New Economics Papers
on Agricultural Economics
Issue of 2013‒09‒25
four papers chosen by

  1. Can area measurement error explain the inverse farm size productivity relationship? By Holden, Stein; Fisher, Monica
  2. Rural wealth creation and emerging energy industries: lease and royalty payments to farm households and businesses By Jeremy G. Weber; Jason P. Brown; John Pender
  3. Is the war on drugs working? Examining the Colombian case using micro data By Marcela Ibanez
  4. Numeracy and Financial Literacy of Forest Dependent Communities Evidence from Andhra Pradesh By Sundar, B.; Virmani, Vineet

  1. By: Holden, Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Fisher, Monica (International Maize and Wheat Improvement Center)
    Abstract: The existence of an inverse relationship (IR) between farm size and productivity in tropical agriculture remains a debated issue with policy relevance. Poor agricultural statistical data, including data on farm sizes and farm plot sizes that typically are self-reported by farmers, can lead to biased results and wrong policy conclusions. This study combines self-reported and GPS-measured farm plot and farm sizes to assess how measurement error affects the IR using three rounds of farm plot and household data from Malawi. The results show that measurement error covers up more than 60% of the IR for the total sample but leads to an upward bias in the IR on farms less than one ha. Land and labor market imperfections in combination with food self-sufficiency motives appear to explain most of the IR and lead to a strong IR on farms below one ha.
    Keywords: Inverse farm size – productivity relationship; Measurement error; Land and labor market imperfections; Land quality; Malawi.
    JEL: J43 O13 Q12
    Date: 2013–09–20
  2. By: Jeremy G. Weber; Jason P. Brown; John Pender
    Abstract: New technologies for accessing energy resources, changes in global energy markets, and government policies have encouraged growth in the natural gas and wind industries in the 2000s. The growth has offered new opportunities for wealth creation in many rural areas. At a local level, households who own land or mineral rights can benefit from energy development through lease and royalty payments. Using nationally-representative data on U.S. farms from 2011, we assess the consumption, investment, and wealth implications of the $2.3 billion in lease and royalty payments that energy companies paid to farm businesses. We estimate that the savings of current energy payments combined with the effect of payments on land values added $104,000 in wealth for the average recipient farm.
    Keywords: Consumption (Economics) - United States ; Households - Economic aspects ; Farms - Valuation
    Date: 2013
  3. By: Marcela Ibanez (Georg-August University Göttingen)
    Abstract: The intense debate on the effectiveness of the war on drugs contrasts with the lack of empirical evidence on its impacts. To evaluate the effectiveness of control-supply policies, we use micro data from an original survey with farmers living in a coca growing area in Colombia. We find that while eradication and alternative development decrease coca supply, the elasticity of supply of these policies is rather low. The efficiency of anti-drug policies could be increased by investing more in alternative development and less in eradication. Our analysis suggests that changing people's attitudes toward coca can be a promising alternative in the fight against drugs.
    Keywords: Coca; Colombia; War on Drugs; Morality
    JEL: D81 G11 K42 Z12 Z13
    Date: 2013–09–16
  4. By: Sundar, B.; Virmani, Vineet
    Abstract: This study is an attempt to measure the numeracy and financial literacy of forest dependent communities (FDCs) in India using data from the two economically different forest communities in the state of Andhra Pradesh. In an attempt to rehabilitate degraded forests, the Government of India launched the joint forest management (JFM) program in 1990 with the involvement of FDCs. This has not only helped increase their income levels, but through interactions with and help of Government officials, have also given them a first-hand exposure to financial management at JFM. While there is some evidence on numeracy and financial literacy of urban and rural households and fishing communities in India, there is no evidence on numeracy and financial literacy of Indian FDCs. This study attempts to fill that gap by providing background on FDCs in two economically different regions of Andhra Pradesh (Rayalaseema and Coastal Andhra) and provides evidence on their numeracy and financial literacy. While the performance on both numeracy and financial literacy differs for the two regions, it is found that the participants scored better on numeracy skills than on financial literacy. It was found that while in general participants had difficulty in recognizing mathematical symbols for addition and multiplication and performing the corresponding operations, they were generally able to perform the same operations when orally instructed in their local language without difficulty. While the empirical evidence on financial literacy is less strong, roughly a third of the participants had some basic knowledge of economic concepts like simple interest and time value of money

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