New Economics Papers
on Agricultural Economics
Issue of 2014‒01‒17
forty-nine papers chosen by

  1. VOJVODINA’S AGRICULTURE – ANALYSIS & POSSIBILITIES By Novković, Nebojša; Mutavdžić, Beba; Vukelić, Nataša
  3. SMEs IN FUNCTION OF DEVELOPMENT OF ORGANIC AGRICULTURE IN SERBIA By Popović, Blaženka; Maletić, Radojka; Paunović, Tamara
  4. Is Weather Really Additive in Agricultural Production? Implications for Climate Change Impacts By Ortiz-Bobea, Ariel
  5. CREDIT AS THE FINANCIAL SOURCE OF THE SERBIAN AGRICULTURE By Radović, Gordana; Pejanović, Radovan; Nјegovan, Zoran
  7. Locating food sovereignty: geographical and sectoral distance in the global food system By Robbins, M.J.
  9. Capitalism in Green Disguise: The Political Economy of Organic Farming in the European Union By Charalampos Konstantinidis
  10. Farm profitability and Labour Use Efficiency By Amarender A, Reddy
  11. A new scramble for land or an unprecedented opportunity for the rural poor? Distributional consequences of increasing land rents in developing countries By Hvid , Anna Kirstine; Henningsen , Geraldine Adrienne
  13. Do Wealth Gains from Land Appreciation Cause Farmers to Expand Acreage or Buy Land? By Weber, Jeremy G.; Key, Nigel
  14. Weather Derivatives and Crop Insurance in China By Baojing Sun; Changhao Guo; G. Cornelis van Kooten
  16. An evaluation of climate change effects on agricultural systems: the case of Trasimeno Lake By Antonio Boggia; Fabrizio Luciani; Gianluca Massei; Luisa Paolotti; Lucia Rocchi; Tommaso Sediari
  17. Adapting Contract Theory to Fit Contract Farming By Wu, Steven Y.
  19. The Economics of Contract Farming: A Credit and Investment Perspective By Du, Xiaoxue; Lu, Liang; Zilberman, David
  21. The devil is in the details: Base updating and the cost of new farm bill programs By Vincent H. Smith; Barry K. Goodwin
  22. Agriculture and Rural Development - Challenges of Transition and Integration Processes By Anonymous; Stevanović, Simo
  24. Contracting for Energy Crops: Effect of Risk Preferences and Land Quality By Yang, Xi; Paulson, Nick; Khanna, Madhu
  26. The Impact of Climate Change on Agriculture: Nonlinear Effects and Aggregation Bias in Ricardian Models of Farm Land Values By Carlo Fezzi; Ian Bateman
  27. Modelling the Effects of Oil Prices on Global Fertilizer Prices and Volatility By Chang, C-L.; Chen, C.-C.; McAleer, M.J.; Chen, P-Y.
  28. Land governance of suburban areas of Vietnam By de Wit, J.
  29. Tracing the Welfare and Livelihood Choices of Farm Households following Displacement through Land Recovery in Vietnam By de Wit, J.
  30. Farmland: Is it Currently Priced as an Attractive Investment? By Boehlje, Michael; Baker, Timothy; Langemeier, Michael
  31. From futures markets to the farm-gate By Bargawi, H.; Newman, S.A.
  32. Contract Farming Risks: A Monte Carlo Assessment By Glenn P. Jenkins; Chun-Yan Kuo
  34. Determinants of profitability of Polish rural micro-enterprises By Janda, Karel; Strielkowski, Wadim; Rausser, Gordon
  36. Economic Insights Required for Using Lifecycle Analysis for Policy Decisions By Klotz, Richard; Bento, Antonio M.; Landry, Joel R.
  37. Low-fat, light, and reduced in calories By Versluis, I.; Franses, Ph.H.B.F.
  38. Do the Poor Benefit from Devolution Policies? Evidences from Quantile Treatment Effect Evaluation of Joint Forest Management By Dambala Gelo; Steven F. Koch; Edwin Muchapondwah
  39. Flooding and Resilience: Valuing Conservation Investments in a World with Climate Change By Kousky, Carolyn; Walls, Margaret; Chu, Ziyan
  40. The Healthy Incentives Pilot and Fruit and Vegetable Intake: Interim Results By Klerman, Jacob Alex; Bartlett, Susan; Wilde, Parke; Olsho, Lauren
  42. Economic Experiments and Environmental Policy: A Review By Noussair, C.N.; Soest, D.P. van
  45. Should we internalize intertemporal production externalities in the case of pest resistance? By Elsa Martin
  46. Innovation Complementarity and Environmental Productivity Effects: Reality or Delusion? Evidence from the EU By Marianna Gilli; Susanna Mancinelli; Massimiliano Mazzanti
  47. Forest Management in an Urbanizing Landscape By Maria A. Cunha-e-Sa; Sofia F. Franco
  48. Count Models and Wildfire in British Columbia By Zhen Xu; G. Cornelis van Kooten

  1. By: Novković, Nebojša; Mutavdžić, Beba; Vukelić, Nataša
    Abstract: The share of agricultural population in the total population of Vojvodina is below 11%. The agricultural population of Vojvodina accounts for 26% of agricultural population, i.e. 24% of the active agricultural population of Serbia. Per 1 inhabitant there is 0.88 ha of agricultural land or 0.78 ha plough land. Having in mind that the average farm size is about 3.59 ha of used arable land and that each farm has about 3 separate parcels, it could be concluded that Vojvodina has a very unfavourable property structure. Corn is the most dominant plant species in Vojvodina. It is grown on about 630,000 ha with average yield of 5.3 t/ha, and annual production of about 3.3 million tons. Vojvodina accounts for around 58% of corn production in Serbia. Wheat is produced averagely on 330,000 ha with average yield of about 3.7t/ha and annual production of around 1.2 million tons. Vojvodina accounts for over 56% of the total wheat production in Serbia. The gross domestic product in agriculture is larger than the gross domestic product in food industry, which means that a significant part of agricultural production is spent or exported in raw state, and not processed within own capacities. The share of Vojvodina in gross domestic product of food industry in Serbia (47.3%) is larger than its share in gross domestic product of agriculture of Serbia (39.6%), although the structure of agricultural production in other parts of Serbia is more intensive (vegetable growing, fruit growing and animal husbandry are more dominant). This is due to the fact that in Vojvodina there are more capacities for grain and industrial crop processing. The real capabilities of faster development of Vojvodina’s agriculture lie in the multi-functional development. This means that one part of the agricultural resources will be used in conventional manner by intensifying agricultural production to the limits of sustainable development, a part of the resources will be used for non-agricultural purposes (agro-eco tourism, hunting, fishing and sports tourism and catering, and other services and the production of renewable energy), while a part of resources will by used for organic and safe food.
    Keywords: Vojvodina, agriculture, competitiveness, Agricultural and Food Policy, Productivity Analysis, C10, Q10, E23,
    Date: 2013–09
  2. By: Vasiljević, Zorica; Zarić, Vlade; Šević, Dunja
    Abstract: Due to its specific nature agriculture is exposed to a number of risks, whose emergence could lead to the losses in production as well as volatility in the business. The risks can not be completely eliminated, but they can be managed and their impacts can be minimized. Insurance could have the most important role in minimization of risk. Insurance is a form of risk management used to limit potential losses. Insurance in agriculture includes crop and fruit insurance, but also insurance of livestock, domestic and wild animals, buildings and machinery, and can be applied in greenhouses, forestry and aquaculture as well. Insurance in Serbian agriculture is undeveloped. The share of the crop insurance and the animal insurance premiums was only about 2.6% of the total non-life insurance premiums in 2011. In Serbia it has been insured only about 3% of registered farms and 8-10% of the cultivable land areas. It is common practice that governments around the world take an active role in subsidizing agricultural insurance. Since 2006 Serbian government has also introduced the subsidizing of insurance premiums in the case of animals, crops and fruits insurance (in 2006 and 2007 by 30%, while since 2007 onward by 40%). Some local governments subsidize additional 10% of premium. These incentives have not led to the increased interest of farmers to ensure their production and fixed assets. By utilization of the desk research method it has been analyzed the general situation of agricultural insurance in Serbia, together with comparative analysis of the situation in Serbia with the one in the neighboring countries and EU. On the basis of the case study method for 100 family farms belonging to the municipalities of the Belgrade city, there have been analyzed the following parameters: presence of the crop and fruit insurance at the family farms, the types of risk from which the farmers usually insure their crops and fruits, the success of getting fee for damages caused by the insured events, the reasons why insurance is not present in the larger extent in Serbian agriculture and what are the possibilities for greater use of insurance as the safest form of minimization the potential risks in agriculture. The authors have also discussed a possibility of introducing the mandatory insurance for agricultural production, as well as the participation in agricultural insurance of those stakeholders which have interest for greater use of insurance in Serbian agriculture (insurance companies, food processing companies, banks, veterinary and extension services, local government authorities etc).
    Keywords: insurance, agriculture, risk, family farms, Serbia, Agricultural and Food Policy, Risk and Uncertainty, G22,
    Date: 2013–09
  3. By: Popović, Blaženka; Maletić, Radojka; Paunović, Tamara
    Abstract: Agricultural production is very diverse and gives the great opportunities for various activities of small and medium enterprises. There is a great competition for placement of agricultural and food products, on both, domestic and international food markets. In a situation where there is a hyper production of agricultural products in the European market, the export of agricultural and food products is possible only if it offers organic products, for which there is a great demand. Organic production in Serbia is more popular and economically more important. Thanks to potentials that are reflected primarily in the fragmented property and land that is not contaminated with harmful substances, this type of agriculture can contribute significantly to development of rural areas and agriculture in general. Therefore, organic farming is set as one of the priorities for development of agriculture, and an integral part of the strategy for rural and agricultural development in the Republic of Serbia. Development level of organic production in Serbia is low, and the reasons are as follows: a low level of environmental awareness, lack of state support to the agricultural sector, the decline in living standards of the population, and therefore the reduced purchasing power. Organic products are becoming increasingly important goods in world terms, and there is a growing participation of these products in global trade flows. It is evident that the presence of organic food in the growing number of consumers around the world is not just a fashion fad, but the constant striving to eat better quality products, and 165 thus contribute to the preservation of the environment and our health. These products represent a great opportunity for the promotion of small and medium enterprises in domestic and especially in foreign markets.
    Keywords: Organic farming, SMEs, SWOT analysis, Crop Production/Industries, Food Consumption/Nutrition/Food Safety, Production Economics, C10, Q13,
    Date: 2013–09
  4. By: Ortiz-Bobea, Ariel (Resources for the Future)
    Abstract: Recent reduced-form econometric models of climate change impacts on agriculture assume climate is additive. This is reflected in climate regressors that are aggregated over several months that include the growing season. In this paper I develop a simple model to show how this assumption imposes implausible characteristics on the production technology that are in serious conflict with the agricultural sciences. I test this assumption using a crop yield model of US corn that accounts for variation in weather at various times of the growing season. Results strongly reject additivity and suggest that weather shocks such as extreme temperatures are particularly detrimental toward the middle of the season around flowering time, in agreement with the natural sciences. I discuss how the additivity assumption tends to underestimate the range of adaptation possibilities available to farmers, thus overstating projected climate change impacts on the sector.
    Keywords: climate change, agriculture, production, additivity
    JEL: Q54 Q51 Q12
    Date: 2013–12–20
  5. By: Radović, Gordana; Pejanović, Radovan; Nјegovan, Zoran
    Abstract: The aim of this paper is to describe the role of credit as a source financing agriculture in the Republic of Serbia in the recent period, and to determine the advantages and disadvantages of the use of this financial instrument for financing agricultural production. Agriculture, given its specific production is not capable self-financing. And that they it needs to be informed by proper financing models. In the Republic of Serbia in the recent period there was not an adequate funding model was used, and the problem of financing agricultural production is still very actual. This is the most serious and complex problem of domestic agriculture and agricultural policy. Main obstacle to a higher use of loan funds in Serbian agricultural economy are: the instability and uncertainty of the agricultural and food production, unsafe placement of unknown prices of agricultural crops in the torque delivery and inconsistent agricultural policy measures. Ese factors add to the limiting factor for greater investments in agriculture and a low rate of return of agricultural production, which is limited by low yields, low productivity, and price disparity. On the other hand, there are few banks in the reporting period, as part of their loans, and investments have directed towards agriculture. The reasons are the high risks of agricultural production, its dependence on weather conditions, the risk of disease outbreaks and large-scale as well as large fluctuations in prices of agricultural products. Risk adverse banks generates a high degree of dispersion of demand for financial services, high costs of obtaining information and performing financial transactions for farmers, and the lack of quality of loan collateral, due to unregulated or poorly regulated property rights. The demand for agricultural credit is not evenly distributed throughout the year, but is significantly higher in the sowing period, which requires a larger book of business assets of banks in this period, and thus the inability to qualify it in profitable economic activities and in the short term. Farmers have limited confidence in the banking sector, and they lack experience in dealing with the banks. Based on the research it can be concluded that loans are not performing source of funding in agriculture. In order to provide more favorable bank loans for agricultural development in the Republic of Serbia, autonomous involvement of commercial banks is not sufficient. It is necessary to introduce coordinated activities of all state bodies, which would allow the reduction of the political, institutional and financial risk in these economic conditions.
    Keywords: agriculture, agricultural finance, credit as the financial source, the Republic of Serbia, Agricultural and Food Policy, Agricultural Finance, Food Security and Poverty, Risk and Uncertainty,
    Date: 2013–09
  6. By: Ovchinnikov, A. S.; Oleynik, O. S.; Balashova, N. N.
    Abstract: The development problems of a fruit and vegetable sub-complex in the risky conditions of the Volgograd region agriculture are discussed in the article. The organizational and economic assessment is given to formation of the fruit and vegetable production regional market; the major factors influencing its development are defined.
    Keywords: fruit and vegetable sub-complex, agricultural producers, sale, Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Political Economy, Q10, Q12,
    Date: 2013–09
  7. By: Robbins, M.J.
    Abstract: This paper seeks to problematize the role of local food systems within the food sovereignty movement and as a counter to the logic of the global industrial food system. It answers the question of how food sovereignty, via its tenet of local food systems, addresses the geographical and sectoral distances in the global food system. In doing this, it utilizes an approach loosely based on Chayanovian thinking and analytical tools provided through food regime analysis, the theory of uneven geographical development and the metabolic rift. The paper explores six forms of distance in the industrial food system – production from consumption, distant markets, peasants from their land, producers from consumers, the rural-urban divide and agriculture from nature. Then the paper situates local food systems within food sovereignty and food sovereignty within the wider transnational agrarian movements from which it emerged. Next the paper differentiates local food systems by scale, method and character. Finally, it illustrates how and to what extent food sovereignty counters these distances by evaluating the abilities and gaps of food sovereignty in relation to the various forms of distance.
    Keywords: capital accumulation, distance, food sovereignty, industrial food system, local food systems
    Date: 2013–04–09
  8. By: Munćan, Mihajlo; Đoković, Jelena
    Abstract: Serbia is characterized by a very low consumption of meat and meat products, and constantly depends on import of agricultural and food products. One of the reasons for low consumption of meat in Serbia, in addition to a low standard of living, are the lack of production and supply of meat, resulting in occasional shortages and considerable fluctuation in prices of meat during the year. The goal of this paper is to explore the possibilities for improvement of economic results by changing the type of production in agricultural enterprises. Observed agricultural enterprise is focused solely on intensive crop production, with all the necessary machinery for its organization, and includes large functional objects for fattening pigs. The method of linear programming is used to optimize the production of this agricultural enterprise in function of maximizing gross margin. Obtained solution and post-optimal analysis showed that the change of the type of production is cost-effective in economic terms, as in the terms of rational use of available capacity. This model represents one of the specified ways to improve and increase livestock production in Serbia, as well as the possibility to increase employment and income of labor in rural areas.
    Keywords: crop production, fattening, optimization, economic results, Food Consumption/Nutrition/Food Safety, Production Economics, Q12, C61,
    Date: 2013–09
  9. By: Charalampos Konstantinidis
    Abstract: Organic farming is often presented as the success story of Rural Development policies in the European Union, having grown from a marginal activity to one covering more than 5% of European agricultural land. Even though organic farming is often thought of as small-scale farming, I show that organic farms in Europe display characteristics associated with capitalist agriculture. Organic farms are larger and more mechanized than conventional farms. Furthermore, organic farms are associated with wage-labor and use less labor per hectare than their conventional counterparts, casting doubt on the efficacy of organic farming in increasing labor demand in marginalized communities and acting as an effective tool for keeping rural residents in the countryside. These results present us with evidence of the “conventionalization†of organic farming, and with a significant case of “green-washing†of capitalist structures of production.
    Keywords: political economy, organic farming, agriculture, European Union
    JEL: B5 O13 P16 Q18
    Date: 2014–01
  10. By: Amarender A, Reddy
    Abstract: Appropriate choice of cropping systems to local agro-ecology increases profitability and employment. The increased labour shortage and reduced profitability are growing concerns to the farmers. Keeping this, the paper written with the following objectives: i) To assess the profitability among different cropping systems in the semi-arid tropics; ii) To assess the labour use pattern among different cropping systems and farm size; iii) To determine the resource use efficiency of the different cropping systems in the SAT India; and finally iv) To assess the influence of regional/local factors on incomes of farmers in the SAT India. The study used plot wise data collected from 16 villages from India for the crop year 2010. And it also estimated the resource use efficiency especially labour across different farm size groups in the SAT India and finally to assess the influence of regional/local factors on profitability of farmers. The study shows that input intensive cropping systems like cotton, paddy, wheat, fruits and vegetables based cropping systems are more profitable across many of the SAT villages compared to coarse cereals, pulses and oilseeds based cropping systems. Most of the villages are experiencing the shortage of labour as indicated by higher marginal productivity of labour and increasing trend of mechanisation. Farm size is having positive association with the hired labour use and farm mechanisation, but having negative association with family labour. Female employment has inverted “U” shape relation with farm size. This indicates that the farms with more than five hectares of land are detrimental to women employment as farm mechanization in large farms replaces women labour.
    Keywords: Cropping systems, semi-arid tropics, cost-benefit analysis, production function, labour use efficiency
    JEL: J2 J24 J3 J31 Q1 Q15
    Date: 2013–12–01
  11. By: Hvid , Anna Kirstine; Henningsen , Geraldine Adrienne
    Abstract: Price induced increases in land rents trigger an increasing incentive for rent-seeking behavior. To analyse distributional and welfare effects of increasing land rents in developing countries, we develop a game theoretic model where a large and heterogeneous group of farmers competes with a small and wealthy elite. The results indicate that only relatively small rent increases benefit the farmers more than the elite. Moreover, political institutions have an ambiguous effect on farmers’ rent share, and may even reduce overall welfare, because they induce wasteful expenditure on rent-seeking.
    Keywords: rent-seeking, land rents, agricultural prices, biofuels, natural resources
    JEL: D72 D74 N50 O13
    Date: 2014–01–13
  12. By: Munćan, Petar; Božić, Dragica
    Abstract: The starting point of the present study was the assumption that the intensity of grain production (wheat and maize), on family farms/holdings, can be raised to a higher level by increasing the use of mineral fertilizers per unit area as one of the fastest, simplest and economically most rational measures (does not require additional investments). Determination to increase the level of grain production intensity in this way is the result of survey conducted on family farms/holdings on the territory of Vojvodina. Namely, the survey established that family farms/holdings, despite of analyses of soil fertility and received recommendations for the optimal application of mineral fertilizers, by extension services, in most cases (83%) do not respect the recommendations, and apply mineral fertilizers in accordance with their habits and budget. The results obtained indicated that there were significant opportunities to increase the intensity of grain production by using larger amounts of mineral fertilizers per unit area. Namely, because of the lower use of mineral fertilizers in relation to the recommendations given by the agricultural extension, lower wheat yields were achieved in average by 18.7% and 17.6% for maize than planned, which had the effect of considerably reducing not only the actual value of production of these crops, but also the total profit of family farms/holdings.
    Keywords: economic effects, production intensity, fertilizers, cereals, family farms, Agribusiness, Food Consumption/Nutrition/Food Safety, Production Economics, Q12, D10, D13, D24,
    Date: 2013–09
  13. By: Weber, Jeremy G.; Key, Nigel
    Abstract: Recent increases in farm real estate values in the U.S. have increased farm equity in the form of unrealized capital gains. Exploiting periods of high and low appreciation that caused different increases in wealth for farmers owning different shares of their farmland, we examine if U.S. grain farmers expanded their acres harvested or acres owned in response to an increase in their land wealth. We find that land wealth had little effect on farm size. However, for farms of a similar size, owning 10 percentage points more land increased the growth rate of land owned by 2 percentage points. Because older farmers own a larger share of the land in the farm, an increase in the rate of land appreciation slows the rate at which younger farmers acquire land relative to older farmers.
    Keywords: farmland appreciation, wealth, land ownership, farm size, Agribusiness, Land Economics/Use, Q15, Q12,
    Date: 2013
  14. By: Baojing Sun; Changhao Guo; G. Cornelis van Kooten
    Abstract: The effectiveness of financial weather derivatives to hedge against risk in agriculture has not been well demonstrated; therefore, this risk hedging instrument has only been slowly adopted. The current study analyzes the hedging efficiency of weather index derivatives for corn production in Northeast China. It has two purposes: (1) to identify potential weather variables, such as cumulative rainfall or growing degree days, that impact corn yields; and (2) to analyze the efficiency of financial weather derivatives under varying strike values, where efficiency is defined in terms of its benefit to farmers. Regression results indicate that cumulative rainfall is important for crop production in the study region, and that, under some circumstances, it is efficient to use a weather-indexed financial derivatives to hedge the corresponding risk.
    Keywords: financial weather derivatives, climate risk, corn production, rainfall
    JEL: Q14 Q15 Q18
    Date: 2013–02
  15. By: Maletic, Radojka; Popovic, Blazenka
    Abstract: Due to the different geo-morphological, climatic, economic and social factors, Serbia represents a very heterogeneous area with specific historical legacies that are hard to overcome. Therefore, the regional specificities represent a starting point for planning the development of the economy as a whole, and of the agribusiness in particular. It is important to properly identify the regional peculiarities of agriculture in order to contribute to the agricultural development of Serbia as a whole. First of all, the attention should be placed to overcome the problems of underdeveloped areas that would contribute to a more stable and harmonious development of agriculture in Serbia. Balanced regional development policies should encourage better use of natural resources, especially in lagging behind areas. Spatial planning is a tool to create quality changes, especially in rural areas, linking different sectors (agriculture, food processing, tourism, environmental protection, etc.). The achievement of set objectives is highly dependent on the level of development of small and medium enterprises (SMEs) in agribusiness. Agribusiness is particularly interesting field for the development of SMEs as it is a complex area that involves the production and processing of agricultural and food products. Therefore, by using the appropriate mathematical and statistical methods, evaluation of the operational efficiency of SMEs in agribusiness in districts of Serbia was performed, in order to address the deficiencies and improvement opportunities in business in some areas.
    Keywords: Ranking of district, SME, DEA analysis, operational efficiency, Agribusiness, International Development, C38, L26, O13, R11,
    Date: 2013–09
  16. By: Antonio Boggia; Fabrizio Luciani; Gianluca Massei; Luisa Paolotti; Lucia Rocchi; Tommaso Sediari
    Abstract: Climate change is a current matter that is viewed as controversial by the general public, within scientific communities and by governments. Among the production sectors, agriculture is the most significantly influenced by the effect of climate change. This study is aimed at understanding and measuring the changes that occur in agricultural systems due to climate, and at determining how climate change can affect both agricultural productivity and the environmental impacts of agricultural systems, by focusing a case study on the Trasimeno Lake (region of Umbria, Italy). The analysis was performed using the CropSyst software package. CropSyst is a multi-year, multicrop, daily time step crop growth simulation model with the possibility of connection with GIS (Geographic Information System) software. The specific typology of climate change that was simulated was the doubling of the amount of CO2 in the atmosphere during a time interval of 100 years (from year 2000 to 2100), according to the hypothesis of the CCM3 model (Govindasamy et al., 2003). The results of our simulation have shown an increase of plant productivity (connected with yield and biomass production) and an invariable situation concerning the indicators of stress by nitrogen, water and temperature. With reference to the environmental situation, our results have shown a general increase of nitrogen lisciviation, as a consequence of the increase of mineralisation, with potential effects on the soil fertility loss, and a decrease of runoff and deep percolation. The erosion indicator did not vary in a significant way. Our CropSyst - GIS system developed for this study has been useful both for the evaluation of the existing data, and for the simulation of future data.
    Date: 2013–12–02
  17. By: Wu, Steven Y.
    Abstract: This article discusses the current state of contract theory and its usefulness for conceptualizing issues related to agricultural contracting. I will discuss the limitations of existing theory for applied work, and what methodological improvements are needed to enhance the usefulness of the theory to agricultural economists. One pervasive problem is that the canonical economic literature on contracts is rather fragmented and the various methodological strands are narrow in their focus. As such, there is a need for agricultural economists to engage in methodological research to develop applied contracting models that can capture higher order features of real world agricultural contracts while delivering generalizable comparative statics predictions. The need for such research is obvious as contracting continues to expand along the entire modern food marketing channel. In the latter part of this article, I develop a simple model to illustrate how classic methodological approaches can be combined with recent developments in contract and game theory to construct applied theory models that are useful for capturing some important features of agricultural contracts.
    Keywords: Agricultural and Food Policy, Research Methods/ Statistical Methods,
    Date: 2013–11
  18. By: Glenn P. Jenkins (Department of Economics, Queen's University, Canada, Eastern Mediterranean University, Mersin 10, Turkey); Mikhail Miklyaev (Eastern Mediterranean University, Famagusta, Mersin 10, Turkey)
    Abstract: The study evaluates an intervention designed to improve the livelihood of chronically-food insecure households with limited land holdings. The returns to the different stakeholders are estimated and a distribution analysis is conducted. The analysis suggests that the deterministic scenario will yield a very positive net present value for all the proposed commodities (potato, onion, and tomatoes). To reduce the risk borne by the farmers, however, the structure of the financing mechanism must be altered to allow the project to operate independently from the other donor’s financial support projects operating in the area. The loan size should be increased to allow the participating households to purchase irrigation pumps. The loan tenor should also be increased to facilitate the loans’ repayments.
    Keywords: cost-benefit analysis, investment appraisal, stakeholder analysis, potatoes, tomatoes, onion, value chain, benefits of irrigation, small scale irrigation, pro-poor interventions, chronic food insecurity, poverty reduction, sustainable development, Ethiopia
    JEL: D13 D31 D61 D62
    Date: 2014–01
  19. By: Du, Xiaoxue; Lu, Liang; Zilberman, David
    Abstract: Agribusiness firms introduce new products that require agricultural production and then processing. Firms have to decide about processing capacity and assure availability of agricultural feedstock. Some of this is done in-house, and some is secured through contracts. We investigate the allocation of capital between processing capacity and in-house production, while the remainder of agricultural inputs is procured through contracts. Our results show that contract farming will increase with the cost of capital and decline when agribusiness firm has monopsony power over feedstock producers. Moreover, when supply of contracted feedstock is uncertain, expected final output will be less than under certainty and more capital will be allocated to in house production of the feedstock.
    Keywords: contract farming, vertical integration, uncertainty, Agribusiness, Farm Management, Q16, Q42,
    Date: 2013–11–09
  20. By: Glenn P. Jenkins (Department of Economics, Queen's University, Canada, Eastern Mediterranean University, Mersin 10, Turkey); Mikhail Miklyaev (Eastern Mediterranean University, Famagusta, Mersin 10, Turkey); Katarzyna Pankowska (University of British Columbia, Vancouver, Canada)
    Abstract: The main objective of the study is to estimate an annual income increase of land constrained Ethiopian households, now growing maize, from either shift to the mono-cropping of red haricot beans or to the intercropping the beans with maize. The study revealed that mono-cropping of red haricot beans is more profitable for the households compared to either maize production or intercropping. The households, however, are reluctant to shift to the mono-cropping practice of red haricot beans production. This can be explained by the level of risk faced by the households in case of crop failure. The Ethiopian households with the limited land holding are generally reluctant to mono-cropping of any commodity. The economic net benefits of the red haricot beans production arising to the different stakeholders, including the government of Ethiopia, were also estimated. A sensitivity analysis was used to determine the main risk factors of the activity.
    Keywords: cost-benefit analysis, investment appraisal, stakeholder analysis, pulses, red haricot beans, value chain, intercropping, mono-cropping, pro-poor interventions, chronic food insecurity, poverty reduction, Ethiopia
    JEL: D13 D31 D61 D62
    Date: 2014–01
  21. By: Vincent H. Smith; Barry K. Goodwin
    Abstract: "Base updating," a little-known measure likely to surface in the next farm bill, would allow farming operations to pick and choose the numbers� that effect their eligibility for new subsidy payments--and leave taxpayers holding the bag.
    Keywords: subsidies,farm bill,agricultural policy
    JEL: A
    Date: 2014–01
  22. By: Anonymous; Stevanović, Simo
    Abstract: Table of Contents: Significance and comparative advantages of the agrarian sector in Serbian foreign trade, by Dragica Božić and Marija M. Nikolić; Credit as the financial source of the Serbian agriculture, by Gordana Radović, Radovan Pejanović, and Zoran Nјegovan; Partial equilibrium model as a tool for policy analysis in agriculture: an empirical evidence of Macedonia, by Ana Kotevska, Dragi Dimitrievski, and Emil Erjavec; I-squared distance in order of ranking countries of central, eastern and southeastern Europe according to the level of productivity in agriculture, by Svjetlana Janković-Šoja and Dana Bucalo; Serbia in transition from self-governing socialism to liberal capitalism, by Simo Stevanović and Milan R. Milanović; Vojvodina's agriculture - analysis and possibilities, by Nebojša Novković, Beba Mutavdžić and Nataša Vukelić
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, International Development,
    Date: 2013–09
  23. By: Popovic, Rade
    Abstract: The objective of this research was to examine efficiency of the most common milk production systems in central Serbia. Sample with 8 farms is not statistically representative, but allows use of Data envelopment analysis (DEA). Such technique allows measurement of whole farm efficiency and gives benchmarks for further farm analysis. DEA compare levels of input and outputs for a given dairy farm with all other analysed dairy farms, determining levels of efficiency for all farms with collected consistent data set. A DEA model to measure economic efficiency was developed. It measure efficiency of producing physical (milk) and economic outputs (income) by use of physical (labour and cows) and economic inputs (feed cost). Results revealed that economic efficiency was achieved by three from eight farms. In total, milk production system with grazing period had higher level of efficiency 0,796 comparing with intensive production system with 0,579. But, in intensive milk production system one farm showed efficiency. This indicates that some other input variables like farmer’s management capabilities influenced on efficiency.
    Keywords: Economical efficiency, milk, Serbia, production system, dairy farm, Livestock Production/Industries, Production Economics, Productivity Analysis, Q12,
    Date: 2013–09
  24. By: Yang, Xi; Paulson, Nick; Khanna, Madhu
    Abstract: This paper analyzes the effect of landowner risk preferences and land quality on the optimal mix of vertically integrated production and contracted production of an energy crop in a region characterized by heterogeneity in landowners’ risk preferences and land quality and with riskiness of returns from both energy crop and conventional crop production. We examine the determinants of the decision of landowners to grow an energy crop for biofuel production under one of three types of contracts, a land leasing contract, a fixed price contract and a revenue sharing contract and the impact of risk and time preferences, land quality and riskiness of energy crop production and prices on the optimal contract terms and effective cost of biomass. We find that as the degree of risk aversion and rate of time preference increases and as the riskiness of producing both the conventional crop and the energy crop increases, the share of vertically integrated production of energy crops increases. While low quality land is more likely to be converted to energy crop production, an increase in the degree of risk aversion results in an increase in the threshold level of land quality converted to energy crops under a land leasing contract but a decrease in the threshold level of land quality converted under a fixed price contract and a revenue sharing contract. We also find that the refinery can potentially earn a higher profit by offering a menu of different types of contracts rather than a single type of contract only; by allowing self-selection of contract type based on their risk preferences, the risk premium needed to induce production of energy crops is reduced.
    Keywords: Contract Farming, Energy Crops, Risk Preferences, Vertical Integration, Agribusiness, Farm Management, Risk and Uncertainty, D86, Q42,
    Date: 2013
  25. By: Glenn P. Jenkins (Department of Economics, Queen's University, Canada, Eastern Mediterranean University, Mersin 10, Turkey); Mikhail Miklyaev (Eastern Mediterranean University, Famagusta, Mersin 10, Turkey); Katarzyna Pankowska (University of British Columbia, Vancouver, Canada)
    Abstract: The aim of this study is to evaluate the profitability of white pea beans production in the context of a pro-poor intervention. The aim of the intervention is to graduate chronically food-insecure households from poverty through an increase of their annual income by US$365. The households have a limited land holding of only 0.25 ha and are currently growing maize. The assistance is coming from a loan enabling mechanism allowing the households to benefit from a subsidized interest rate. The interest rate on the loans is set at 15 percent as compared to the approximately 48 percent free market interest rate. The study revealed that the main risk factor is the international price for white pea beans. The commodity is traditionally perceived as a “food for donkeys” has a very limited demand in the local market. Ethiopia already exports white pea beans, hence, there is a ready market for the commodity. As in case of any internationally tradable commodity, however, the market price of white pea beans will fluctuate independently of domestic market conditions.
    Keywords: cost-benefit analysis, investment appraisal, stakeholder analysis, pulses, white pea beans, value chain, mono-cropping, pro-poor interventions, chronic food insecurity, poverty reduction, sustainable development, Ethiopia
    JEL: D13 D31 D61 D62
    Date: 2014–01
  26. By: Carlo Fezzi (Department of Economics, University of California and CSERGE (School of Environmental Sciences), University of East Anglia); Ian Bateman (CSERGE (School of Environmental Sciences), University of East Anglia)
    Abstract: Ricardian (hedonic) analyses of the impact of climate change on farmland values typically assume additively separable effects of temperature and precipitation. Model estimation is implemented on data aggregated across counties or large regions. We investigate the potential bias induced by such approaches by using a large panel of farm-level data. Consistent with the literature on plant physiology, we observe significant non-linear interaction effects, with more abundant precipitation acting as a mitigating factor for increased heat stress. This interaction disappears when the same data is aggregated in the conventional manner, leading to predictions of climate change impacts which are significantly distorted.
    Keywords: Climate Change, Agriculture, Ricardian Analysis, Aggregation Bias, Semi-Parametric Models
    JEL: Q54 C23 C14
    Date: 2013–11
  27. By: Chang, C-L.; Chen, C.-C.; McAleer, M.J.; Chen, P-Y.
    Abstract: The main purpose of this paper is to evaluate the effect of crude oil price on global fertilizer prices in both the mean and volatility. The endogenous structural breakpoint unit root test, ARDL model, and alternative volatility models, including GARCH, EGARCH, and GJR models, are used to investigate the relationship between crude oil price and six global fertilizer prices. The empirical results from ARDL show that most fertilizer prices are significantly affected by the crude oil price while the volatility of global fertilizer prices and crude oil price from March to December 2008 are higher than in other periods.
    Date: 2013–01–01
  28. By: de Wit, J.
    Abstract: After the Doi Moi (‘renovation’) reforms in Vietnam from 1986, land ownership rules were adjusted, effectively terminating former land collectivisation efforts. While land ownership remained fully under the control of the state, a 1993 land law conferred 20-year leaseholds to most farmers. They could now utilize farm land individually, and sell, swap and mortgage the land in a situation similar to private ownership. These leaseholds are now expiring and a new 2013 land law is in the making. This paper was initially written for UNDP Vietnam which supports Vietnam to help formulate a strong new land law, and brings out the complexities of land governance in the suburban areas of fast expanding Vietnamese cities. It first considers the present and changing land use of suburban areas and the key stakeholders involved here – powerful State Owned Enterprises, farmers, bureaucrats and communist party leaders. Planning practices are then assessed – and seen to be both rigid and complex, with different departments at various levels working at cross purposes under conditions of conflicting rules, laws and weak capacities. This is one reason for the dominance of informal arrangements and widespread corruption, where powerful actors benefit hugely and illegally from conditions of opacity and informal networks. Overall outcomes are that cities expand in a haphazard (‘leapfrog’) and inefficient manner, with insufficient attention for timely and adequate infrastructure, the environment and for people’s welfare as in social amenities and parks. As a result of lopsided incentive systems, it is the state which foregoes huge incomes and faces more costly investments, while many suburban farmers are affected through (arbitrary) land acquisition and inadequate compensation.
    Keywords: Vietnam, environment, land governance, planning, suburban land, urban housing
    Date: 2013–06–28
  29. By: de Wit, J.
    Abstract: Over the last two decades, an estimated 4 million people in Vietnam have been affected or had their lives disrupted by the loss of or the forced eviction from their land or though land conversion where the state decided that it was to be used for other purposes. Most of them are farming households, many of whom suffered negative consequences in terms of lower incomes, unemployment and a lower social status. Some may have managed to enhance their welfare, but on the whole there is little systematic evidence on the overall impacts they had to deal with. But it is certain that the majority of farming households who were displaced – losing house and land - faced a deterioration of their wellbeing and livelihood opportunities in the long run, and after the often limited compensation money had been spent. The problems Vietnamese farmers face here are expected to only increase in the future as large quantities of land will be recovered to expand infrastructure, industrial parks, residential areas, and urban-related facilities. This is increasingly controversial and contested, as seen in numerous incidents where farmers protest fiercely or even with arms against forced evictions, against what they see as insufficient compensation for land, the arbitrary purposes for requisition, and a flawed application of rules and procedures. Efforts are under way to adopt a new Land Law in 2013, which proves very complicated in view of the huge interests involved. This paper addresses these issues with a view to better understand the impacts of land recovery on farmer households followed by displacement in Vietnam in terms of their welfare, well-being and livelihood choices, while providing policy recommendations.
    Keywords: land governance, farmer livelihoods, land recovery and compensation policy, Vietnam
    Date: 2013–12–10
  30. By: Boehlje, Michael; Baker, Timothy; Langemeier, Michael
    Keywords: Agricultural Finance, Land Economics/Use,
    Date: 2013
  31. By: Bargawi, H.; Newman, S.A.
    Abstract: This article contributes to the debate on commodity price transmission and offers an alternative perspective of price formation, transmission and the producer price experience in low-income countries. By investigating the case study of coffee chains, originating in Tanzania the paper demonstrates how the joint forces of global financialisation and domestic liberalisation in producing countries have acted to reorganize coffee chains into structures in which certain chain actors have become increasingly vulnerable to violent price swings while others have managed to remain relatively cushioned from such movements.
    Keywords: commodity prices, financialisation, global commodity chains, coffee
    Date: 2013–12–18
  32. By: Glenn P. Jenkins (Department of Economics, Queen's University, Canada, Eastern Mediterranean University, Mersin 10, Turkey); Chun-Yan Kuo (Arkins M. Kabungo Eastern Mediterranean University, Famagusta, Mersin 10, Turkey)
    Abstract: The objective of this study is to identify the key risks facing each of the stakeholders in the export-focused paprika value chain in Zambia. Although a deterministic cost–benefit analysis indicated that this outgrower scheme would have a very satisfactory net present value (NPV), a Monte Carlo analysis using an integrated financial–economic–stakeholder model identifies a number of risk variables that could make this system unsustainable. The major risks include the variability of the real exchange rate in Zambia, the international price of paprika and the farm yield rates. This analysis points out that irrigation systems are very important for both stabilizing yields and increasing them. The analysis also shows the limitations of loan financing for such outgrower arrangements when at the sector level it is difficult or even impossible to mitigate the risks from real exchange rate movements and movements of international commodity prices. This micro-level analysis shows how critical real exchange rate management policies are in achieving sustainability of such export-oriented value chains.
    Keywords: Monte Carlo simulation, outgrower scheme, paprika ,smallholder farmers, , sustainability
    JEL: Q17 Q12 H42
    Date: 2013–12
  33. By: Glenn P. Jenkins (Department of Economics, Queen's University, Canada, Eastern Mediterranean University, Mersin 10, Turkey); Mikhail Miklyaev (Eastern Mediterranean University, Famagusta, Mersin 10, Turkey)
    Abstract: The aim of this study is to estimate the economic feasibility of modern beekeeping activities versus traditional beekeeping in the context of pro-poor interventions directed to improve the livelihood of the chronically food insecure group of households in Ethiopia. The option of the initial use of a transitional (less expensive) technology with a later move to the modern beekeeping practices was also evaluated. This transition option initially looked as a promising mechanism taking into consideration limited capital savings and access to financial resources of the target group of beneficiaries. The study, however, revealed that the option of using transitional beehives eventually faces the same level of the financial constraint, while significantly reducing the income of the households during the first three years.
    Keywords: cost-benefit analysis, investment appraisal, stakeholder analysis, small holders’ honey production, honey value chain, modern beekeeping, transitional beekeeping, pro-poor interventions, chronic food insecurity, modern beehives, poverty reduction, sustainable development, Ethiopia
    JEL: D13 D31 D61 D62
    Date: 2014–01
  34. By: Janda, Karel; Strielkowski, Wadim; Rausser, Gordon
    Abstract: Rural micro-enterprises are an important factor in sustainable rural development in post-transitional Eastern Europe. This paper deals with determining the key factors influencing profitability in rural micro-enterprises in Poland. The research design was based on a questionnaire survey of 300 rural micro-enterprises in food-processing sector in rich and poor Polish provinces. The analysis carried out in this study is centered around the Polish EU accession in May 2004. Similar to other related studies, our results show that EU accession was not perceived as a major change by rural Polish micro-entrepreneurs and that the EU related factors were not significant determinants of their profitability. However, our results also show that the success of the rural food processing micro-enterprise in Eastern Europe is most related to its owner/manager and enterprise characteristics. For owner/manager the most significant determinants are his/her age and risk-taking as the main motive for establishing an enterprise. The enterprise characteristics that determine the profitability include enterprise location within a region with competitive situation, enterprise size (being a sole trader or family enterprise), ICT advancements in enterprise and the fact whether enterprise has any certificates for its products. The results have significant implications for the researches and policy-makers and can become a basis for preparing relevant enterprise support policies in post-transitional Eastern Europe.
    Keywords: micro-enterprises, rural development, transition economies, EU Accession, linear regression model
    JEL: P25 Q10 R11
    Date: 2013–08–01
  35. By: Todorović, Saša
    Abstract: This paper is aimed at examining the impact of change of sowing structure on the employment of labour force and on the economic effects of business operations of farms directed at final production of fattened beef cattle in the conditions of unchanged estate size. Thereby, appropriate models of family farms directed at fattening of beef cattle are formed and they serve for considering organisational and economic effects of changes in sowing structure. Applying partial budget analysis, it was examined whether the decision on changing the sowing structure was economically justified and under what conditions by using an additional procedure of analysis. Applying this approach, it was determined to what extent that decision contributed to economic effects of the family farm business. A detailed analysis of natural, organisational and economic conditions in which these farms operate was previously carried out so as to successfully accomplish the given aim, and then the analysis of all available resources was conducted as well as the analysis of production results. The data for this survey were collected during the year of 2012 by interviewing holders of the chosen family farms directed at the final production of fattened beef cattle. For the purpose of considering the effects of change in sowing structure, the results of previous research related to employment of labour force in crop and livestock production were used. In this regard, the results of the conducted research show that more rational way of organization (change in sowing structure) provides an opportunity for family farms directed at the final production of fattened beef cattle to use available resources (especially labour force) in a better way, and thus to improve economic effects of the family farm business.
    Keywords: sowing structure, labour force, fattening beef cattle, family farms, Farm Management, Labor and Human Capital, Livestock Production/Industries, Q12, J21, J22,
    Date: 2013–09
  36. By: Klotz, Richard; Bento, Antonio M.; Landry, Joel R.
    Abstract: We develop an analytic and numerical model that integrates land, food and fuel markets and is linked with a sectoral emissions model to examine how the amount of biofuel in the economy impacts the lifecycle emissions of a biofuel under different policies. Our central finding is that the change in GHG emissions due to a unit expansion in biofuel will vary dramatically in the amount of biofuel in the economy and with the policy driving the expansion. The emissions from a unit expansion in corn ethanol due to a blend mandate fall from 12 gCO2e/MJ to 3 gCO2e/MJ, as the quantity of ethanol in the economy increases from 6 to 15 billion gallons. For an input subsidy, emissions due to a unit of ethanol increase from 15 gCO2e/MJ to 26 gCO2e/MJ over the same increase in ethanol. We discuss the implications of these results for lifecycle analysis.
    Keywords: greenhouse gas emissions, lifecycle analysis, biofuel policies, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q54, C68, Q42, Q48,
    Date: 2013
  37. By: Versluis, I.; Franses, Ph.H.B.F.
    Abstract: Recent experimental research has shown that light, low-fat and other claims that signal low calorie content can increase consumption and hence can be counter-effective. In this article we use detailed data from the Dutch National Food Consumption survey to determine the extent to which this increase in consumption can also occur outside an experimental setting. We investigate consumption of 36 different products, including dairy products, fats, and non-alcoholic beverages. Looking at both the consumption amount in grams per eating occasion and the consumption frequency over a period of two days, we find almost no evidence that more is consumed of “light” variants than of regular variants. For only 5 of the 36 products we find a consistent and significant higher consumption in grams of the “light” variant, while for 8 products, consumption frequency of the “light” variant is significantly higher. Moreover, for almost all of these products, we observe that in terms of calories, still less is consumed of the “light” variant than of the regular variant. We conclude that in real-life non-experimental settings “light” claims do not lead to increased consumption of the “light” products.
    Keywords: consumption frequency, consumption volume, energy intake, food intake, light, low-fat, nutrition claims
    JEL: C44 M31
    Date: 2013–09–24
  38. By: Dambala Gelo (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria); Edwin Muchapondwah (School of Economics, University of Cape Town, Private Bag, Rondebosch 7701, Republic of South Africa)
    Abstract: Existing literature have rarely evaluated distributive effect of Joint Forest Management (JFM) augmented with improved market linkages for non-timber forest products nor have they accounted for heterogeneity in the welfare effects. We assess the distributional impact of a unique JFM in Ethiopia in which additional support for improved market linkages for non-timber forest products was provided. The analysis is based on matching and instrumental variable (IV) methods of quantile treatment effects (QTE) evaluation using household data from selected rural villages of Gimbo district, in southwest Ethiopia. The results confirm that the intervention affect outcomes heterogeneously across the welfare distribution. Specifically, the program was found to raise welfare for only those along upper half (median and above) of welfare distribution. Thus, we infer that the program is not pro-poor, and, therefore, is not equity enhancing. Our analysis also revealed that such distributional bias of the program benefit arises from elite capture.
    Keywords: Market Linkage, Joint Forest Management, Quantile Treatment Effects, Welfare Distribution
    Date: 2013–12
  39. By: Kousky, Carolyn (Resources for the Future); Walls, Margaret (Resources for the Future); Chu, Ziyan (Resources for the Future)
    Abstract: Communities in the United States are showing increasing interest in the use of forests, wetlands, and other natural areas to provide protection against extreme events. As the climate changes and such events become more frequent and/or more severe, investments in the conservation of natural areas should become more valuable. But how much more valuable is an open question. In this study, we evaluate the climate resilience benefits of a green infrastructure investment in Missouri: the Meramec Greenway. A buffer of forested lands and other open space, the Meramec Greenway runs along the Meramec River from its confluence with the Mississippi River south of St. Louis into the Ozark uplands. The study builds off of a recent benefit–cost analysis of the Greenway conducted by the authors but evaluates the additional benefits of floodplain conservation that might be provided if floods in the region (a) become more frequent and/or (b) worsen in severity. Results suggest that the benefits of the Greenway in terms of avoided flood damages are greater in both types of climate change scenarios. However, the size of the benefits under current conditions is the more important finding; climate change reinforces the value of the conservation investment but is not the main story.
    Keywords: land conservation, extreme weather events, peak discharges, Hazus, avoided flood damages
    JEL: Q54 Q57 Q51 Q25 Q24
    Date: 2013–12–06
  40. By: Klerman, Jacob Alex; Bartlett, Susan; Wilde, Parke; Olsho, Lauren
    Abstract: In response to low consumption of fruits and vegetables by SNAP recipients, the USDA Food and Nutrition Service created the Healthy Incentives Pilot (HIP) to test the efficacy of providing a 30% incentive for purchases of fruits and vegetables. Published elasticity estimates imply that a pure price reduction of 30% would increase fruit and vegetable consumption by about 20%, i.e., about a fifth of a cup per day. This paper considers the applicability of predictions based on a pure price reduction. It then reports interim results of a random assignment evaluation of HIP which find an increase of about a fifth of a cup per day.
    Keywords: Food Consumption/Nutrition/Food Safety, Health Economics and Policy,
    Date: 2013
  41. By: Glenn P. Jenkins (Department of Economics, Queen's University, Canada, Eastern Mediterranean University, Mersin 10, Turkey); Mikhail Miklyaev (Eastern Mediterranean University, Famagusta, Mersin 10, Turkey)
    Abstract: Ethiopia is characterized by the high cost and poor access or inaccessibility of livestock feed concentrates. The producers of the concentrates operating in the market claim that the limited demand for their products prevents the expansion of the sector. A very limited research has been made to determine whether the benefits from concentrate feed, i.e. higher weight gains, allow outweigh the high feeding cost to livestock producers. This study is financial and economic cost-benefit analysis to determine the feasibility of a small scale lambs and kids fattening exercise using concentrate feed. The study revealed that this livestock fattening activity produces results a negative net present value for the households. An incentive does not exist to use the concentrate feed. These findings explain the low demand for such feed by the rural households. A sensitivity analysis is used to test the range of feed prices that would enable the farmers to use it profitably. A distributive analysis shows that the government of the country would be the main beneficiary of the increased concentrate feed adoption. These benefits would come from the increased meat exports, i.e. increased foreign exchange earnings and taxes.
    Keywords: cost-benefit analysis, investment appraisal, stakeholder analysis, small ruminants fattening, lamb and kids fattening, meat value chain, high feeding cost, concentrate feed, poverty reduction, sustainable development, access to finance, loan enabling intervention
    JEL: D13 D31 D61 D62
    Date: 2014–01
  42. By: Noussair, C.N.; Soest, D.P. van (Tilburg University, Center for Economic Research)
    Abstract: Abstract: We summarize and review the literature on two types of economic experiments. First we discuss the use of experimental laboratories to testbed market solutions to issues in environmental policy. We concentrate on experiments with one and two-sided markets, and applications in the domain of water allocation, food safety, and tradable permit systems. Second, we explore the consequences for environmental policies of the vast body of literature refuting the assumption that humans are only concerned with their own private welfare. We review the literature addressing whether government intervention is always necessary to protect the environment, and also whether it is always effective in doing so.
    Keywords: Survey;experiment;environment;social dilemma
    JEL: C92 Q20 Q30 Q50
    Date: 2014
  43. By: Glenn P. Jenkins (Department of Economics, Queen's University, Canada, Eastern Mediterranean University, Mersin 10, Turkey); Mikhail Miklyaev (Eastern Mediterranean University, Famagusta, Mersin 10, Turkey)
    Abstract: Ethiopian honey production is characterized by the widespread use of traditional technology resulting in relatively low honey supply and poor quality of honey harvested when compared to the potential honey yields and quality gains associated with modern beehives. Modern beehive yields around 20kg of higher quality honey as compared to 6-8 kg of yields from traditional beehives. This situation results in growing domestic prices of table honey and poor perspectives for reaching export markets. The objective of this study is to assess the financial and economic rationale of the USAID interventions addressed to improve the livelihood of poor honey producers through the provision of modern beehives. This study identifies key risk factors facing producers, and estimates the projects’ stakeholders’ net economic benefits. A deterministic cost-benefit analysis was used to evaluate three intervention options: provision of 3 modern beehives/ per beekeeper, provision of 3 modern beehives with tools/ per beekeeper, and provision of 3 modern beehives with tools and trainings on modern beekeeping/per beekeeper.
    Keywords: cost-benefit analysis, investment appraisal, stakeholder analysis, small holders’ honey production, honey value chain, modern beekeeping, modern beehives, poverty reduction, sustainable development, Ethiopia
    JEL: D13 D31 D61 D62
    Date: 2014–01
  44. By: Zakić, Vladimir; Borović, Natalija
    Abstract: The subject of this paper is to analyze the advantages and disadvantages of Activity-Based Costing (ABC) in relation to the classical cost accounting methods. Traditional cost accounting methods were created in a time when direct costs of labor and materials were the dominant factors of production and when changes in technology and consumer demand were not so rapid. Allocation of indirect costs, which could not be directly linked to specific products, was based on specific keys: produced volume of different products, direct material costs, direct labor costs and so on. The problem of the traditional cost accounting became evident when the indirect costs (such as maintenance, insurance, production preparation, etc.) reached significant amount or even exceed the direct costs. In terms of producing multiple products, traditional cost accounting methods may underestimate the small batches production cost per unit and overestimate the mass production cost per unit. In response to these concerns, during the 1980s in United States was created Activity-Based Costing. The conceptual frame of ABC is based on the activities of the company, which can be differentiated in various ways - the primary and secondary, activities that add value and those that do not add value. ABC is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. ABC is generally used as a tool for understanding product and customer cost and profitability based on the production or performing processes. As such, ABC has predominantly been used to support strategic decisions such as pricing, outsourcing, identification and measurement of process improvement initiatives. In evaluation of the advantages and disadvantages of ABC, there will be used methodology methods such as: quantitative method of comparison, the method of key business processes observation in the enterprise, as well as the inductive method. The main objective of this paper is to define a model of activity-based costing in specific conditions of agricultural production and assess its practical significance for cost management process improvement. The results of this research will indicate that the application of ABC in agriculture enterprises can improve the accuracy of cost per unit calculation. However, it should be based on careful cost benefit analysis. Development of ABC could be expensive and implementation could be difficult.
    Keywords: Activity-Based Costing, Cost management, Agricultural enterprises, Agribusiness, Research Methods/ Statistical Methods, D24, D61, M41,
    Date: 2013–09
  45. By: Elsa Martin
    Abstract: Pesticides efficiency decreases with their global application by farmers. Within a strategic dynamic framework, this results in a classic intertemporal production externality. We analyze tax and subsidy schemes that can be used in order to internalize this externality. We show that they are able to restore socially optimal paths but that final time of pesticide use differs. With these schemes, farmers have a tendency to switch to alternative pest-control technology, as integrated pest management, earlier than is optimal. A lump-sum transfer is shown to be necessary to obtain a switching time equal to the socially optimal one, for the subsidy case only. Furthermore, the socially optimal switching time can be later than the one obtained under a situation without control.
    Keywords: stock externality, pest resistance, technology change
    JEL: Q10 Q3 H23 C73
    Date: 2013–11–29
  46. By: Marianna Gilli (University of Ferrara, Italy); Susanna Mancinelli (University of Ferrara, Italy); Massimiliano Mazzanti (University of Ferrara & Ceris Cnr Milan, Italy)
    Abstract: Innovation is a key element behind the achievement of desired environmental and economic performances. Regarding CO2, mitigation strategies would require cuts in emissions of around 80-90% with respect to 1990. We investigate whether complementarity, namely integration, between the adoption of environmental innovation measures and other technological and organizational innovations is a factor that has supported reduction in CO2 emissions per value added, that is environmental productivity. We merge new EU CIS and WIOD meso level data to assess the innovation effects on sector CO2 performances at a wide EU level. We find that jointly adopting different innovations is not a significant factor to increase environmental productivity, neither for the entire economy nor for manufacturing or narrower ETS sectors. The only case where a complementarity arises is for Northern EU manufacturing sectors that integrate eco innovations with product and process innovations to support environmental productivity. We believe that the lack of integrated innovation adoption behind environmental productivity performance is a signal of the current weaknesses economies face in tackling climate change and green economy challenges. Incremental rather than more radical strategies have predominated so far; this is probably insufficient when we look at long-term economic and environmental goals.
    Keywords: Complementarity, Innovation, Climate Change, Sector Performance
    Date: 2013–10
  47. By: Maria A. Cunha-e-Sa; Sofia F. Franco
    Abstract: This paper aims at building a theoretical framework to examine the impact of development pressure on private owner’s forest management practices, namely, on regeneration and conversion cut dates. As the rent for developed land is rising over time, our model creates the possibility of switching from forestry to residential use at some point in the future, thus departing from the Faustmann’s traditional setup. Comparative statics results with respect to stumpage prices, regeneration costs and urban growth parameters are provided. The results obtained depend on the impact on the opportunity cost of holding the stand and the impact on the opportunity cost of holding the land, generalizing Faustmann’s unambiguous results. JEL codes: Q23, R11, R14
    Keywords: urban growth, increasing residential rents, forest management practices
    Date: 2013
  48. By: Zhen Xu; G. Cornelis van Kooten
    Abstract: Two count models are estimated in this analysis to explain the occurrence of wildfire and area burned by wildfire in the interior of British Columbia, Canada. The main explanatory variable is the 4-month lagged El Niño 1&2 index, which is found to have a strong positive influence on wildfire in the study region. As a result of the lag on the climate index, the count models can be used to predict annual wildfire occurrence and the overall monthly size of the area burned by fire districts. An increase in the mean value of the monthly El Niño 1&2 index is projected to result in a slight increase in the number of fires and an increase in the probability that large areas will be burned. Not unexpectedly, however, the impact in July and August could be quite high (increases of 30%). In conclusion, given the large variance, actual changes caused by climate change are uncertain and could be dramatic.
    Keywords: Wildfire occurrence and climate change, negative binomial and Pareto distributed count models, El Niño Southern Oscillation
    JEL: Q23 Q26 Q51 Q54 R21 R32
    Date: 2013–12
  49. By: Glenn P. Jenkins (Department of Economics, Queen's University, Canada, Eastern Mediterranean University, Mersin 10, Turkey); Mikhail Miklyaev (Eastern Mediterranean University, Famagusta, Mersin 10, Turkey)
    Abstract: Milk is one of the main sources for the livelihood of pastoralists around the world. Somali Region in Ethiopia is famous for the high density of livestock, implying significant potential for milk production. The perishable nature of the milk and the absence of the milk processing facilities do not allow this sector to fully utilize this potential, imposing significant economic losses on the community. This study assesses the economic feasibility of the milk processing plant in Jijiga city. The study analyses both moderate and aggressive enhancement options of the plant. The rigorous distributive analysis is used to estimate the allocation of the benefits arising to the government of Ethiopia, the pastoralists and the traders supplying milk to the plant, the labor involved employed by the facility, the Jijiga city community and the private entrepreneur. The sensitivity analysis is used to assess potential risk factors facing the facility.
    Keywords: cost-benefit analysis, investment appraisal, stakeholder analysis, pastoralism, milk processing, milk production, camel’s milk, poverty reduction, Jijiga, Somali Region, Ethiopia, sustainable development
    JEL: D24 D31 D61 D62 E22 E23 F35 Q01
    Date: 2014–01

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.