nep-agr New Economics Papers
on Agricultural Economics
Issue of 2013‒09‒24
twenty-two papers chosen by
Angelo Zago
University of Verona

  1. Russian Agriculture and Agricultural Policies in 2012 By Natalia Karlova; Natalia Shagaida; Vasily Uzun; Renata Yanbykh
  2. Structural Changes in Commodity Prices: The Role of Policies By DeGorter, Harry; Just, David; Mugera, Harriet Kasidi
  3. Migration and Agricultural Efficiency - Empirical Evidence for Kosovo By Sauer, Johannes; Gorton, Matthew; Davidova, Sophia
  4. Labelling of agricultural and food products of mountain farming By Fabien Santini; Fatmir Guri; Sergio Gomez y Paloma
  5. How distance and different areas of cultivation determine European food and agricultural trade flows By Dreyer, Heiko
  6. Legal principles of managing agricultural lands in Poland and their impact on changes in the agrarian structure By Suchon, Aneta Anna
  7. The economics of federal food programs: Weighing the costs and benefits - Executive Summary By Kinsey, Jean
  8. Volatility linkages between energy and agricultural commodity prices By Brenda López Cabrera,; Franziska Schulz,; ;
  9. Carbon Taxes, Agricultural Competitiveness and Trade By Nicholas Rivers; Brandon Schaufele
  10. Smallholder Farmers Participation in Livestock Market in Zambia By Lubungu, Mary; Chapoto, Antony; Tembo, Gelson
  11. An Analysis of the Demand for Fresh Fruit in Scotland By Revoredo-Giha, Cesar; Florkowski, Wojciech J.
  12. The Application of the Minimum Food Security Quota (MFS-Quota): Malaysia By Ruiz Estrada, Mario Arturo
  13. Forecasting Profitability By Mark Rosenzweig; Christopher R. Udry
  14. Individual Decisions or Institutional Dynamics? Reasons for the Intensive Use of Fertilizer in Eastern China By Berger, Lars; Huettel, Silke; Hagedorn, Konrad
  15. Export Restrictions and Multiple Spatial Price Equilibria: Export Quotas for Wheat in Ukraine By Götz, Linde; Qiu, Feng; Gervais, Jean-Philippe; Glauben, Thomas
  16. Have food and financial markets integrated? An empirical assessment on aggregate data By Lehecka, Georg
  17. Ecosystem damages in integrated assessment models of climate change By Wesley R. Brooks; Stephen C. Newbold
  18. RFS Compliance Costs and Incentives to Invest in Ethanol Infrastructure By Bruce A. Babcock
  19. Conquering the EU Market with New Trade Agreements – Issues of Free Trade Agreements Between the EU and Partner Countries By Rau, Marie-Luise
  20. Structural Change in Distribution Markets in Peripheral Europe: Spanish Food Retailing, 1950-2007 By Maixe-Altes, J. Carles; Castro Balaguer, Rafael
  21. Organic Data Network: Harmonising Organic Market Data Collection in Europe By Feldmann, Corinna; Hamm, Ulrich
  22. Land tenure inequality, harvests, and rural conflict ; evidence from Southern Spain in the 1930s. By Jordi Domènech Feliu

  1. By: Natalia Karlova (Gaidar Institute for Economic Policy); Natalia Shagaida (Gaidar Institute for Economic Policy); Vasily Uzun (Gaidar Institute for Economic Policy); Renata Yanbykh (Gaidar Institute for Economic Policy)
    Abstract: At present about 4% of Russia’s GDP is generated in agriculture; however, the sector still accounts for 9.7% of the total number of employed in domestic economy with 26% of the country’s population living in rural areas. The latter indicator has remained actually unchanged throughout the 10 recent years.
    Keywords: Russian economy, agriculture, food market, agricultural policy, Russia's accession to WTO
    JEL: Q13 Q14 Q15 Q16 Q17 Q18
    Date: 2013
  2. By: DeGorter, Harry; Just, David; Mugera, Harriet Kasidi
    Abstract: Food commodity prices have recently increased sharply and become more volatile, highlighting greater uncertainty in markets and serious implications for food security among the poor globally. High fuel prices combined with legislative policies have increased biofuel production causing high food prices and establishing a link between fuel and agricultural prices. This research analyses the role of biofuel, agricultural and energy policies in affecting the relationships between agricultural and energy commodity prices over the last decade. The presence and the nature of structural breaks are empirically. This research finds that structural changes in the prices and price relationships are policy-driven.
    Keywords: Agricultural commodity prices, energy prices, biofuels, policies, structural break analysis, Agricultural and Food Policy,
    Date: 2013
  3. By: Sauer, Johannes; Gorton, Matthew; Davidova, Sophia
    Abstract: Kosovo, like most of rural Central and Eastern Europe, has witnessed substantial out-migration in recent years, prompting debates on the effect of migration on agricultural efficiency. This paper addresses this issue, drawing on a large (n=2217) and representative sample of agricultural households. A two-stage estimation procedure is followed: a frontier technique to estimate the effect of migration on farm efficiency, followed by a matching estimation approach to robustly estimate the sample average effect on efficiency for different levels of migration intensity. Migration has an efficiency decreasing effect which is amplified for better educated and older workers.
    Keywords: Migration, Technical Efficiency, Agricultural Households, Kosovo, Agricultural and Food Policy, Production Economics, Productivity Analysis,
    Date: 2013
  4. By: Fabien Santini (European Commission – JRC - IPTS); Fatmir Guri (European Commission – JRC - IPTS); Sergio Gomez y Paloma (European Commission – JRC - IPTS)
    Abstract: With a view to making the mountain products on the market more clearly identifiable and less misleading for consumers, the EU institutions legislated on a common definition of an optional quality term, 'mountain product', in the labelling of agricultural products. The term 'mountain product' should only be used for products for which the feed and the raw materials come essentially from mountain areas and for which the processing also takes place in mountain areas. The European Commission will adopt implementing acts setting derogations to the general principles of Regulation (EU) No 1151/2012 of the European Parliament and of the Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs in order to take into account the specificities of the different sectors involved. In this context, the present report aims to (i) gather and analyse information on the supply chains for agricultural and food products in mountain areas; (ii) review the possible reasons why citizens, stakeholders and consumers need clarity regarding the provenance of mountain products; and (iii) assess past and present labelling practices for mountain products. Flexibility might be sought in the derogations to the rules governing the term 'mountain product' with regards to the exact place where feed is sourced, to the places where agricultural raw material produced in mountain areas are transformed in further processed goods, to the share of non-mountain ingredients within a mountain processed product that may be considered as acceptable. Means for a proper enforcement of the rules and to ensure coexistence between the new optional quality term 'mountain product' and other existing tools, such as trademarks and geographical indications, should be proposed. In absence of derogations, the applicability the optional quality term 'mountain products' would be impaired.
    Keywords: sustainable agriculture, rural development, CAP, food labelling, quality agricultural products, food supply chain, mountain farming
    JEL: Q13 Q18 R12
    Date: 2013–08
  5. By: Dreyer, Heiko
    Abstract: In this contribution it is argued and empirical proven, complementary to the existing literature, that distance to a trading partner especially in agricultural trade does not only reflect transport costs but also different areas of cultivation. The study accounts for the described patterns by modeling different areas of cultivation. Without doing so the effect of distance would be underestimated.
    Keywords: Food and agricultural trade, distance, growing areas, panel analysis, Germany, gravity approach, International Relations/Trade,
    Date: 2013
  6. By: Suchon, Aneta Anna
    Abstract: The article assesses legal regulations regarding managing agricultural lands in Poland. The paper presents, first of all, the scope of activity of the Agricultural Property Agency, which is a significant institution on the property market. This institution started its activity on 1 January 1992 and its main task was to take over all state agricultural property and to manage the property in compliance with the regulations. Secondly, the article analyzes basic regulations concerning the sale and lease. They both give legal title to organize family as well as large farms. It also presents information about perpetual usufruct. Additionally, the article shows the EU instruments which have an essential impact on changing the agricultural structure, namely structural pensions and bonuses for young farmers.
    Keywords: agricultural lands, agrarian structure, sale, lease, EU funds, Agribusiness, Agricultural Finance, Land Economics/Use,
    Date: 2013
  7. By: Kinsey, Jean
    Keywords: Food Consumption/Nutrition/Food Safety, Food Security and Poverty,
    Date: 2013–01
  8. By: Brenda López Cabrera,; Franziska Schulz,; ;
    Abstract: In this paper we investigate price and volatility risk originating in link- ages between energy and agricultural commodity prices in Germany and study their dynamics over time. We propose an econometric approach to quantify the volatility and correlation risk structure, which has a large impact for in- vestment and hedging strategies of market participants as well as for policy makers. Volatilities and their short and long run linkages (spillovers) are an- alyzed using a dynamic conditional correlation GARCH model as well as a multivariate multiplicative volatility model. Our approach provides a exible and accurate fitting procedure for volatility and correlation risk.
    Keywords: Energy, Agriculture, Biodiesel, Commodities, Interdependencies, Volatility Spillovers
    JEL: G19 G29 G22 Q14 Q49 Q59
    Date: 2013–09
  9. By: Nicholas Rivers (Graduate School for Public and International Affairs, University of Ottawa, Ottawa, ON); Brandon Schaufele (Department of Economics and Institute of the Environment, University of Ottawa, Ottawa ON)
    Abstract: This study evaluates the implications of an actual carbon tax on the international competitiveness of the agricultural sector. Applying uniformly to all fossil fuels combusted within its borders, the province of British Columbia unilaterally introduced a carbon tax on July 1, 2008. Using commodity-specific trade flows and exploiting cross-provincial and inter-temporal variation, we find little evidence that the implementation of the carbon tax is associated with any meaningful effects on agricultural exports despite the sector being singled out as “at risk” by the provincial government. Allowing for heterogeneous responses by commodity, some statistically insignificant negative effects are shown for specific exports. Discussion of potential policy remedies to address the potential impacts of the tax on firm profitability and international competitiveness is also included.
    Keywords: Agricultural trade; British Columbia; carbon tax; competitiveness; unilateral climate policy.
    JEL: H23 Q17 Q5
    Date: 2013
  10. By: Lubungu, Mary; Chapoto, Antony; Tembo, Gelson
    Abstract: This study uses longitudinal household data collected in 2001, 2004, and 2008 to identify factors that influence Zambian smallholder farmers' participation in livestock markets. Although livestock ownership increased during the study period, not all provinces experienced the upward trend. While livestock populations increased in Southern and Central Provinces, they remained stagnant in Eastern, North western and Lusaka Provinces and reduced in Western Province. Not only has herd size remained stagnant over the years, but the level of participation of smallholder farmers in the livestock markets has also remained largely the same. Crop commercialization and participation in off-farm activities reduces the likelihood of participation in cattle markets but not in the markets for small livestock.
    Keywords: Livestock Production/Industries,
    Date: 2013–08
  11. By: Revoredo-Giha, Cesar; Florkowski, Wojciech J.
    Abstract: The purpose of this study is to analyse the demand for fresh fruits in Scotland in order to provide evidence about their sensitivity to changes in prices and income. Six fresh fruit categories were studied using time series for the period 2006 to 2011: citrus, apples and pears, bananas, grapes soft fruit and a residual category, other fruits. The series were constructed from a consumer panel that reports weekly purchases by approximately 1,300 households and which allowed constructing thirteen periods of four weeks each year. The demand for fruits was modelled using a dynamic version of the Almost Ideal Demand System. Short term and long term conditional elasticities (Marshallian, Hicksian and expenditure) were estimated. The results from the long term elasticities indicated the demand for all the categories were sensitive to changes in prices. Grapes and soft fruits were most price elastic fruits. In addition, whilst all the expenditure elasticities were positive, the elasticity of citrus was greater than one, apple and pears, bananas and grapes were approximately one and soft fruit and other fresh fruits were less than one.
    Keywords: Fresh fruits, Demand analysis, Scotland., Demand and Price Analysis, Food Consumption/Nutrition/Food Safety,
    Date: 2013–07–09
  12. By: Ruiz Estrada, Mario Arturo
    Abstract: This paper proposes the uses of the Minimum Food Security Quota (MFS-Quota) by Ruiz Estrada (2010). Consequently, the MFS-Quota was applied on the case of Malaysia. The main objective of the MFS-Quota is to calculate the approximate amount of annual food storage that any country needs to prepare for a potential natural disaster or social conflict. Moreover, any country is able to build its own MFS-Quota according to their agriculture production system(s) and its food national policy focus respectively.
    Keywords: Food security; economic development; Malaysia
    JEL: B40
    Date: 2013–09–15
  13. By: Mark Rosenzweig; Christopher R. Udry
    Abstract: We use newly-available Indian panel data to estimate how the returns to planting-stage investments vary by rainfall realizations. We show that the forecasts significantly affect farmer investment decisions and that these responses account for a substantial fraction of the inter-annual variability in planting-stage investments, that the skill of the forecasts varies across areas of India, and that farmers respond more strongly to the forecast where there is more forecast skill and not at all when there is no skill. We show, using an IV strategy in which the Indian government forecast of monsoon rainfall serves as the main instrument, that the return to agricultural investment depends substantially on the conditions under which it is estimated. Using the full rainfall distribution and our profit function estimates, we find that Indian farmers on average under-invest, by a factor of three, when we compare actual levels of investments to the optimal investment level that maximizes expected profits. Farmers who use skilled forecasts have increased average profit levels but also have more variable profits compared with farmers without access to forecasts. Even modest improvements in forecast skill would substantially increase average profits.
    JEL: D24 D81 O12 O13 Q12 Q54
    Date: 2013–08
  14. By: Berger, Lars; Huettel, Silke; Hagedorn, Konrad
    Abstract: The eutrophication of Lake Tai in the mid-east of China caused by an excessive import of nutrients from agricultural non-point-source pollution impedes social and economic development. In our research we aim to improve the understanding of the farmers’ decision-making process applying chemical fertilizers. Based on data gained in household interviews in 2011 and 2012 we follow the question: Which factors influence the individual decision on the use of fertilizers? Our approach is twofold: first, we estimate a production function to assess nitrogen overuse. Second, based on qualitative data we analyse the influence of the institutional context on individual decision-making.
    Keywords: non-point source pollution, farm-level decision-making, institutional analysis, China, Environmental Economics and Policy, Institutional and Behavioral Economics, Resource /Energy Economics and Policy,
    Date: 2013
  15. By: Götz, Linde; Qiu, Feng; Gervais, Jean-Philippe; Glauben, Thomas
    Abstract: Only few models exist which allow for a regime-dependent spatial price equilibrium. This paper focuses on the price insulating effects of export restrictions. Theory suggests that export restrictions lead to multiple spatial equilibria between the domestic and the world market price. Our analysis is unique in testing for linear versus non-linear cointegration within a smooth transition cointegration model. The application to the wheat export quota in Ukraine shows that the domestic wheat price was stabilized about 30% below the international wheat price during the two recent price booms. From a global point of view, the domestic wheat price in Ukraine would have increased to the same degree, if no country had engaged in price insulating behaviour 2006-2008 worldwide.
    Keywords: Export restrictions, multiple spatial price equilibria, non-linear cointegration, Ukraine, Agricultural and Food Policy, Food Security and Poverty,
    Date: 2013
  16. By: Lehecka, Georg
    Abstract: This paper analyzes co-movements and discusses possible market integration between aggregate food and stock markets in the period of 1990 to 2012. Correlations, price return distributions, cointegration, and Granger-causalities are tested in subsamples on monthly FAO Food Price Index and MSCI World Stock Market Index data to better assess why and whether linkages between food and financial markets have increased. Empirical results suggest that while there is only weak indication of greater co-movements concurrent with structural changes such as changed agricultural policies, new demand due to growth in emerging markets and energy mandates, and the financialization of food markets since the early 2000s, they did start to increase in particular substantially during the financial stress of the Lehman crisis and the Great Recession. It is concluded that while structural changes may have amplified price linkages across markets, results do not suggest that they are the key factors for greater price co-movements. Instead, it is discussed that the effects of the late-2000s recession as a time of great economic weakness and uncertainty may have changed concurrently the behavior of both food and financial market participants, such that different market prices exhibit increased co-movements.
    Keywords: co-movements, financialization, food commodity market, market integration, stock market, structural change, Demand and Price Analysis, Financial Economics,
    Date: 2013
  17. By: Wesley R. Brooks; Stephen C. Newbold
    Abstract: The impacts on biodiversity and ecosystems are among the key reasons for concern about climate change. Integrated assessment models are the main tools used to estimate the global economic benefits of policies that would address climate change, but these models typically include only a partial accounting and idiosyncratic treatment of ecosystem impacts. This report reviews several recent studies of the impacts of climate change on biodiversity. We also review recent quantitative estimates of the rate of species extinctions, the impact of climate change on biodiversity, and the value of biodiversity loss. Based on these estimates, we re-calibrate the biodiversity loss function in the FUND integrated assessment model, and we develop a new global biodiversity nonuse value function. These could serve as replacements for the functions currently used in FUND, or as a preliminary ecosystem damage function in a new integrated assessment model. We also highlight areas where further research is needed for developing more comprehensive and reliable forecasts of ecosystem damages as a result of climate change.
    Keywords: climate change, ecosystem, biodiversity, integrated assessment model, structural benefit transfer
    JEL: Q51 Q54 Q57
    Date: 2013–03
  18. By: Bruce A. Babcock (Center for Agricultural and Rural Development (CARD))
    Abstract: At the request of the oil industry and livestock groups, Congress and the Environmental Protection Agency (EPA) are considering whether to reduce biofuel blending mandates. Livestock groups want lower corn prices and the oil industry claims that it simply cannot blend more biofuels than current levels. The oil industry argues that its only compliance option is to reduce domestic gasoline and diesel sales if mandates are not reduced; however, an alternative compliance path is to increase the demand for ethanol by investing in E85 fueling capabilities. Ethanol demand would increase by between 800 million and one billion gallons per year for each 2,500 stations with E85 fueling capabilities given the existing fleet of flex vehicles. The cost of investing in E85 at existing stations depends on whether a new tank needs to be installed or whether an existing tank can be converted. If new tanks need to be installed then the cost of 2,500 stations would be at least $325 million. If no new tanks need to be installed then the cost would be approximately $87.5 million. With the price of the tradable ethanol credits trading between $0.60 and $0.70 per gallon, and with at least 14 billion credits needed under current mandates, it seems that the reduction in compliance costs could be greater than the costs of investing in E85 infrastructure, which would create an incentive for investment. Simulation results show that this is indeed the case if EPA sets mandates that are attainable with investment. If EPA sets 2014 mandates that can be met with 13.9 billion gallons, then investment in 2,500 E85 stations would reduce oil company compliance costs $ from $3.5 billion to $1.2 billion. If EPA sets 2015 requirements that can be met with 14.7 billion gallons, then 2015 compliance costs would be reduced by more than $3.2 billion dollars from investment in an additional 2,500 E85 stations. Taxpayers, gas station owners, or oil companies could pay for the investment. Congress could divert farm subsidies to pay for E85 investment with a justification that an important beneficiary of ethanol is land-owning farmers. Gas station owners will have an incentive to make the investment if the wholesale price of E85 drops enough to generate fuel cost savings to drivers as well as higher wholesale-retail margins to station owners. Oil companies might find it more efficient to make the investment themselves if the required price of ethanol credits rises too high for too long.
    Date: 2013–09
  19. By: Rau, Marie-Luise
    Abstract: With the lock-up of multinational negotiations under the Doha Round, bilateral agreements have multiplied. The number of regioanl free trade agreements (FTAs) between and across countries has been growing considerably. The objective of the research projectis is to give an overview on the contents of the FTAs between the EU and partner countries in a systematic way. The result will be a systematic comparative analysis, pointing out differences and similarity of EU FTAs as well as indicating main issues. Implications for trade relations and negotiations new trade agreements will be elaborated as well as provide useful insights for quantifying effects.
    Keywords: International trade, regional trade agreements, trade liberalisation, tariff, Agricultural and Food Policy, International Relations/Trade,
    Date: 2013
  20. By: Maixe-Altes, J. Carles; Castro Balaguer, Rafael
    Abstract: The processes of structural change and modernisation in the food distribution industry have been submitted to different economic and institutional frameworks in European countries. Two essential factors have affected these changes: on one hand, the role of technical, financial and organisational innovations and on the other, institutional factors. The weight of both has varied depending on the historical circumstances of the countries in consideration and their level of development. This paper discusses with the framework of the “latecomers”. In these countries, the factor of innovation has been produced in terms of appropriation, whether this is technological or organisational, usually influenced by foreign models or through direct foreign investment. The impact of these innovations has been highly conditioned by inflexible institutional surroundings. Considering the Spanish food trade in the last sixty years is a good way of dealing with the processes of structural change in Mediterranean Europe. This paper helps one understand the role taken by countries which introduced factors of innovation and growth in less favourable surroundings than those of developed Europe.
    Keywords: Distributive trades, food trade, structural change, innovation, Spain, latecomer
    JEL: L8 L81 N7 N8 N84
    Date: 2013–08
  21. By: Feldmann, Corinna; Hamm, Ulrich
    Abstract: This contribution emerged as part of the collaborative project “Data network for better European organic market information” carried out in the 7th Framework Programme of the EU. Data from a survey among organic market data collectors form the basis for the analysis of the current situation of statistics on organic market data. The results reveal a heterogeneous picture, because organic market growth and data collection within the organic food sector have developed differently throughout Europe. Building on the survey results, the quality of data collection approaches is evaluated through the application of the data quality dimensions relevance, accuracy, comparability, coherence, accessibility/clarity, and timeliness/punctuality (Eurostat, 2009).
    Keywords: Market data collection, statistics, organic food, data quality dimensions, data sampling, transparency, International Relations/Trade, Research Methods/ Statistical Methods,
    Date: 2013
  22. By: Jordi Domènech Feliu
    Abstract: This paper analyses rural conflict in one of the most volatile areas of interwar Europe, the latifundia regions of the South of Spain. The historical and economics literature argues that rural conflict was a bottom-up, spontaneous response of landless peasants to unemployment, bad harvests, land ownership inequality, changes in property rights, and the lack of enforcement of pro-worker legislation. A second generation of historical studies has focused on democratization and concomitant changes in collective bargaining and labor market institutions. Was conflict caused by structural factors like poverty, inequality or unemployment or was conflict an endogenous response to political change? This paper analyzes the pattern of conflict in in three Andalusian provinces (Córdoba, Jaén and Seville) in the early 1930s to argue that the timing and geographical distribution of conflict is consistent with a wave of mobilization linked to greater political opportunities favored by lower repression, pro-worker institutional change, and labor market intervention. Time-series and cross-sectional variation in levels of rural conflict suggest conflict was not a spontaneous response to dismal living standards and inequality. Rather, it emerged in large, fast growing towns of Andalusia and was mediated by the strategic interaction of authorities and experienced rural unions. The instances of rural conflict analyzed here suggest it is very difficult for new democratic governments in agrarian societies to stave rural conflict off with labor-friendly intervention. It is often argued that conflict precedes political and institutional change, but it is shown here that conflict can emerge abruptly as a response to those changes.
    Keywords: Inequality, Rural conflict, Unemployment, Interwar Europe, Spanish Civil War (1931-1936)
    JEL: J43 J52 N34 N54 O13 Q15
    Date: 2013–09

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