nep-agr New Economics Papers
on Agricultural Economics
Issue of 2013‒12‒06
seventeen papers chosen by
Angelo Zago
University of Verona

  1. Global food price hike is a burden to the poor By Mohajan, Haradhan
  2. Decentralized beneficiary targeting in large-scale development programs : insights from the Malawi farm input subsidy program By Kilic, Talip; Whitney, Edward; Winters, Paul
  3. Agricultural Productivity and Structural Transformation. Evidence from Brazil By Paula Bustos; Bruno Caprettini; Jacopo Ponticelli
  4. Is forest sequestration at the expense of bioenergy and forest products cost-effective in EU climate policy to 2050? By Munnich Vass, Miriam; Elofsson, Katarina
  5. Are Global Food Prices Becoming More Volatile and More Persistent? By Hyeongwoo Kim
  6. Participation in the Supplemental Nutrition Assistance Program (SNAP) and Unemployment Insurance How Tight Are the Strands of the Recessionary Safety Net? By Prell, Mark; Finifter, David
  7. Rural transformation since 1970s in Dokur Village of Andhra Pradesh, India By Reddy, A Amarender
  8. Integrating Demand-Management with Development of Supply-Side Substitutes By James Roumasset; Christopher Wada
  9. Supplementing REDD+ with Biodiversity Payments: The Paradox of Paying for Multiple Ecosystem Services - Working Paper 347 By Jonah Busch
  10. Development of navigation services and Devices – evidence from a case study in Russia By Mikhail Bokov; Anastasia Edelkina; Marina Klubova; Thomas Thurner; Natalia Velikanova; Konstantin Vishnevskiy
  11. Economic development and CO2 emissions: assessing the effect of policy and energy time events for advanced countries By Mazzanti, M.; Musolesi, A.
  12. Prospect theory, mitigation and adaptation to climate change By Osberghaus, Daniel
  13. The Promise of Transferable Fishing Concessions on EU Fisheries By Zafer Kanik; Serkan Kucuksenel
  14. Ability of greens and supergreens to influence environmental regulations By Lenka Wildnerova
  15. The Missing Link between Research and Reality: the significance of the relationship between retail format and organic food consumption By Chad M. Baum
  16. Pollution Permits, Imperfect Competition and Abatement Technologies By Clémence Christin; Jean-Philippe Nicolai; Jerome Pouyet

  1. By: Mohajan, Haradhan
    Abstract: This paper discusses the global food price hike and the effects of it among the poor of developing countries. Increase of food price became severe during 2007 and 2008, which was high in the last fifty years and more than half of the populations of the world affected due to this price hike. Biofuels production is one of the main causes of food price increase. Rapid increase of world population is another cause of soar of food price. Global supply and demand of food commodities, low harvest and natural calamities are also some other causes of increasing of the food prices. Soaring food prices have generated global concern about threats to food security, shaking the satisfaction created by many years of comparatively low commodity prices. Right of food is a fundamental right of every citizen of the state; unfortunately citizens of the most countries are deprived from this right. Many developing countries use food price subsidies or price controls to mitigate hunger and improve the nutrition of the poor but this is not a permanent solution to control food price hike.
    Keywords: Child malnutrition, Biofuels, Food prices, Inflation, Poverty, Subsidies in food.
    JEL: I15
    Date: 2013–10–10
  2. By: Kilic, Talip; Whitney, Edward; Winters, Paul
    Abstract: This paper contributes to the long-standing debate on the merits of decentralized beneficiary targeting in the administration of development programs, focusing on the large-scale Malawi Farm Input Subsidy Program. Nationally-representative household survey data are used to systematically analyze the decentralized targeting performance of the program during the 2009-2010 agricultural season. The analysis begins with a standard targeting assessment based on the rates of program participation and the benefit amounts among the eligible and non-eligible populations, and provides decompositions of the national targeting performance into the inter-district, intra-district inter-community, and intra-district intra-community components. This approach identifies the relative contributions of targeting at each level. The results show that the Farm Input Subsidy Program is not poverty targeted and that the national government, districts, and communities are nearly uniform in their failure to target the poor, with any minimal targeting (or mis-targeting) overwhelmingly materializing at the community level. The findings are robust to the choice of the eligibility indicator and the decomposition method. The multivariate analysis of household program participation reinforces these results and reveals that the relatively well-off, rather than the poor or the wealthiest, and the locally well-connected have a higher likelihood of program participation and, on average, receive a greater number of input coupons. Since a key program objective is to increase food security and income among resource-poor farmers, the lack of targeting is a concern and should underlie considerations of alternative targeting approaches that, in part or completely, rely on proxy means tests at the local level.
    Keywords: Rural Poverty Reduction,Poverty Monitoring&Analysis,Economic Theory&Research,Regional Economic Development,Services&Transfers to Poor
    Date: 2013–11–01
  3. By: Paula Bustos; Bruno Caprettini; Jacopo Ponticelli
    Abstract: We study the effects of the adoption of new agricultural technologies on structural transformation. To guide empirical work, we present a simple model where the effect of agricultural productivity on industrial development depends on the factor bias of technical change. We test the predictions of the model by studying the introduction of genetically engineered soybean seeds in Brazil, which had heterogeneous effects on agricultural productivity across areas with different soil and weather characteristics. We find that technical change in soy production was strongly labor saving and lead to industrial growth, as predicted by the model.
    Keywords: agricultural productivity, structural transformation, industrial development, labor saving technical change, genetically engineered soy
    JEL: F16 F43 Q16
    Date: 2013–08
  4. By: Munnich Vass, Miriam (Department of Economics, Swedish University of Agricultural Sciences); Elofsson, Katarina (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: Forest management affects the quantity of CO2 emissions in the atmosphere by carbon sequestration in standing biomass, carbon storage in forest products and production of bioenergy that replace fossil fuels. The main question in this paper is whether forest sequestration is worth increasing at the expense of bioenergy and forest products to achieve EU’s emission reduction target to 2050 cost-effectively. The assessment is based on numerical calculations using a dynamic, partial equilibrium model of cost-effective solutions, where three abatement methods in the forest sector are included together with abatement in the fossil fuel sector. The results show that forest sequestration in standing biomass is cost-effective compared to bioenergy. When sequestration is taken into account, net present costs for meeting EU carbon targets can be reduced by 18%. This is achieved through an increase in annual carbon sequestration by 30-158 million ton CO2. The overall cost of reaching the 80 per cent carbon reduction target amounts to 2,002 billion Euros when sequestration is included in the policy, but increases to 2,371 billion Euros without sequestration. Results suggest that forests can serve as a cost-efficient carbon sink over the considered time period.
    Keywords: Forest carbon sequestration; bioenergy; cost-effectiveness; dynamic partial equilibrium; EU climate policy
    JEL: Q23 Q52 Q54 Q58
    Date: 2013–11–22
  5. By: Hyeongwoo Kim
    Abstract: Global food prices have recently exhibited highly volatile and very persistent dynamics. Greater fluctuations in food commodities than manufacturing goods often put more serious hardship to poor countries that tend to specialize in raw commodity industries. The present paper attempts to identify the factors that help explain recent phenomena in world commodity markets. We first document strong dynamic correlations (Engle, 2002) between food commodity prices and the US dollar exchange rate. Employing the PANIC method (Bai and Ng, 2004), we then estimate a latent common factor from 27 food and beverage commodity prices, which seem to be closely related with the exchange rate. Once controlled for the effect of the common latent factor, idiosyncratic components of food commodity prices show substantially lower volatilities and persistence. Recent trends in global food commodity prices, therefore, seem to be well explained by a fairly simple but influential factor, that is, highly volatile and persistent movements of the US exchange rate since the recent financial crisis. Other than that, we do not see any compelling evidence of higher volatility or greater persistence in price dynamics. Our findings also call for special attention on the importance of financial markets in addition to factors that influence economic fundamentals.
    Keywords: Global Food Prices; Volatility; Persistence; US Dollar Exchange Rate; DCC; PANIC
    JEL: C51 F31 Q02
    Date: 2013–11
  6. By: Prell, Mark; Finifter, David
    Abstract: This report provides nationally representative annual estimates for 2004-09 of households’ multi-program or “joint” participation patterns in both the Supplemental Nutrition Assistance Program (SNAP) and the Unemployment Insurance (UI) program, including breakouts of household types categorized by household income relative to poverty, race/ethnicity, and education level. SNAP and UI are two strands of the Nation’s recessionary safety net—the subset of safety-net programs for which participation is responsive to the business cycle. Using data from the Annual Social and Economic (ASEC) Supplement to the Current Population Survey, the study found that an estimated 14.4 percent of SNAP households also received UI at some time in 2009 (a recessionary year), an increase of 6.6 percentage points from 2005 (a full-employment year). Conversely, an estimated 13.4 percent of UI households also received SNAP in 2009, an increase of 2.3 percentage points from 2005. SNAP households with lower annual income relative to poverty or with householders who did not complete high school were relatively less likely to also have UI, indicating that these populations were relatively more likely to rely on SNAP benefits alone (without UI).
    Keywords: SNAP, Supplemental Nutrition Assistance Program, Unemployment Insurance, UI, multi-program participation, social safety net, recessionary safety net, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty,
    Date: 2013–11
  7. By: Reddy, A Amarender
    Abstract: In the past two decades, there are significant changes in rural India. There is some significant progress in reduction of poverty. This study examines the pathways by the Dokur villagers of Andhra Pradesh in India to survive and improve livelihoods in the face of a decade of persistent drought. The study is based on quantitative and qualitative data collected by ICRISAT: (a) longitudinal household survey data for the period 1975 to 2009, and (b) information and data gathered through focus group discussions with the villagers. It has documented various types of livelihood strategies, government policies, programs, process and outcomes over the period. The changes in ownership of productive assets including land, cropping patterns, occupational structure, household income, food intake and nutrition, children’s education, and improvement in living standard are also examined. The per capita income of households has increased rapidly in the recent years. However, income inequality situation has worsened as high-income opportunities are favourable to resource endowed households. As a consequence of increased income from multiple sources, consumption level has gone up and consumption has been smoothened, and overall living standard has improved. Access to education particularly for girls and children from marginalized families has increased. Finally, the study identified enabling factors at household level and suggests development policy.
    Keywords: drought, coping mechanism, migration, livelihoods, income, inequality, poverty.
    JEL: J1 J12 Q1 Q12 Q18
    Date: 2013–11–30
  8. By: James Roumasset (University of Hawaii Economic Research Organization); Christopher Wada (University of Hawaii Economic Research Organization)
    Abstract: Sustaining water availability at current prices in the face of growing demand and declining resources is not possible, and scarcity is further exacerbated by falling recharge levels due to climate change, urbanization, and watershed depreciation. We discuss an integrated approach to water-resource development based on principles of sustainability science. In addition to demand management such as pricing, we consider supply-side substitutes such as desalination and wastewater recycling. The importance of integrating demand- and supply-side approaches is especially evident in the case of watershed conservation as climate adaptation. Watershed conservation reduces scarcity by improving groundwater recharge. Yet, incorrect pricing can waste those potential gains. We discuss a joint management strategy, wherein block prices for groundwater consumption and co-determined prices for watershed conservation incentivize and finance efficient profiles of both.
    Date: 2013–11
  9. By: Jonah Busch
    Abstract: An international mechanism to reduce emissions from deforestation using carbon payments (REDD+) can be leveraged to make payments for forests’ biodiversity as well. Paradoxically, under conditions consistent with emerging REDD+ programs, money spent on a mixture of carbon payments and biodiversity payments has the potential to incentivize the provision of greater climate benefits than an equal amount of money spent only on carbon payments. This paradoxical result arises when diversifying payments across multiple services allows a funding agency to spend less on additional rents to existing suppliers of avoided deforestation and more on incentivizing the participation of new suppliers.
    Keywords: Biodiversity conservation; climate change; deforestation; payments for ecosystem services (PES)
    JEL: Q23 Q24 Q54 Q57
    Date: 2013–11
  10. By: Mikhail Bokov (Senior Research Fellow, Department for Sociological Studies, Institute for Statistical Studies and Economics of Knowledge, National Research University Higher School of Economics); Anastasia Edelkina (Research fellow, Department of Business Projects, Institute for Statistical Studies and Economics of Knowledge, National Research University Higher School of Economics); Marina Klubova (Expert, International Research and Educational Foresight Centre, Institute for Statistical Studies and Economics of Knowledge, National Research University Higher School of Economics); Thomas Thurner (PhD, Leading Research Fellow, Laboratory for Economics of Innovation, Institute for Statistical Studies and Economics of Knowledge, National Research University Higher School of Economics); Natalia Velikanova (PhD, Leading Research Fellow, Department for Monitoring of Education Economy, Institute for Statistical Studies and Economics of Knowledge, National Research University Higher School of Economics); Konstantin Vishnevskiy (Research fellow, Laboratory for Science and Technology Studies, Institute for Statistical Studies and Economics of Knowledge, National Research University Higher School of Economics)
    Abstract: The paper assesses the development of the market for navigation services and devices based on the results of a recently held Foresight exercise on monitoring of global technology trends. The future of the market for Global navigation satellite systems (GNSS) devices is largely influenced by grand challenges (i.e. lifestyle change, technical safety, urbanization, rural development, food security, etc.) that determine the pathway for extending use of GNSS signal in different sectors of the economy. Today, satellite positioning technology is used by transporters, carriers, motorists, surveyors, builders, etc. through a wide array of devices — like mobile phones or multimedia devices with built-in receiver modules. Different Foresight methods and tools were used for analyzing the market structure and volumes of navigation services and devices and to detect potential future market developments. The main technical characteristics of GNSS are compared in order to reveal their impact on the quality of the navigation signal essential for the end-users. Investigating the future dynamics of this market in Russia on the basis of expert estimations and governmental strategic documents, the authors conclude that the commercialization of GNSS in Russia is possible only in certain segments, mainly navigation modules for personal vehicles, surveying and mapping equipment as well as consumer electronics
    Keywords: navigation services and devices, market development, GNSS, vehicles, consumer electronics, surveying and mapping equipment, Foresight
    JEL: L80 L92 L16 O38 M31
    Date: 2013
  11. By: Mazzanti, M.; Musolesi, A.
    Abstract: This paper documents the structural differences that exist among advanced countries with regard to their long run carbon dioxide-income relationships. The application of intervention analysis to the framework of Environmental Kuznets curves shows that time related effects, namely structural breaks, have been predominantly relevant in explaining the eventual occurrence of `bell shaped curves' with significant turning points. We indeed present heterogeneity of effects when comparing advanced countries long run dynamics. The second oil shock in the 80's and the 1992 Rio convention are among the major underlying causes of temporal breaks. Thus, environmental policy can 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. Market and policy shocks are likely to be dynamically interrelated, but generating mutually interactive effects in the way the system `adapts' and reacts to changing (pricing) conditions over time.
    JEL: C22 Q53
    Date: 2013
  12. By: Osberghaus, Daniel
    Abstract: Climate change is one of the most pressing challenges in current environmental policy. Appropriate policies intended to stimulate efficient adaptation and mitigation should not exclusively rely on the assumption of the homo oeconomicus, but take advantage of well-researched alternative behavioural patterns. Prospect theory provides a number of climate-relevant insights, such as the notion that evaluations of outcomes are reference dependent, and the relevance of perceived certainty of outcomes. This paper systematically reviews what prospect theory can offer to analyse mitigation and adaptation. It is shown that accounting for reference dependence and certainty effects contributes to a better understanding of some well-known puzzles in the climate debate, including (but not limited to) the different uptake of mitigation and adaptation amongst individuals and nations, the role of technical vs. financial adaptation, and the apparent preference for hard protection measures in coastal adaptation. Finally, concrete possibilities for empirical research on these effects are proposed. --
    Keywords: Adaptation,Climate Change,Mitigation,Prospect Theory,Reference Point,Uncertainty
    Date: 2013
  13. By: Zafer Kanik (Department of Economics, Boston College); Serkan Kucuksenel (Department of Economics, METU)
    Abstract: Two of the primary issues of the next Common Fisheries Policy (CFP) reform are maximum sustainable yield (MSY) and transferable fishing concessions (TFCs). The European Commission agreed on implementing TFCs under some major principles including reserving a part of total quotas for small-scale fishermen in order to prevent the reduction in the fish catching sector employment. Besides, the European Commission set the goal of achieving MSY for all European fisheries by 2015. The interrelation between these two objectives should be well understood. In this study, the impact of fishing on total biomass is analyzed under an age-structured model, and the potential effects of TFCs on the achievement process of MSY harvesting conditions are explained. It is shown that the implementation of TFCs, under the major principles defined by the European Commission, has an impact on both the total biomass growth and the time path to reach the goal of MSY. The paper concludes that initial allocation of quotas does matter since reserving quotas for small-scale fishermen reduces the time needed to achieve MSY.
    Keywords: Transferable fishing concessions; Maximum sustainable yield, Small-scale fishermen, Individual transferable quotas, Age-structured model.
    JEL: D02 D04 D78 Q22
    Date: 2013–12
  14. By: Lenka Wildnerova (UP1 UFR02 - Université Paris 1, Panthéon-Sorbonne - UFR d'Économie - Université Paris I - Panthéon-Sorbonne - PRES HESAM)
    Abstract: The goal of this paper is to explore the environmental policies introduced by the government that cares about the welfare of its citizens and the contributions from the lobby groups. Our addition to the topic of environmental lobbying is in modeling lobby groups, where we distinguish between local and global pollution. We showed that in some cases, the environmental lobbying might have a negative impact on the tax level, which is not true for the local lobbying. Even more interesting result shows that the presence of supergreens might increase the pollution level in the home country. Our results for the cooperative policies prove that the introduced tax will imply lower global emissions. We demonstrated that the asymmetries in some parameters will reinforce the tax levels in the case of national lobby and supergreens if the asymmetry parameter in the foreign country is larger.
    Keywords: environmental lobbying, lobby groups, pollution tax, emission leakage, large countries, local lobby, supergreens
    Date: 2013–07–05
  15. By: Chad M. Baum (Max Planck Institute of Economics, Evolutionary Economics Group, Jena)
    Abstract: The impact that the retail format has on the level of individual motivation tends to be overlooked in discussions of the determinants of organic consumption, this neglect due to the tendency to model individual and contextual factors separately. Hence, the dominant research paradigm has difficulty accounting for the differences in energy and motivation across consumers. Moreover, in spite of the expansions to the set of contextual factors, this paradigm is unable to increase the 'reality' of descriptions of consumer behavior so long as such attempts are then filtered back through modeling frameworks initially developed to address different questions. To illustrate the dual importance of asking the right questions and using appropriate models, this paper utilizes a modeling exercise to explore the consequences of using two prevalent modeling approaches that utilize a limited form of the relationship between individual and retail format to explain the level of motivation. By illustrating the potential for omitted variable bias and misleading policy implications, it is argued that novel modeling approaches are necessary to integrate the broader range of relationships that exist, as well as the relevance of these relationships to the level of motivation.
    Keywords: organic food, consumer behavior, retail formats, motivation, economic modeling
    JEL: B41 C60 D03 D11
    Date: 2013–11–29
  16. By: Clémence Christin (Université de Caen Basse-Normandie, France); Jean-Philippe Nicolai (ETH Zurich, Switzerland); Jerome Pouyet (Paris School of Economics, France)
    Abstract: Under imperfect competition, the effect of a cap-and-trade system on indus- try profits depends on the type of abatement technology that is used by firms: industries that use process-integrated technologies are more affected than those using end-of-pipe abatement technologies. The interaction between environmental policy and the evolution of the market structure is then studied. In particular, a reserve of pollution permits for new entrants is justified when the industry uses a process-integrated abatement technology, while a system with a preemption right may be justified in the case of end-of-pipe abatement technology.
    Keywords: Cap-and-trade system; imperfect competition; abatement technologies.
    JEL: L13 Q53 Q58
    Date: 2013–10
  17. By: Shital Sharma
    Abstract: This research studies the link between environmental regulation and plant level productivity in two U.S. manufacturing industries: pulp and paper mills and oil refineries using Data Envelopment Analysis (DEA) models. Data on abatement spending, emissions and abated emissions are used in different DEA models to study plant productivity outcomes when accounting for abatement spending or emissions regulations. Results indicate that pulp and paper mills and oil refineries in the U.S. suffered decreases in productivity due to pollution abatement activities from 1974 to 2000. These losses in productivity are substantial but have been slowly trending downwards even when the regulations have tended to become more stringent and emission of pollutants has declined suggesting that the best practice has shifted over time. Results also show that the reported abatement expenditures are not able to explain all the losses arising out of regulation suggesting that these abatement expenditures are consistently under-reported.
    Date: 2013–10

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