equivalents are then used to compute TRIs. 10% of the NTM ad valorem equivalents at the 6-digit level of the Harmonized System are negative indicating a net trade-enhancing effect of these NTMs in those sectors. Consequently, TRIs computed without a protectionist presumption are smaller than their constrained counterparts not allowing for trade enhancements effects of NTMs. Accounting for externalities and anti-protective effects significantly reduces the measure of trade policy restrictiveness for most countries.
    Keywords: Non-tariff measures; externalities; ad valorem equivalents; trade restrictiveness indices
    JEL: F13
    Date: 2012–10–18
  16. By: Dercon, Stefan
    Abstract: The developing world is experiencing substantial environmental change, and climate change is likely to accelerate these processes in the coming decades. Due to their initial poverty, and their relatively high dependence on environmental capital for their livelihoods, the poor are likely to suffer most due to their low resources for mitigation and investment in adaptation. Economic growth is essential for any large-scale poverty reduction. Green growth, a growth process that is sensitive to environmental and climate change concerns, is often seen to be particularly helpful in this respect, leading to a win-win in growth and poverty reduction terms, with additional gains for the cause of greening the planet and avoiding further disastrous environmental change. This paper argues that such a view ignores important trade-offs in the nature of"green growth"strategies, stemming from a poor understanding of the sector and spatial processes behind effective poverty reduction. High labor intensity, declining shares of agriculture in gross domestic product and employment, migration, and urbanization are essential features of poverty-reducing growth. The paper contrasts some common and stylized green-sensitive growth ideas related to agriculture, trade, technology, infrastructure, and urban development with the requirements of poverty-sensitive growth. It finds that they may well cause a slow-down in the effectiveness of growth in reducing poverty. The main lesson therefore is that trade-offs are bound to exist; they increase the social costs of green growth and should be explicitly addressed. If not, green growth may not be good for the poor and the poor should not be asked to pay the price for sustaining growth while greening the planet.
    Keywords: Environmental Economics&Policies,Rural Poverty Reduction,Achieving Shared Growth,Economic Theory&Research,Climate Change Economics
    Date: 2012–10–01
  17. By: Tomasz Gerard Czekaj (Institute of Food and Resource Economics, University of Copenhagen); Arne Henningsen (Institute of Food and Resource Economics, University of Copenhagen)
    Abstract: We investigate and compare the suitability of parametric and non-parametric stochastic regression methods for analysing production technologies and the optimal firm size. Our theoretical analysis shows that the most commonly used functional forms in empirical production analysis, Cobb-Douglas and Translog, are unsuitable for analysing the optimal firm size. We show that the Translog functional form implies an implausible linear relationship between the (logarithmic) firm size and the elasticity of scale, where the slope is artificially related to the substitutability between the inputs. The practical applicability of the parametric and non-parametric regression methods is scrutinised and compared by an empirical example: we analyse the production technology and investigate the optimal size of Polish crop farms based on a firm-level balanced panel data set. A nonparametric specification test rejects both the Cobb-Douglas and the Translog functional form, while a recently developed nonparametric kernel regression method with a fully nonparametric panel data specification delivers plausible results. On average, the nonparametric regression results are similar to results that are obtained from the parametric estimates, although many individual results differ considerably. Moreover, the results from the parametric estimations even lead to incorrect conclusions regarding the technology and the optimal firm size.
    Keywords: production technology, nonparametric econometrics, panel data, Translog, firm size, Polish crop farms
    JEL: C14 C23 D24 Q12
    Date: 2012–10
  18. By: Manuel González-Gómez; Marcos Alvarez-Díaz; Mª Soledad Otero-Giraldez
    Abstract: Using annual data, we have estimated the timber harvest of eucalyptus in the region of Galicia (Spain). The explanatory variables considered were price, pulp exports, and salvage timber. The latter variable was used as a proxy for forest fires. The problems related to spurious regression were addressed by applying the bounds testing approach to cointegration, and confidence intervals were constructed using the bootstrap technique. The results indicate that pulp exports have a positive effect on the harvested timber volume. Moreover, we find that salvage timber positively affects the timber supply. This result indicates that there is no substitution between salvage timber and non-damaged timber. It also suggests that the natural expansion of the eucalyptus in Galicia compensates for the destruction caused by forest fires, avoiding supply shortages. On the other hand, and according to the economic law of supply, the timber price shows a negative effect.
    Keywords: eucalyptus, forest fires, cointegration, ARDL, bootstrap
    Date: 2012–09
  19. By: Koundouri, Phoebe; Remoundou, Kyriaki
    Abstract: This book aims to show that economics in general and non market valuation methods in particular, together with participatory and engineering tools, can facilitate the design and implementation of the different European policies in relation to mitigation of water stress. The results presented in this book derive from AquaStress, an EU funded integrated project, delivering interdisciplinary methodologies to help mitigate water stress problems. The project draws on both academic and practitioner skills to generate knowledge in technological, operational management, policy, socio-economic, and environmental domains. The book is divided in three parts and as the AquaStress project, is case study driven. Part I begins with a review of the up-to-date use of non-market valuation economic methods in the design and implementation of EU water policies. Part II of the book proceeds to discuss and analyze participatory and engineering tools that can facilitate the determination of efficient water resources policies and the consequent implementation of the EU WFD, using case studies of test sites from Bulgaria, Italy, Morocco and Poland. Part III of the book, brings us back to the use of economic tools and focuses on policy appraisal through social cost-benefit analyses and the choice/estimation of the socially efficient discount rate to be used in such analyses. The book concludes with specific policy recommendations for all case-studies considered in previous chapters. This work would be of most interest to water resources managers and policy makers as well as consultants working on the implementation of the WFD. It would also be helpful to students and scholars of water resource management.
    Keywords: Economic valuation; environmental policy
    JEL: Q5 A13 A12 Q51
    Date: 2011–12–15
  20. By: Gulumser, A.A.; Baycan Levent, T.; Nijkamp, P.; Poot, H.J.
    Date: 2012
  21. By: Diogo, V.; Koomen, E.; Hilst, F. van der
    Date: 2012

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