nep-agr New Economics Papers
on Agricultural Economics
Issue of 2014‒01‒24
thirteen papers chosen by
Angelo Zago
University of Verona

  1. CAPRI long-term climate change scenario analysis: The AgMIP approach By Heinz-Peter Witzke; Pavel Ciaian; Jacques Delince
  2. Risk, Insurance and Wages in General Equilibrium By Ahmed Mushfiq Mobarak; Mark Rosenzweig
  3. Global Availability of Phosphorus and Its Implications for Global Food Supply: An Economic Overview By Markus Heckenmüller; Daiju Narita; Gernot Klepper
  4. On the impact of microcredit: Evidence from a randomized intervention in rural Ethiopia By Alessandro Tarozzi; Jaikishan Desai; Kristin Johnson
  5. Rainfall Forecasts, Weather and Wages over the Agricultural Production Cycle By Mark R. Rosenzweig; Christopher Udry
  6. Farmland Investments in Africa: What’s the Deal? By Di Corato, Luca; Hess, Sebastian
  7. The Legal Framework of Vietnam’s Water Sector: Update 2013 By Nguyen, Thi Phuong Loan
  8. Poverty reduction and investing in people : the new role of safety nets in Africa experiences from 22 countries By Monchuk, Victoria
  9. In search of appropriate institutions for forest management By Keijiro Otsuka; Ridish Pokharel
  10. Farmland Ownership Restrictions: Between a Rock and a Hard Place By Bell, Peter N
  11. Crop failures and export tariffs By Baake, Pio; Huck, Steffen
  12. Towards a diagnostic approach to climate adaptation for fisheries. By Leith, Peat; Ogier, Emily; Pecl, Gretta; Hoshino, Eriko; Davidson, Julie; Haward, Marcus
  13. Household Decision-Making and Valuation of Environmental Health Risks to Parents and their Children By Wiktor Adamowicz; Mark Dickie; Shelby Gerking; Marcella Veronesi; David Zinner

  1. By: Heinz-Peter Witzke (Bonn University); Pavel Ciaian (European Commission (DG Joint Research Center)); Jacques Delince (European Commission (DG Joint Research Center))
    Abstract: The current paper investigates the long-term global effects of crops productivity changes under different climate scenarios and the impact of biofuels expansion using the Common Agricultural Policy Regionalised Impact (CAPRI) model. These analyses are conducted in the framework of the AgMIP project (Agricultural Model Intercomparison and Improvement Project). The results indicate that globally there will be both winners and losers, with some regions benefitting from agricultural production adjustment as a result of climate change whilst most regions suffering losses in production and consumption. Biofuel expansion leads to land relocation away from crop agricultural commodity production to new energy crops which is reflected in lower production levels of agricultural commodities and higher agricultural prices.
    Keywords: Climate Change, Lung-run modelling, Agriculture, Productivity, Biofuels
    JEL: Q02 Q11 Q54
    Date: 2014–01
  2. By: Ahmed Mushfiq Mobarak; Mark Rosenzweig
    Abstract: We estimate the general-equilibrium labor market effects of a large-scale randomized intervention in which we designed and marketed a rainfall index insurance product across three states in India. Marketing agricultural insurance to both cultivators and to agricultural wage laborers allows us to test a general-equilibrium model of wage determination in settings where households supplying labor and households hiring labor face weather risk. Consistent with theoretical predictions, we find that both labor demand and equilibrium wages become more rainfall sensitive when cultivators are offered rainfall insurance, because insurance induces cultivators to switch to riskier, higher-yield production methods. The same insurance contract offered to agricultural laborers smoothes wages across rainfall states by inducing changes in labor supply. Policy simulations based on our estimates suggest that selling insurance only to land-owning cultivators and precluding the landless from the insurance market (which is the current regulatory practice in India and other developing countries), makes wage laborers worse off relative to a situation where insurance does not exist at all.
    JEL: J2 O13 O16 O17 Q12
    Date: 2014–01
  3. By: Markus Heckenmüller; Daiju Narita; Gernot Klepper
    Abstract: Being of crucial importance for agricultural production and also having experienced significant price volatility, phosphate and its future availability have drawn growing at-tention from both academics and the public over the last years. This paper overviews the recent literature and data on the availability of phosphorus and discusses the eco-nomic aspects of phosphate scarcity by describing major price determinants of the global phosphate market. We show that past price fluctuations of phosphate rock and phosphate fertilisers are not a reflection of physical phosphate rock depletion but rather attributable to numerous other demand- and supply-side factors. Given the current re-serve estimates for phosphate rock, neither an exhaustion of global reserves nor a peak event is likely to occur within this century. However, these estimates are subject to a significant degree of uncertainty. Moreover, the global distribution of phosphate production and reserves is highly skewed and has the potential to pose a threat to food security in developing countries through factors such as the volatility of the phosphate rock price or price setting by suppliers with significant market power
    Keywords: Phosphate scarcity, peak phosphorus, global food security, phosphate market, fertilizers
    JEL: Q11 Q18
    Date: 2014–01
  4. By: Alessandro Tarozzi; Jaikishan Desai; Kristin Johnson
    Abstract: We use data from a randomized controlled trial conducted in 2003-2006 in rural Amhara and Oromiya (Ethiopia) to study the impacts of the introduction of microfinance in treated communities. We document that borrowing increased substantially in locations where the programs started their operations, but we find mixed evidence of improvements in a number of socio-economic outcomes, including income from agriculture, animal husbandry, non-farm self-employment, schooling and indicators of women's empowerment.
    Keywords: Microcredit; Cluster Randomized Controlled Trial; Ethiopia
    JEL: O12 O16
    Date: 2013–10
  5. By: Mark R. Rosenzweig; Christopher Udry
    Abstract: We look at the effects of rainfall forecasts and realized rainfall on equilibrium agricultural wages over the course of the agricultural production cycle. We show theoretically that a forecast of good weather can lower wages in the planting stage, by lowering ex ante out-migration, and can exacerbate the negative impact of adverse weather on harvest-stage wages. Using Indian household panel data describing early-season migration and district-level planting- and harvest-stage wages over the period 2005-2010, we find results consistent with the model, indicating that rainfall forecasts improve labor allocations on average but exacerbate wage volatility because they are imperfect.
    JEL: J2 J31 J43 O1 O13 Q12
    Date: 2014–01
  6. By: Di Corato, Luca (Department of Economics, Swedish University of Agricultural Sciences); Hess, Sebastian (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: Large-scale foreign investments in African farmland are rising and may contribute to agricultural productivity growth and economic development. However, host countries sometimes have to wait longer for the economic bene…ts to arrive than initially expected. In this respect, the timing of project development is crucial and depends on the economic incentives provided to the investors. We therefore present a dynamic stochastic programming model that re‡ects the typical bargaining situation concerning large land deals in Africa and allows the e¤ect of market- and country-speci…c risks and taxation to be assessed. The model shows that commodity price volatility increases the value of the land development option, but slows down the land development process. Furthermore, it shows that host country attempts to negotiate …xed commitments to the speed of project development may run counter to the structure of economic incentives at the project site. The applicability of the model is demonstrated for a recent 10,000-hectare cotton project in Ethiopia. Response surface estimations suggest that Ethiopia has negotiated a contract under which it will receive about half the expected total project value, as long as it levies the regular corporate tax rate.
    Keywords: foreign direct investment; land leasing; real options; nash bargaining
    JEL: C61 D81 F23 Q24 Q58
    Date: 2013–12–13
  7. By: Nguyen, Thi Phuong Loan
    Abstract: In order to deal with problems related to both water quality and quantity as well as to strengthen the sustainable and integrative management of the nation’s water resources, the Vietnamese Government has adopted a wide spectrum of laws and regulations. In recent years, more than 300 water related regulations on the guidance and implementation of the Law on Water Resources have been issued and often amended to meet the requirements of the country’s development and its increasing international integration. In spite of this, the current legal framework for water resources management in Vietnam remains ineffective and does not correspond with the reality on the ground. Furthermore, law enforcement is deficient and often national regulations are ignored by local authorities, who priorities rapid growth of their communities over sustainability. Under these circumstances, the legal framework cannot properly guide sustainable use of water resources in order to achieve a degree of environmentally sustainable and, in particular, to protect the livelihoods of marginalized groups in society, such as landless fishermen, small-holders or poor people in periurban areas. Despite the gaps in this legal framework, water-related policies and programs in Vietnam consistently refer back to it while, at the same time, policy advisors typically call for reform. Understanding the legal framework is therefore important for both researchers and practitioners. In this view, a previous study was carried out by the author, entitled ‘Legal Framework of the Water Sector in Vietnam’ (Nguyen 2010), which aimed at presenting the key dimensions and the structure of that framework. Both the Vietnamese and the English version of the book were widely disseminated. This update became necessary because the government of Vietnam recently issued a new law on water resources as well as supplementary legislation. So far, no official English version of any of these new documents exists. Therefore, a detailed presentation of the contents of the laws is particularly timely. In addition to presenting the laws, this paper aims at shedding light on some of the critical aspects of the current legislation and illustrates how the law making process proceeded.
    Keywords: Environmental impact assessment (EIA), regulatory impact assessment (RIA), integrated water resource management(IWRM), law on water resources, law making process, Mekong Delta,Vietnam, water quality management, water resources management
    JEL: K23 K4 L5 L52 Q53 Q54 Q56 Q58
    Date: 2013–08
  8. By: Monchuk, Victoria
    Abstract: Safety nets are on the rise in Africa, and beginning to evolve from scattered standalone programs into systems. Until recently, many African countries approached social protection on an ad-hoc basis. But when the global crisis threatened recent progress in poverty reduction, safety nets increasingly began to be viewed as core instruments for poverty reduction in the region. Social protection programming has started to develop from emergency food aid programs to one-off interventions to regular and predictable safety nets, such as targeted cash transfers and cash-for-work programs. Some countries, such as Kenya, Mozambique, Rwanda and Tanzania, now seek to consolidate programs into national systems. But as our review shows, there is still a long way to go.
    Keywords: Safety Nets and Transfers,Labor Policies,Regional Economic Development,Rural Poverty Reduction,Social Protections&Assistance
    Date: 2013–11–01
  9. By: Keijiro Otsuka (National Graduate Institute for Policy Studies); Ridish Pokharel (Institute of Forestry, Tribhuvan University, Pokhara, Nepal)
    Abstract: There is a variety of forest management institutions ranging from state management to community and private management. This article attempts to identify the conditions under which one institution outperforms the others in the efficiency of forest management based on a review of the literature, empirical evidence on the dominant forest management institutions, and theoretical arguments. In conclusion, we argue that the community management system performs best for non-timber forests, whereas a mixed management system, in which forest protection is carried out communally and tree management is carried out individually, is likely to work best for timber forests.
    Date: 2014–01
  10. By: Bell, Peter N
    Abstract: This paper explores unintended consequences of policy that restricts land ownership. I describe certain farmland investment funds that are active in Canada, policy in the Province of Saskatchewan that has restricted ownership since 1974, and how the two are related. I argue that global economic conditions from 1974-2002 created pent-up demand for Saskatchewan farmland, which led to growth in farmland investment after the restrictions were relaxed in 2002. I describe how this situation could repeat itself in the future and put policy makers into a tough situation.
    Keywords: Farm, Land, Ownership, Policy, Saskatchewan, Canada
    JEL: A1 Q14 Q15
    Date: 2014
  11. By: Baake, Pio; Huck, Steffen
    Abstract: We analyse a stylized model of the world grain market characterized by a small oligopoly of traders with market power on both the supply and demand side. Crops are stochastic and exporting countries can impose export tariffs to protect domestic food prices. Our first result is that export tariffs are strategic complements and that for poor harvests equilibrium tariffs can explode (shedding some light on recent volatility in world food prices). We also show that the strategic interplay between governments of export countries and traders can give rise to a number of peculiar comparative statics. For example, it can be in the interest of traders to have poor harvests in one of the countries. Finally, we demonstrate that traders as well as consumers in import countries can benefit from cooperation between grain exporting countries. -- In diesem Paper analysieren wir ein stilisiertes Modell des weltweiten Getreidemarktes, auf dem ein Oligopol von Händlern sowohl auf der Angebots- wie auf der Nachfrageseite über Marktmacht verfügt. Da Erntemengen stochastisch sind, können die exportierenden Länder Exportzölle festlegen, um die einheimischen Lebensmittelpreise abzusichern. Als erstes Resultat zeigt sich, dass Exportzölle strategisch komplementär sind, so dass etwa bei mageren Ernten Zölle explodieren können (dies sollte etwas Licht auf die derzeitige Volatilität bei den weltweiten Lebensmittelpreisen werfen). Weiterhin zeigt sich, dass das strategische Zusammenspiel zwischen Regierungen von Exportländern und Händlern zu einer Reihe eigentümlicher komparativ-statischer Effekte führen kann - so kann beispielsweise eine kleine Ernte in einem der Länder durchaus im Interesse der Händler sein. Schließlich zeigen wir, dass Händler wie Konsumenten in Importländern von der Kooperation zwischen getreideexportierenden Ländern profitieren können.
    Keywords: grain markets,food prices,export tariffs,oligopoly and oligopsony
    JEL: D43 F12 L13 Q17
    Date: 2013
  12. By: Leith, Peat (Adaptation Research Network for Marine Biodiversity and Resources, University of Tasmania); Ogier, Emily (IMAS Fisheries, Aquaculture & Coasts Centre (FACC), University of Tasmania); Pecl, Gretta (IMAS Fisheries, Aquaculture & Coasts Centre (FACC), University of Tasmania); Hoshino, Eriko (School of Economics and Finance, University of Tasmania); Davidson, Julie (School of Geography and Environmental Studies, University of Tasmania); Haward, Marcus (IMAS Marine & Antarctic Futures Centre (MAFC), University of Tasmania)
    Abstract: A diagnostic approach to climate change adaptation for fisheries is proposed to define potential climate adaptation pathways in well-managed fisheries. Traditional climate vulnerability and risk assessments tend to focus on biophysical threats and opportunities and thereby what needs to be done to adapt to climate change. Our diagnostic approach moves from such analysis to focus on how the processes of adaptation and development of adaptive capacity can be structured to achieve desired outcomes. Using a well-grounded framework, the diagnostic approach moves fi•om system description to characterization of challenges and opportunities, through two stages of analysis and validation, to the definition and embedding of adaptation options and pathways. The framework can include all contextually relevant variables and accommodate evaluation of adaptation outcomes and comparisons across scales and contexts. Such an approach can serve as a basis for enabling stakeholders to identify challenges and opportunities, and to explore and prioritize options for development and implementation of legitimate adaptation pathways.
    Keywords: collaborative management, adaptation, climate change, fisheries, diagnostic approach, governance Note:
    Date: 2013–11–01
  13. By: Wiktor Adamowicz; Mark Dickie; Shelby Gerking; Marcella Veronesi; David Zinner
    Abstract: This paper empirically discriminates between alternative household decisionmaking models for estimating parents’ willingness to pay for health risk reductions for their children as well as for themselves. Models are tested using data pertaining to heart disease from a stated preference survey involving 432 matched pairs of parents married to one another. Analysis is based on a collective model of parental resource allocation that incorporates household production of perceived health risks and allows for differences in preferences and risk perceptions between parents. Results are consistent with Pareto efficiency within the household, which implies that (1) for a given proportionate reduction in health risk, parents are willing to pay the same amount of money at the margin to protect themselves and the child; and (2) parents’ choices about proportionate health risk reductions for their children are based on household valuations, rather than their own individual valuations. Results also suggest that the marginal willingness to pay of mothers and fathers for health risk protection is sensitive to a shift in intra-household decision-making power between parents.
    Keywords: household decision-making, collective household model, non-cooperative household model, unitary household model, Pareto efficiency, environmental health risks to parents and children, willingness to pay, matched sample of mothers and fathers
    JEL: D13 D61 I12 I38 J13 Q51
    Date: 2013–12

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