nep-agr New Economics Papers
on Agricultural Economics
Issue of 2012‒11‒17
twenty papers chosen by
Angelo Zago
University of Verona

  1. Implications of Agricultural Productivity for Global Cropland Use and GHG Emissions: Borlaug vs. Jevons By Hertel, Thomas
  2. SIMPLE: a Simplified International Model of agricultural Prices, Land use and the Environment By Baldos, Uris Lantz; Thomas Hertel
  3. A Framework for Sustainable Food Security for Latin America and the Caribbean By César Falconi; Máximo Torero; Eduardo Maruyama; Manuel Hernández; Miguel Robles
  4. Risk Management Instruments for Food Price Volatility and Weather Risk in Latin America and the Caribbean: The Use of Risk Management Instruments By Anne G. Murphy; Jason Hartell; Víctor Cárdenas; Jerry R. Skees
  5. Risk as Impediment to Privatization? The Role of Collective Fields in Extended Agricultural Households By Matthieu Delpierre; Catherine Guirkinger; Jean-Philippe Platteau
  6. Urban sprawl occurrence under spatially varying agricultural bid-rent and amenities By Thomas Coisnon; Walid OUESLATI; Julien Salanié
  7. The adoption of innovative cropping systems under price and production risks: a dynamic model of crop rotation choice By Aude Ridier; Karim Chaib; Caroline Roussy
  8. Explaining the Emergence of Private Standards in Food Supply Chains By Eric Giraud-Héraud; Cristina Grazia; Abdelhakim Hammoudi
  9. Learning through Noticing: Theory and Experimental Evidence in Farming By Hanna, Rema; Mullainathan, Sendhil; Schwartzstein, Joshua
  10. Individual Attitudes on Food Quality and Safety: Empirical Evidence on EU Countries By Donatella Baiardi; Riccardo Puglisi; Simona Scabrosetti
  11. Getting the Most for Federal Dollars: Landowner Responsiveness to Conservation Incentives By James Manley; Jason Mathias
  12. How do GM / non GM coexistence regulations affect markets and welfare? By Desquilbet, Marion; Poret, Sylvaine
  13. An analysis of the metabolic patterns of two rural communities affected by soy expansion in the North of Argentina By Nancy Arizpe; Jesus Ramos-Martin; Mario Giampietro
  14. On the Origins of Land Use Regulations: Theory and Evidence from US Metro Areas By Hilber, Christian A. L.; Robert-Nicoud, Frédéric
  15. Biodiversity Conservation and Ecosystem Services Provision: Tale of Confused Objectives, Multiple Market Failures and Policy Challenges By Coria, Jessica; Robinson, Elizabeth; Smith, Henrik G.; Sterner, Thomas
  16. My body is fat and my wallet is thin: The link between weight perceptions, weight control and income By Johnston, D.W.;; Lordan, G.;
  17. Loan Regulation and Child Labor in Rural India By Dasgupta, Basab; Zimmermann, Christian
  18. A Comment on the Environment and Directed Technical Change By Mads Greaker and Tom-Reiel Heggedal
  19. The social welfare function of forests in the light of the theory of public goods By Seregi, János; Lelovics, Zsuzsanna; Balogh, László
  20. Price as a signal of product quality: Some experimental evidence By Giovanni Mastrobuoni; Franco Peracchi; Aleksey Tetenov

  1. By: Hertel, Thomas
    Abstract: This paper introduces a general framework for analyzing the impacts of regional and global technological change on long run agricultural output, prices, land rents, land use, and associated GHG emissions. In so doing, it facilitates a reconciliation of the apparently conflicting views of the impacts of agricultural productivity growth on global GHG emissions and environmental quality. As has been previously recognized, in the case of a global change in farm productivity, the critical condition for an innovation to lead to diminished land use is that the farm level demand for agricultural products is inelastic. However, in the more common case where the innovation is regional in nature, the necessary condition for a reduction in global land use and associated GHG emissions is more complex and depends on the relative yields, emissions efficiencies and supply conditions in the affected and unaffected regions. While innovations in agricultural are most common land-sparing at global scale, innovations in regions commanding a small share of global production, with relatively low yields, high land supply elasticities and low emissions efficiencies can lead to an increase in global land use change emissions. A numerical example illustrates these points and suggests that these conditions may hold for productivity shocks in Latin America and Sub-Saharan Africa. These insights are also relevant for the emerging literature on the effect of adverse climate change on global agriculture and associated emissions from land use change.
    Date: 2012
  2. By: Baldos, Uris Lantz; Thomas Hertel
    Abstract: In this paper, we document the Simplified International Model of agricultural Prices, Land use and the Environment (SIMPLE). SIMPLE is a partial equilibrium model which is designed to better understand the competing forces that influence the global farm and food system and how these drivers influence long run agricultural land use, production, prices, GHG emissions and food consumption. SIMPLE has been developed under the principle that a model should be no more complex than is absolutely necessary to understand the basic forces at work. Therefore, unlike other global models which are generally more complex and disaggregated, SIMPLE is parsimonious and tractable. Indeed, our historical validation over the period 1961-2006 confirms that SIMPLE can be used to simulate the long run changes in the global farm and food system given exogenous shocks in a few key drivers of world agriculture. Equally important is that we demonstrated how SIMPLE can be used to assess the relative contribution of each of the individual drivers to the endogenous changes in world agriculture via the numerical and the analytical decomposition tools. With these tools at hand, SIMPLE offers a more robust analysis of both historical and future long run changes in the global farm and food system.
    Date: 2012
  3. By: César Falconi; Máximo Torero; Eduardo Maruyama; Manuel Hernández; Miguel Robles
    Abstract: This Technical Note presents a framework for food security in LAC that takes into consideration the key drivers and external factors behind food security. This framework for food security policy interventions will guide policymakers and analysts in answering the following questions: i) Which are the top priority interventions needed to provide a more focused approach to food security aimed specifically at dealing with the issues that are impeding LAC's capacity to reduce the impacts of the food crisis on its population and at helping to solve the food crisis, given the region's comparative advantages in agriculture; ii) What is the net impact of policy interventions across households in the region, taking into consideration environment and climate change, water management, trade liberalization, and domestic food prices; and iii) How does a specific policy intervention compare to other policy interventions with respect to net impact on food security, other positive impacts, and net intervention costs?
    Keywords: Agriculture & Food Security :: Plant, Animal, & Food Production, Publication, Food Security, Agriculture, Policy Interventions, Policy Evaluation Tool
    JEL: Q18 N56 O13
    Date: 2012–09
  4. By: Anne G. Murphy; Jason Hartell; Víctor Cárdenas; Jerry R. Skees
    Abstract: This report examines some of the implications of price risk and volatility, and weather risks in the LAC region that are important threats to already vulnerable populations. It considers the advantages and limitations of a set of financial instruments for managing these risks; and identifies potential mechanisms for addressing concerns about the socioeconomic consequences of price and weather volatility. In reviewing the innovations that are being tested in the LAC region and around the world, what is striking is that they appear to be disparate and largely piecemeal solutions to the problems of price and natural disaster risk management - they are not integrated. A more efficient and holistic solution should draw upon the recent efforts of coordination among countries within regions. The importance of risk aggregation and pooling combined with the comparative advantage of International Financial Institutions to access capital and work in a regional context, suggests a strategy to develop a fully multicountry approach to risk management. This strategy calls for establishing a Regional Asset Management Platform (RAMP) that integrates central stakeholders and develops pricing and measurement tools for extreme weather risk management and price volatility in a more efficient fashion. Global drivers of price volatility for major commodities can be managed using international futures exchange markets to some extent. However, regional climate anomalies will also mean that individual countries can suffer price volatility that represents a basis risks when using international futures markets. Thus, combining risk transfer products for regional climate anomalies with the use of careful hedging strategies for global volatility may offer better risk management strategies for either lower than expected prices that adversely affect producers or higher than expected prices that adversely affect consumers.
    Keywords: Environment & Natural Resources :: Disasters, Financial Sector :: Financial Markets, Financial Sector :: Financial Risk, Agriculture & Food Security :: Plant, Animal, & Food Production, Commodity price risk, weather index insurance, agriculture, food security
    Date: 2012–09
  5. By: Matthieu Delpierre (University of Louvain); Catherine Guirkinger (Center for Research in the Economics of Development, University of Namur); Jean-Philippe Platteau (Center for Research in the Economics of Development, University of Namur)
    Abstract: As in the case of agricultural cooperatives, collective fields in extended agricultural households act as an insurance device, by redistributing income between household members. At the same time they entail inefficiencies arising from the incentives to free ride on co-workers efforts. Privatization solves the latter problem but comes at a cost of lower risk-sharing (Carter, 1987). The classic analysis of the trade-off between efficiency and risk-sharing rules out another major risk-sharing mechanism, namely voluntary interpersonal transfers. This paper is a first attempt to merge the two insurance mechanisms: collective production, which is plagued by free riding and income transfers, which are hampered by limited commitment. Privatization of land is shown to interact with incentives to abide by the insurance agreement, so that the tradeoff between risk-sharing and production efficiency may or may not be maintained with income transfers. We show that an increase in the value of the household members’ exit option or a decrease in patience decreases the optimal rate of privatization. With the help of numerical simulations we argue that households of greater size are also more likely to privatize land.
    Keywords: risk-sharing, land, family, privatization
    JEL: D13 O12 Q12 Q15
    Date: 2012–11
  6. By: Thomas Coisnon (Granem - Groupe de Recherche ANgevin en Economie et Management - Agrocampus Ouest - INRA : UMR49); Walid OUESLATI (UMR GRANEM - UMR MA 49 – Université d'Angers et Agrocampus Ouest - Université d'Angers); Julien Salanié (Granem - Groupe de Recherche ANgevin en Economie et Management - Agrocampus Ouest - INRA : UMR49)
    Abstract: This paper presents a spatially explicit model to examine the importance of agricultural amenities as a determinant of the urban and suburban spatial structure. By introducing endogenous agricultural amenities into the classical monocentric model, we provide an intuitive explanation of leapfrog development. We show how urban development patterns highly depend on the intensity of surrounding farms and their ability to produce amenities. We also show that, even in absence of a particular landscape feature or any exogenous source of amenities, fragmented urban sprawl is a natural development pattern for a city surrounded by a spatially varying agricultural environment. Finally, we show how land tax policies could curb urban sprawl under certain conditions on households' preferences and farming.
    Keywords: Etalement urbain; rente; agriculture; aménités; modèle monocentrique
    Date: 2012–09–28
  7. By: Aude Ridier; Karim Chaib; Caroline Roussy
    Abstract: We investigate the role played by both production and market risks on farmers’ decision to adopt long rotations considered as innovative cropping systems. We build a multi-period dynamic farm model which arbitrates each year between conventional and innovative rotations. With discrete stochastic programming, the production risk is accounted for as an intra-year risk, yearly farming operations being declined according to a decision tree where probabilities are assigned. The simulations for a sample of 13 farmers who are currently experimenting this innovation in south-western France, show that substantive sunk costs act as incentives to remain in the long rotation when the farmer is supported for his engagement. They also show that both a high risk aversion and a highly positive market trend tend to slow down the conversion towards innovative systems.
    Keywords: innovative cropping systems, dynamic model, crop rotation decision, risk, subjective probabilities
    JEL: C61 D0 Q12 Q55
    Date: 2012
  8. By: Eric Giraud-Héraud (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, Institut National de la Recherche Agronomique - INRA); Cristina Grazia (Agricultural Economics and Engineering Department - University of Bologna); Abdelhakim Hammoudi (Institut National de la Recherche Agronomique - INRA)
    Abstract: This paper provides an original theoretical framework to better understand the raise of private standards in agrifood chains. Reasons for the emergence and conditions for the effectiveness of private standards are identified, by investigating retailers' strategic behaviour and, more precisely, both interactions among retailers and upstream producers and the role of consumer behaviour vis-àvis the food safety risk. We show that a relatively strict Minimum Quality Standard (MQS) may incentive the retailer to develop an even more demanding private standard, when market-driven incentive is relatively high; this result crucially depends on consumer risk misperception. Setting a private standard may improve market access for upstream producers. In addition, it may reduce food safety risk and, at the same time, improve consumer surplus.
    Keywords: Private standards, vertical relationships, risk misperception
    Date: 2012–11–07
  9. By: Hanna, Rema (Harvard University); Mullainathan, Sendhil (Harvard University); Schwartzstein, Joshua (Dartmouth College)
    Abstract: Existing learning models attribute failures to learn to a lack of data. We model a different barrier. Given the large number of dimensions one could focus on when using a technology, people may fail to learn because they failed to notice important features of the data they possess. We conduct a field experiment with seaweed farmers to test a model of "learning through noticing." We find evidence of a failure to notice: On some dimensions, farmers do not even know the value of their own input. Interestingly, trials show that these dimensions are the ones that farmers fail to optimize. Furthermore, consistent with the model, we find that simply having access to the experimental data does not induce learning. Instead, farmers change behavior only when presented with summaries that highlight the overlooked dimensions. We also draw out the implications of learning through noticing for technology adoption, agricultural extension, and the meaning of human capital.
    Date: 2012–10
  10. By: Donatella Baiardi (Department of Economics and Management, University of Pavia); Riccardo Puglisi (Department of Political and Social Sciences, University of Pavia); Simona Scabrosetti (Department of Law, University of Pavia)
    Abstract: What are the determinants of individual attitudes on food? Focusing on EU citizens, we provide a first systematic answer to this question by using the 2010 Eurobarometer Special Survey on risk perception. Since respondents are asked about various features of food consumption, we check to what extent a specific demographic or socio-economic variable is differentially correlated with those features. We find that women show an higher risk aversion than men, given their attention on freshness, calories and safety. The same holds for more educated, higher income individuals and respondents living with children. Occupational status does not play a relevant role in food preferences, except for prices. We deal with potential response bias by using as dependent variable the difference between each response on a given food attribute and the average response on the other ones. We also perform a principal component analysis to identify the underlying patterns which drive individual responses.
    Keywords: individual attitudes; food safety; food quality; Eurobarometer 73.5 Special Survey on Risk Perception
    JEL: I18 Q18 K32
    Date: 2012–11
  11. By: James Manley (Department of Economics, Towson University); Jason Mathias
    Abstract: Previous research on landowner willingness to retire land into the Conservation Reserve Program (CRP) is based on cross-sectional data prior to 2002. Using enrollment data on a CRP subprogram from 1998 to 2010 we find that incentives matter more for pasture than cropland, and we find that counties producing cattle respond more strongly to current incentives. We also see an idiosyncratic lack of participation in Washington State. Finally, contrary to one recent study, we see that the discounted stream of payments matters to producers as much as up-front incentives. In counties producing few cattle, up-front incentives have virtually no effect.
    Keywords: Conservation Reserve Program, Conservation Reserve Enhancement Program, agricultural economics, landowner incentives, subsidy response, agricultural policy.
    JEL: H23 Q15 Q24 Q58
    Date: 2012–11
  12. By: Desquilbet, Marion (TSE (INRA,GREMAQ)); Poret, Sylvaine (Polytechnique(INRA))
    Abstract: This paper presents a theoretical economic model assessing the effects of the level of mandatory genetically modified (GM) / non-GM coexistence regulations on market and welfare outcomes. We assume vertical differentiation of GM and non-GM goods on the consumer side. Producers are heterogeneous in their production cost for GM crops. Producers of non- GM crops face a probability of having their harvest downgraded if gene flow from GM fields raises its content in GMOs (genetically modified organisms) above the labeling threshold. The government may impose on GMO producers mandatory ex ante isolation distances from non- GM fields in order to decrease the probability of non-GM harvest downgrading. It may also introduce an ex post compensation to non-GMO farmers for profit losses due to harvest downgrading, imposing GMO farmers’ participation to a compensation fund via a tax on GM seeds. Assuming endogenous crop choices and prices, we study the effects of ex ante regulation and ex post liability of GMO producers on market equilibrium, on the achievement of coexistence, and on both global and interest group welfare.
    Keywords: genetically modified organisms, coexistence, identity preservation, regulation, liability, vertical differentiation, law and economics.
    JEL: D62 H23 K32 L15
    Date: 2012–11
  13. By: Nancy Arizpe (Institut de Ciencia i Tecnologia Ambientals, Universitat Autònoma de Barcelona); Jesus Ramos-Martin (Departament d'Economia i d'Història Econòmica, Universitat Autònoma de Barcelona); Mario Giampietro (Institut de Ciencia i Tecnologia Ambientals, Universitat Autònoma de Barcelona)
    Abstract: The soy expansion model in Argentina generates structural changes in traditional lifestyles that can be associated with different biophysical and socioeconomic impacts. To explore this issue, we apply an innovative method for integrated assessment - the Multi Scale Integrated Analysis of Societal and Ecosystem Metabolism (MuSIASEM) framework - to characterize two communities in the Chaco Region, Province of Formosa, North of Argentina. These communities have recently experienced the expansion of soy production, altering their economic activity, energy consumption patterns, land use, and human time allocation. The integrated characterization presented in the paper illustrates the differences (biophysical, socioeconomic, and historical) between the two communities that can be associated with different responses. The analysis of the factors behind these differences has important policy implications for the sustainable development of local communities in the area.
    Keywords: Societal metabolism, soy expansion, Chaco, biophysical accounting, rural development, multi-scale integrated analysis
    JEL: D13 J22 O13 O44 Q12 Q57
    Date: 2012–11
  14. By: Hilber, Christian A. L.; Robert-Nicoud, Frédéric
    Abstract: We model residential land use constraints as the outcome of a political economy game between owners of developed and owners of undeveloped land. Land use constraints benefit the former group via increasing property prices but hurt the latter via increasing development costs. In this setting, more desirable locations are more developed and, as a consequence of political economy forces, more regulated. These predictions are consistent with the patterns we uncover at the US metropolitan area level.
    Keywords: housing supply; land ownership; Land use regulations; zoning
    JEL: H7 Q15 R52
    Date: 2012–11
  15. By: Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University); Robinson, Elizabeth (School of Agriculture, Policy, and Development, Reading, and Department of Economics, Gothenburg, Sweden); Smith, Henrik G. (Department of Animal Ecology, Lund); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Most research and funding in conservation has been oriented toward biodiversity per se. Until recently there has been little tangible effort in linking conservation to ecosystem service provision. Nevertheless, this trend seems to be changing due in part to the relative success of payment mechanisms that provide funding for the conservation of ecosystem services – defined as discrete and identifiable end-products. This paper describes the features of optimal policies to protect (i) biodiversity vs. (ii) ecosystem services and analyze to what extent the criteria in (i) and (ii) set against each other or create synergies. We also analyze how payments for ecosystem services affect the relationship between biodiversity and ecosystem services conservation.
    Keywords: Biodiversity conservation; ecosystem services; synergies and trade-offs; environmental policies
    JEL: Q23 Q24 Q28 Q29
    Date: 2012–11–08
  16. By: Johnston, D.W.;; Lordan, G.;
    Abstract: This paper explores why the poor are more likely to be overweight and obese than the rich. The main aim is to better understand the mechanisms underlying the income-obesity relationship so that effective policy interventions can be developed. Our approach involves analysing data on approximately 9,000 overweight British adults from between 1997 and 2002. We estimate the effect of income on the probability that an overweight individual correctly recognises their overweight status and the effect of income on the probability that an overweight individual attempts to lose weight. Our work finds that low-income individuals are more likely to both misperceive that they are a healthy weight and fail to address their unhealthy weight. Both of these effects are higher for males than females. For example, it is estimated that overweight low-income males are 15%-points less likely to recognize their overweight status than overweight high-income males, and that after controlling for weight perceptions, overweight low-income males are 10%-points less likely to be trying to lose weight. An implication of these results is that more public education on what constitutes overweight and the dangers associated with being overweight is needed, especially in low income neighbourhoods.
    Keywords: Obesity, Overweight, Weight Control, Weight Misperceptions
    Date: 2012–09
  17. By: Dasgupta, Basab (World Bank); Zimmermann, Christian (Federal Reserve Bank of St. Louis)
    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: child labor, India, informal lending, lending discrimination, interest rate caps
    JEL: O16 O17 E26
    Date: 2012–10
  18. By: Mads Greaker and Tom-Reiel Heggedal (Statistics Norway)
    Abstract: The major claim in Acemoglu, Aghion, Bursztyn & Hemous (2012) (AABH) is that subsidies for research and development of clean technologies are more important than carbon taxes when dealing with climate change. However, they – unconventionally – assume that a patent only lasts for one period. In this note we introduce long-lived patents into the AABH model. This makes the role of a research subsidy for clean technologies in AABH far less crucial and reestablishes the role of the carbon tax. This is good news as it is far easier to tax emissions than to pick the right technologies to subsidize.
    Keywords: Environment; directed technological change; innovation policy
    JEL: O30 O31 O33
    Date: 2012–11
  19. By: Seregi, János; Lelovics, Zsuzsanna; Balogh, László
    Abstract: Differentiation between public and private goods is very complex and difficult. In this article, authors overview these definitions and also the theories about private and public goods to apply this knowledge in the determination of the social welfare functions of forests, the utilization and the tasks of the government. The welfare functions of forests, the tasks of the owner and also the way of utilization of the forest is differing between public and private forests. This overview can help to determine these functions and tasks and also find the best ways of utilization. --
    Keywords: Social welfare,Private and public goods,Government
    Date: 2012
  20. By: Giovanni Mastrobuoni (Collegio Carlo Alberto and CeRP); Franco Peracchi (Tor Vergata University and EIEF); Aleksey Tetenov (Collegio Carlo Alberto)
    Abstract: We separate the budgetary and non-budgetary effects of price on demand using choice data from wine tasting experiments in which consumers tasted wines of different quality accompanied by fictitious price information. The non-budgetary effect is present and nonlinear: it is strongly positive between 3 and 5 euro, and undetectable between 5 and 8 euro. We find a similar nonlinear price-quality relationship in a large sample of wine ratings from the same price segment, supporting the hypothesis that consumer behavior in the experiment is consistent with rationally using prices as signals of quality. Price signals also have greater importance for inexperienced (young) consumers.
    Date: 2012

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