nep-agr New Economics Papers
on Agricultural Economics
Issue of 2014‒02‒21
eighteen papers chosen by
Angelo Zago
University of Verona

  1. Is there a farm-size productivity relationship in African agriculture ? evidence from Rwanda By Ali, Daniel Ayalew; Deininger, Klaus
  2. Economic Growth in the Euro-Med Area through Trade Integration: Focus on Agriculture and Food – The case of Turkey By Erol H. Cakmak; Hasan Dudu
  3. What Drives the Global 'Land Rush'? By Rabah Arezki; Klaus Deininger; Harris Selod
  4. Spatial targeting of agri-environmental policy and urban development By Thomas Coisnon; Walid Oueslati; Julien Salanié
  5. Credit constraints, agricultural productivity, and rural nonfarm participation : evidence from Rwanda By Ali, Daniel Ayalew; Deininger, Klaus; Duponchel, Marguerite
  6. IPARD in Macedonia, a Chance for Farmers and private Consultants By Kovachev, Goran
  7. EU sugar policy: A sweet transition after 2015 ? By Alison Burrell; Mihaly Himics; Benjamin Van Doorslaer; Pavel Ciaian; Shailesh Shrestha
  8. Decomposition of gender differentials in agricultural productivity in Ethiopia By Aguilar, Arturo; Carranza, Eliana; Goldstein, Markus; Kilic, Talip; Oseni, Gbemisola
  9. Land Inequality in a Coffee Economy: São Paulo During the Early Twentieth Century By Renato Colistete; Maria Lucia Lamounier
  10. Valuation of small and multiple health risks: A critical analysis of SP data applied to food and water safety By Andersson, Henrik; Risa Hole, Arne; Svensson, Mikael
  11. Are the EU trade preferences really effective? A generalized propensity score evaluation of the Southern Mediterranea countries’ case in Agriculture and Fishery By Pierluigi Montalbano; Silvia Nenci; Emiliano Magrini
  12. Inequality, neighborhoods and variation in prices By Abhimanyu Dadu; Namrata Gulati
  13. Reading the tea leaves on financial inclusion: The Case of rural labour households By S. Chandrasekhar
  14. Citizens' perceptions of justice in international climate policy: Empirical insights from China, Germany and the US By Schleich, Joachim; Dütschke, Elisabeth; Schwirplies, Claudia; Ziegler, Andreas
  15. Decentralized Regulation, Environmental Efficiency and Productivity By Ghosal, Vivek; Stephan , Andreas; Weiss, Jan
  16. Nutrition, information, and household behaviour: experimental evidence from Malawi By Emla Fitzsimons; Bansi Malde; Alice Mesnard; Marcos Vera-Hernandez
  17. When Banana Import Restrictions Lead to Exports: A Tale of Cyclones and Quarantine Policies By Chia Chiun Ko; Paul Frijters
  18. Econometric Modelling of Price Response by Alcohol Types to Inform Alcohol Tax Policies By Preety Srivastava; Keith R. McLaren; Michael Wohlgenant; Xueyan Zhao

  1. By: Ali, Daniel Ayalew; Deininger, Klaus
    Abstract: Whether the negative relationship between farm size and productivity that is confirmed in a large global literature holds in Africa is of considerable policy relevance. This paper revisits this issue and examines potential causes of the inverse productivity relationship in Rwanda, where policy makers consider land fragmentation and small farm sizes to be key bottlenecks for the growth of the agricultural sector. Nationwide plot-level data from Rwanda point toward a constant returns to scale crop production function and a strong negative relationship between farm size and output per hectare as well as intensity of labor use that is robust across specifications. The inverse relationship continues to hold if profits with family labor valued at shadow wages are used, but disappears if family labor is rather valued at village-level market wage rates. These findings imply that, in Rwanda, labor market imperfections, rather than other unobserved factors, seem to be a key reason for the inverse farm-size productivity relationship.
    Keywords: Wetlands,Labor Policies,Banks&Banking Reform,Climate Change and Agriculture,Agricultural Knowledge and Information Systems
    Date: 2014–02–01
  2. By: Erol H. Cakmak (TED University Ankara Turkey); Hasan Dudu (European Commission – JRC - IPTS)
    Abstract: In this study, we analyse the effects of trade liberalization, world price increase of basic staple and productivity growth in agricultural activities on Turkey by using a dynamic CGE model calibrated to 2008 data. The simulation results suggest that Turkish economy is capable of accommodating the adverse effects of trade liberalization. There are significant welfare gains if trade liberalization is accompanied by the CAP payments in the accession scenario. Trade policy turns out to be a strong instrument to stabilize the domestic prices and avoid the adverse effects of world price increase. Productivity increase in agri-food production has prominent effects on welfare and trade.
    Keywords: Trade Liberalization, Dynamic CGE Model, Agriculture, Turkey
    JEL: C68 D58 Q17 Q27
    Date: 2014–01
  3. By: Rabah Arezki; Klaus Deininger; Harris Selod
    Abstract: We review evidence regarding the size and evolution of the "land rush" in the wake of the 2007-2008 boom in agricultural commodity prices and study determinants of foreign land acquisition for large-scale agricultural investment. Using data on bilateral investment relationships to estimate gravity models of transnational land-intensive investments confirms the central role of agro-ecological potential as a pull factor but contrasts with standard literature insofar as quality of the destination country’s business climate is insignificant and weak tenure security is associated with increased interest for investors to acquire land in that country. Policy implications are discussed.
    Keywords: Land Acquisition, Large-Scale Agriculture, Foreign Investments, Agro-Ecological Potential, Land Availability, Land Governance, Property Rights
    JEL: F21 O13 Q15 Q34
    Date: 2014
  4. By: Thomas Coisnon (Granem - Groupe de Recherche ANgevin en Economie et Management - Agrocampus Ouest - Institut national de la recherche agronomique (INRA) : UMR49); Walid Oueslati (Granem - Groupe de Recherche ANgevin en Economie et Management - Agrocampus Ouest - Institut national de la recherche agronomique (INRA) : UMR49); Julien Salanié (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I)
    Abstract: Widespread public support exists for the provision of natural amenities, such as lakes, rivers or wetlands, and for efforts to preserve these from agricultural pollution. Agri-environmental policies contribute to these efforts by encouraging farmers to adopt environmentally friendly practices within the vicinity of these ecosystems. A spatially targeted agri-environmental policy promotes natural amenities and may thereby affect household location decisions. The purpose of this paper is to investigate the extent of these impacts on the spatial urban structure. We extend a monocentric city model to include farmers' responses to an agri-environmental policy. Our main findings are that the implementation of a spatially targeted agrienvironmental policy may lead to some additional urban development, which could conflict with the aim of the policy.
    Keywords: Land development; Urban sprawl; Leapfrog; Land rent; Monocentric model; Farming; Agri-environmental policy; Spatial targeting; Agricultural pollution
    Date: 2014–02–11
  5. By: Ali, Daniel Ayalew; Deininger, Klaus; Duponchel, Marguerite
    Abstract: Although the potentially negative impacts of credit constraints on economic development have long been discussed conceptually, empirical evidence for Africa remains limited. This study uses a direct elicitation approach for a national sample of Rwandan rural households to assess empirically the extent and nature of credit rationing in the semi-formal sector and its impact using an endogenous sample separation between credit-constrained and unconstrained households. Being credit constrained reduces the likelihood of participating in off-farm self-employment activities by about 6.3 percent while making participation in low-return farm wage labor more likely. Even within agriculture, elimination of all types of credit constraints in the semi-formal sector could increase output by some 17 percent. Two suggestions for policy emerge from the findings. First, the estimates suggest that access to information (education, listening to the radio, and membership in a farm cooperative) has a major impact on reducing the incidence of credit constraints in the semi-formal credit sector. Expanding access to information in rural areas thus seems to be one of the most promising strategies to improve credit access in the short term. Second, making it easy to identify land owners and transfer land could also significantly reduce transaction costs associated with credit access.
    Keywords: Banks&Banking Reform,Economic Theory&Research,Debt Markets,Bankruptcy and Resolution of Financial Distress,Financial Intermediation
    Date: 2014–02–01
  6. By: Kovachev, Goran
    Abstract: European perspective of Macedonian agriculture and rural development became viable on 17th of December 2005, with Macedonia gaining candidate status for European Union (EU) membership. The new outlook allowed the Country access to the Union’s Instrument for Pre-Accession Assistance in Rural Development (IPARD). This Instrument is a major chance for Macedonian farmers and private consultants to understand how EU agriculture and rural development works.
    Keywords: IPARD; Macedonian agriculture; EU; farmers; private consultants
    JEL: G23 H81 Q14
    Date: 2014–02–07
  7. By: Alison Burrell; Mihaly Himics (Institute for Food and Resource Economics, Bonn University, Germany); Benjamin Van Doorslaer (European Commission – JRC - IPTS); Pavel Ciaian (European Commission – JRC - IPTS); Shailesh Shrestha (Scottish Agricultural College)
    Abstract: This report compares the production and market outcomes of two alternative policy scenarios, namely expiry of EU sugar quotas in 2015/16 and extension of the current sugar quota scheme. All other EU policy measures pertaining to the sugar sector, and to agriculture more generally, are assumed the same in both scenarios. The year of comparison is 2020. The CAPRI model was used for the simulations. The report begins with a description of sugar production within the EU, and outlines the policies applied in the sugar sector within the EU’s Common Agricultural policy. This is followed by a description of the EU sugar market. A theoretical model is used to summarise the main functional relationships in the EU sugar market and related markets, and the EU’s trade in sugar, from which a number of theory-based predictions about the impacts of quota expiry are derived. Isoglucose quotas will expire along with sugar quotas, and there is much speculation about the extent of potential competitive substitution between the two sweeteners. Sensitivity analysis was performed to obtain greater insight into this issue. Two additional quota-expiry scenarios were run, in which isoglucose was assumed to take a 10% and a 20% share of the sweetener market at the expense of sugar. The main findings are: production of sugar beet and white sugar increases by around 4%; there is little net impact on the production of cereals; total ethanol production hardly changes, but the importance of sugar as an ethanol feedstock declines by a few percentage points; raw sugar imports from high-cost third countries decline very substantially, but those from the low-cost producer Brazil decrease only slightly; EU sugar exports fall; EU human consumption of sugar increases only marginally, despite a fall of 15-16% in beet prices for sugar for internal human consumption; there is a very small positive welfare change, although income accruing to sugar beet producers falls by over 17%.
    Keywords: Economic analysis, impact assessment, Common Agricultural Policy, sugar quota, agricultural trade, competitiveness
    JEL: F14 Q02 Q11 Q18
    Date: 2014–01
  8. By: Aguilar, Arturo; Carranza, Eliana; Goldstein, Markus; Kilic, Talip; Oseni, Gbemisola
    Abstract: This paper employs decomposition methods to analyze differences in agricultural productivity between male and female land managers in Ethiopia. It employs data from the 2011-2012 Ethiopian Rural Socioeconomic Survey. An overall 23.4 percent gender differential in agricultural productivity is estimated at the mean in favor of male land managers, of which 10.1 percentage points are explained by differences in land manager characteristics, land attributes, and unequal access to resources (the endowment effect). The remaining 13.4 percentage points are explained by unequal returns to productive components, but cannot be easily tied to specific covariates. These results are mainly driven by non-married female managers (mainly single and divorced). Married female managers do not display such disadvantages. Further analysis along the productivity distribution reveals that gender differentials are more pronounced at mid-levels of productivity and that the share of the gender gap explained by the endowment effect declines as productivity increases. Detailed decomposition of estimates at selected points of the agricultural productivity distribution provides valuable information for policy intervention purposes.
    Keywords: Rural Development Knowledge&Information Systems,Gender and Development,Housing&Human Habitats,Labor Policies,Gender and Health
    Date: 2014–01–01
  9. By: Renato Colistete; Maria Lucia Lamounier
    Abstract: This article examines the distribution of land ownership in the northeastern part of the state of São Paulo, Brazil, the leading coffee export region in the world during the early twentieth century. Based on a detailed agricultural census, we find a widespread presence of small and medium-size farms, with varied degrees of land concentration across subregions and municipalities. Still, large farms and latifundia controlled most of the productive resources in northeast São Paulo, resulting in high levels of inequality when compared to those of other export regions in South and North America.
    Keywords: Land Inequality; Coffee; São Paulo; Brazil
    JEL: N5 N50 Q15
    Date: 2014–02–06
  10. By: Andersson, Henrik (Toulouse School of Economics); Risa Hole, Arne (University of Sheffield); Svensson, Mikael (Dept. of Economics)
    Abstract: This study elicits individual preferences for reducing morbidity and mortality risk in the context of an infectious disease (campylobacter) using choice experiments. Respondents are in the survey asked to choose between different policies that, in addition to the two health risks, also vary with respect to source of disease being targeted (food or water), when the policy takes place (in time), and the monetary cost. Our results in our baseline model are in line with expectations; respondents prefer the benefits of the program sooner than later, programs that reduce both the mortality and morbidity risk, and less costly programs. Moreover, our results suggest that respondents prefer water- compared with food-safety programs. However, a main objective of this study is to examine scope sensitivity of mortality risk reductions using a novel approach. Our results from a split-sample design suggest that the value of the mortality risk reduction, defined as the value of a statistical life, is SEK 3 177 (USD 483 million) and SEK 50 million (USD 8 million), respectively, in our two sub-samples. This result cast doubt on the standard scope sensitivity tests in choice experiments, and the results also cast doubt on the validity and reliability of VSL estimates based on stated preference (and revealed preference) studies in general. This is important due to the large empirical literature on non-market evaluation and the elicited values’ central role in policy making, such as benefit-cost analysis.
    Keywords: Choice experiments; Morbidity risk; Mortality risk; Scope sensitivity; Willingness to pay
    JEL: D61 H41 I18 Q51
    Date: 2014–02–06
  11. By: Pierluigi Montalbano; Silvia Nenci; Emiliano Magrini
    Keywords: international trade, EU-MED integration, Preferential trade agreement, impact evaluetion, matching econometrics
    JEL: C21 F10 F13 F15
    Date: 2014–01
  12. By: Abhimanyu Dadu (Indira Gandhi Institute of Development Research); Namrata Gulati (Indira Gandhi Institute of Development Research)
    Abstract: In this study we examine the link between of income distribution and wholesale price of wheat using panel data. We have weekly time series data on prices for wheat for 3 districts in Uttar-Pradesh in India obtained from the Department of Economics and Statistics of the Ministry of Agriculture, Government of India (DES-MOA, GOI) for the period 2006-2011. Gini coefficient is calculated on the basis of consumption expenditure collected by National Sample Survey Organisation of India. We find that there is inverted-U shape relation between inequality and level of price for wheat: if we compare a cross-section of societies over the period of time, then price of food grain initially increases with increase in inequality but after a point it starts declining.
    Keywords: Kalman Filter, Inequality, Prices, Neighborhood, Panel
    JEL: O12 D12 D31
    Date: 2014–01
  13. By: S. Chandrasekhar (Indira Gandhi Institute of Development Research)
    Abstract: Understanding the extent of financial inclusion of rural labour households is important since in the intercensal period 2001-11, the proportion of agricultural labourers in the workforce increased by 3.5 percentage points. This paper examines progress in financial inclusion using information on indebtedness of rural labour households collected by NSSO as part survey of employment and unemployment conducted in 2004-05 and 2009-10. It is estimated that 22.3 million out of the nearly 66 million rural labour households report being in debt in 2009-10. The share of formal institutions in outstanding debt of rural labour households increased from 29 percent to 37 percent while the share of money lender decreased from 44 percent to 33 percent during this period. There has been a near doubling of loans sourced from cooperative societies and a 77 percent increase in loans sourced from banks. In contrast, outstanding debt on account of borrowing from money lender increased by a meagre 1.7 percent. One does not have a ready explanation for the miniscule growth in outstanding loans from money lenders. What is promising is that the reliance on institutional sources among rural labour households without cultivable land increased from 20.6 percent to 26 percent. The aggregate picture however masks large variations across the states of India and one does not observe any structural change in geographical distribution of flow of credit and share of outstanding advances to the landless.
    Keywords: Financial Inclusion, Rural Labour Household, Formal Credit Markets
    JEL: G21 O16 O17
    Date: 2014–01
  14. By: Schleich, Joachim; Dütschke, Elisabeth; Schwirplies, Claudia; Ziegler, Andreas
    Abstract: Relying on a recent survey of more than 3300 participants from China, Germany and the US, this paper empirically analyzes citizens' perceptions of climate change and climate policy, focusing on key guiding principles for sharing mitigation costs across countries. The ranking of the main principles for burden-sharing is identical in China, Germany and the US: accountability followed by capability, egalitarianism, and sovereignty. Thus, on a general level, citizens across these countries seem to have a common understanding of fairness. We therefore find no evidence that citizens' (stated) fairness preferences are detrimental to future burden-sharing agreements. While there is heterogeneity in citizens' perceptions of climate change and climate policy within and across countries, a substantial portion of citizens in all countries perceive a lack of transparency, fairness, and trust in international climate agreements. --
    Keywords: climate policy,climate change,burden-sharing,equity,fairness,distributive justice,trust,public opinion
    Date: 2014
  15. By: Ghosal, Vivek (Georgia Institute of Technology (Atlanta), European Business School (Wiesbaden), and CESifo (Munich).); Stephan , Andreas (CESIS Stockholm and Jönköping International Business School); Weiss, Jan (Jönköping International Business School)
    Abstract: Using a unique plant-level dataset we examine green productivity growth in Sweden’s heavily regulated pulp and paper industry, which has historically been a significant contributor to air and water pollution. Our exercise is interesting as Sweden has a unique regulatory structure where plants have to comply with national environmental regulatory standards and enforcement, along with decentralised plant-specific regulations. In our analysis, we use the sequential Malmquist-Luenberger productivity index which accounts for air and water pollutants as undesirable outputs. Some of our key findings are: (1) regulation has stimulated technical change related to pollution control, and has induced plants to catch up with the best-practice technology frontier with regard to effluent abatement; (2) large plants are more heavily regulated than small plants; (3) plants in environmentally less sensitive areas or those with local importance as employer face relatively lenient regulatory constraints; (4) environmental regulations trigger localized knowledge spillovers between nearby plants, boosting their green TFP growth.
    Keywords: TFP; DEA; Sequential Malmquist-Luenberger productivity index; pulp and paper industry; pollution; environmental regulations; enforcement; plant-specific regulation; productivity; Porter hypothesis
    JEL: D24 L51 L60 Q52 Q53 Q58
    Date: 2014–02–10
  16. By: Emla Fitzsimons (Institute for Fiscal Studies and Institute of Education, University of London); Bansi Malde (Institute for Fiscal Studies); Alice Mesnard (Institute for Fiscal Studies); Marcos Vera-Hernandez (Institute for Fiscal Studies and University College London)
    Abstract: Incorrect knowledge of the health production function may lead to inefficient household choices, and thereby to the production of suboptimal levels of health. This paper studies the effects of a randomised intervention in rural Malawi which, over a six-month period, provided mothers of young infants with information on child nutrition without supplying any monetary or in-kind resources. A simple model first investigates theoretically how nutrition and other household choices including labour supply may change in response to the improved nutrition knowledge observed in the intervention areas. We then show empirically that, in line with this model, the intervention improved child nutrition, household consumption and consequently health. These increases are funded by an increase in male labor supply. We consider and rule out alternative explanations behind these findings. This paper is the first to establish that non-health choices, particularly parental labor supply, are affected by parents’ knowledge of the child health production function.
    Date: 2014–01
  17. By: Chia Chiun Ko (School of Economics, The University of Queensland); Paul Frijters (School of Economics, The University of Queensland)
    Abstract: This paper examines the welfare loss of import restrictions on bananas in Australia and whether the import restrictions have turned into a particular form of export promotion. We set up a model in which there is free domestic entry, with banana producers accepting losses in normal years, off-set by large profits in years when cyclones destroy a large proportion of the banana plants because of sufficiently low elasticity of demand. Using the cyclones of 2006 and 2011 as exogenous events, we identify the elasticity of demand for bananas in Australia to be around -0.5. We indeed find limited evidence for an ‘over-shooting’ in terms of the supply response after these cyclones, leading to positive exports years after cyclones have hit and re-planted banana plants have become productive. Combining the elasticity estimates with information on turnover, we get an estimated welfare loss of 600 million dollars per year due to banana import restrictions.
    Date: 2014–02–13
  18. By: Preety Srivastava; Keith R. McLaren; Michael Wohlgenant; Xueyan Zhao
    Abstract: The paper presents estimates of price elasticities of demand for twelve disaggregated alcohol beverages in Australia: premium beer, full strength beer, low alcohol beer, and mid strength beer; red bottled wine, white bottled wine, sparkling wine, cask wine, and dark and light ready-to-drink (RTD); and dark and light spirits. These disaggregated categories correspond closely to the commodities of interest to public policymakers with respect to taxation and health policies. The system of demand equations is estimated with Nielsen data from Australia using the semiflexible AIDS model in order to impose negative semidefiniteness on the demand parameters. Results indicate elastic own-price elasticities for virtually all commodities. Morishma elasticities of substitution indicate premium beer, mid strength beer, and cask wine exhibit the largest elasticities of substitution. Low alcohol beer, light RTD, and light spirits show the lowest substitution. The elasticity estimates are used to illustrate the effect of a change in the current tax system toward taxation equalisation based on alcohol content. The policy simulation highlights the importance of having a complete system of demand elasticities because the mix of consumption of alcohol beverages changes in response to the type of alcohol policy.
    Keywords: alcohol, demand system, elasticities, semiflexible AIDS, tax.
    Date: 2014

This nep-agr issue is ©2014 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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.