New Economics Papers
on Agricultural Economics
Issue of 2014‒08‒09
nineteen papers chosen by

  1. Drought Management Plans and Water Availability in Agriculture. A Risk Assessment Model for a Southern European Basin By Carlos Dionisio Pérez Blanco; Carlos Mario Gómez Gómez
  2. An Integrated Risk Assessment Model for the Implementation of Drought Insurance Markets in Spain By Carlos Dionisio Pérez Blanco; Carlos Mario Gómez Gómez
  3. The South African Bio ethanol blend mandate and its implications on regional agricultural markets and welfare By Sukati, Mphumuzi
  4. The Dynamics of Rural Non-farm Employment in India: Gender, Agricultural Productivity, and Literacy By Alok Kumar; Kam Shergill
  5. Climate variability and household welfare in northern Ghana By Nkegbe, Paul Kwame; Kuunibe, Naasegnibe
  6. The impact of climate change on pastoral production systems: A study of climate variability and household adaptation strategies in southern Ethiopian rangelands By Berhanu, Wassie; Beyene, Fekadu
  7. Rainfall risk and religious membership in the late Nineteenth-Century United States By Philipp Ager; Antonio Ciccone
  8. Wine historical statistics: A quantitative approach to its consumption, production and trade, 1840-1938 By Vicente Pinilla
  9. Optimum fisheries management under climate variability: Evidence from artisanal marine fishing in Ghana By Akpalu, Wisdom; Dasmani, Isaac; Normanyo, Ametefee K.
  10. Australian–Indonesian Live Cattle Trade—What Future? By Ray Trewin
  11. Free to Choose: Promoting Conservation by Relaxing Outdoor Watering Restrictions By Anita Castledine; Klaus Moeltner; Michael Price; Shawn Stoddard
  12. How institutions shape land deals: The role of corruption By Bujko, Matthias; Fischer, Christian; Krieger, Tim; Meierrieks, Daniel
  13. The economic impact of climate change on road infrastructure in sub-Saharan Africa countries: Evidence from Ghana By Twerefou, Daniel Kwabena; Adjei-Mantey, Kwame; Strzepek, Niko Lazar
  14. The effect of climate change on economic growth: Evidence from Sub-Saharan Africa By Alagidede, Paul; Adu, George; Frimpong, Prince Boakye
  15. Collective Action and Armed Group Presence in Colombia By Margarita Gáfaro; Ana Maria Ibáñez; Patricia Justino
  16. Programs, Prices and Policies Towards Energy Conservation and Environmental Quality in China By ZhongXiang Zhang
  17. What drives environmental practices of SMEs? By Brigitte Hoogendoorn; Peter van der Zwan; Daniela Guerra
  18. Optimally Differentiated Carbon Prices for Unilateral Climate Policy By Stefan Boeters
  19. Bidding for Conservation Contracts By Author-Name: Luca Di Corato; Cesare Dosi; Michele Moretto

  1. By: Carlos Dionisio Pérez Blanco (University of Alcalá de Henares and Madrid Institute for Advanced Studies in Water Technologies (IMDEA-Water)); Carlos Mario Gómez Gómez (University of Alcalá de Henares and Madrid Institute for Advanced Studies in Water Technologies)
    Abstract: The Drought Management Plans (DMPs) are a regulatory instrument that establishes priorities among the different water uses and defines more stringent constraints to access to publicly provided water during droughts, especially for non-priority uses such as agriculture. These plans have recently become widespread across EU southern basins. Shockingly, in some of these basins the plans were approved without an assessment of the potential impacts that they may have over the economic activities exposed to water restrictions. This paper develops a stochastic methodology to estimate the expected water availability in agriculture that results from the decision rules of the recently approved DMPs. The methodology is applied to the particular case of the Guadalquivir River Basin in southern Spain. Results show that if the DMPs are successfully enforced, available water will satisfy in average 62.2% of the annual demand. This is much lower than the minimum water access reliability of 90% that the Spanish law has assured to irrigators so far.
    Keywords: Agricultural Economics, Water Economics, Risk Management, Guadalquivir River Basin.
    JEL: Q1 Q25
    Date: 2014–06
  2. By: Carlos Dionisio Pérez Blanco (University of Alcalá de Henares and Madrid Institute for Advanced Studies in Water Technologies (IMDEA-Water)); Carlos Mario Gómez Gómez (University of Alcalá de Henares and Madrid Institute for Advanced Studies in Water Technologies (IMDEA-Water))
    Abstract: Water is a key input in the production of many goods and services and under certain conditions can become a critical limiting factor with significant impacts on regional development. This is the case of many agricultural European Mediterranean basins, where water deficit during drought events is partially covered by illegal abstractions, mostly from aquifers, which are tolerated by the authorities. Groundwater overexploitation for irrigation has created in these areas an unprecedented environmental catastrophe that threatens ecosystems sustainability, urban water supply and the current model of development. Market-based drought insurance systems have the potential to introduce the necessary incentives to reduce overexploitation during drought events and remove the high costs of the drought indemnity paid by the government. This paper develops a methodology to obtain the optimum risk premium based on concatenated stochastic models. The methodology is applied to the agricultural district of Campo de Cartagena (Segura River Basin, Spain). Results show that the prices in a hypothetic competitive private drought insurance market would be reasonable and the expected environmental outcomes significant.
    Keywords: Drought Insurance, Stochastic Models, Groundwater, Agriculture, Drought Contingency Plan
    JEL: Q5 Q25
    Date: 2014–07
  3. By: Sukati, Mphumuzi
    Abstract: The paper aims to analyse the potential impact of South African Biothanol Blend mandate on SACU region’s maize and sugar production (referred to as bioethanol crops commodities), trade and overall welfare outcomes. The study has been necessitated by the importance of maize as a staple food for the Southern African region and the importance of sugar to some of the SACU countries’ economies especially that of Swaziland. The simulation experiment has been an artificial decrease in cereal and sugar cane output in South Africa due to their diversion to bioethanol production, with a corresponding increase in petroleum output by a factor proportional to the blend mandate in place. This simulation has been undertaken using the GTAP7 model and database. Simulations results show that South African production of bioethanol and its blending to fuel will not result in major negative welfare changes in South Africa. However, production of bieothanol from maize negatively affects the rest of SACU member states in terms of welfare outcome and cereal prices. On the other hand, South Africa experience the most welfare benefits from maize based bioethanol. Production of bioethanol from sugar cane improves welfare in the rest of SACU region, such welfare envisaged to accumulate more to Swaziland, one of the region’s major low cost sugar producer and exporter. Bioethanol crops commodities industry output and trade changes for the rest of SACU member states trend with the level of commitment of that commodity in the South African bioethanol production and blending programme as expected.
    Keywords: Bioethanol Blend Mandate, GTAP 7, Welfare Outcomes
    JEL: F1 F13 O13 Q1 Q16 Q2 Q28 Q4 Q48
    Date: 2014–06–30
  4. By: Alok Kumar (Department of Economics, University of Victoria); Kam Shergill
    Abstract: This paper analyzes the determinants of the rural non-farm employment in the fifteen major states of India by using panel data analysis for the period 1972-2010. The analysis indicates that there are significant gender differences in the factors affecting the level and the growth of rural non-farm employment. The level of urbanization, the rural literacy rate and the rural unemployment rate have a significant positive effect on the incidence of non-farm employment for male workers. For female workers, agricultural productivity and the incidence of rural poverty have a significant positive effect. There is evidence of convergence in the incidence of rural non-farm employment for both male and female workers, indicating that states with initially low incidence of rural non-farm employment experienced a higher growth rate in the rural non-farm employment than states with initially high incidence.
    Keywords: Rural Non-Farm Employment, Male, Female, Convergence, Panel Data
    JEL: J22 I20 D60
    Date: 2014–07–25
  5. By: Nkegbe, Paul Kwame; Kuunibe, Naasegnibe
    Abstract: Climate variability poses a major risk to agricultural incomes in Africa. In Ghana, most of the country.s poor people live in the north and households find it difficult to hold back their productive assets during the lean season. This study investigates t
    Keywords: climate variability, panel data, welfare, individual heterogeneity, Ghana
    Date: 2014
  6. By: Berhanu, Wassie; Beyene, Fekadu
    Abstract: This paper examines the determinants and implied economic impacts of climate change adaptation strategies in the context of traditional pastoralism. It is based on a household level survey in southern Ethiopian rangelands. Pastoralists. perception of clim
    Keywords: climate change, pastoralism, adaptation strategies, Borana, Ethiopia
    Date: 2014
  7. By: Philipp Ager; Antonio Ciccone
    Abstract: Building on the idea that religious communities provide mutual insurance against some idiosyncratic risks, we argue that religious membership is more valuable in societies exposed to greater common risk. In our empirical analysis we exploit rainfall risk as a source of common economic risk in the nineteenth-century United States and show that religious communities were larger in counties where they faced greater rainfall risk. The link between rainfall risk and the size of religious communities is stronger in counties that were more agricultural, that had lower population densities, or that were exposed to greater rainfall risk during the growing season.
    Keywords: Religious community size, agricultural risk, informal insurance.
    Date: 2014–07
  8. By: Vicente Pinilla
    Abstract: This working paper provides a compilation of statistics on international wine consumption, production and trade from the mid-nineteenth century until the beginning of the Second World War. The statistical data is structured in three parts dealing with consumption, production and trade both at the world level and for a broad sample of countries. The data presented for Spain, France and Italy, the leading three nations in the wine market, are especially wide-ranging.
    Keywords: wine trade, wine production, wine consumption, agricultural trade, historical statistics
    JEL: N50 N70 Q11 Q17
    Date: 2014–07
  9. By: Akpalu, Wisdom; Dasmani, Isaac; Normanyo, Ametefee K.
    Abstract: In most coastal developing countries, the artisanal fisheries sector is managed as a common pool resource. As a result, such fisheries are overcapitalized and overfished. In Ghana, in addition to anthropogenic factors, there is evidence of rising coastal
    Keywords: climate variability, optimal tax, generalized maximum entropy, Ghana
    Date: 2014
  10. By: Ray Trewin
    Abstract: Australian live cattle exports were a growing $1 billion trade from northern Australia to Indonesia for finishing and slaughter for Indonesian consumers. This all changed in recent years with the trade being disrupted by a series of constraints which have shrunk the trade and raised uncertainty. Will it ever get back on trend or continue to shrink and disappear? Greater integration between Australia's live cattle trade and Indonesia's cattle feeding and processing industries through investment and technological transfer offers the potential of not only better meeting Indonesia's beef security but also strong processed meat opportunities in rich neighbours to the benefit of both countries. A continuation of the recent volatile and uncertain trade will be detrimental to both countries, with Indonesia losing a food-secure, reliable livestock supply to which value was added, and Australia a significant industry for one more dependent on costlier markets.
    Keywords: live cattle trade; policy analysis; economic analysis
  11. By: Anita Castledine; Klaus Moeltner; Michael Price; Shawn Stoddard
    Abstract: Many water utilities use outdoor watering restrictions based on assigned weekly watering days to promote conservation and delay costly capacity expansions. We find that such policies can lead to unintended consequences - customers who adhere to the prescribed schedule use more water than those following a more flexible irrigation pattern. For our application to residential watering in a high-desert environment, this "rigidity penalty" is robust to an exogenous policy change that allowed an additional watering day per week. Our findings contribute to the growing literature on leakage effects of regulatory policies. In our case inefficiencies arise as policies limit the extent to which agents can temporally re-allocate actions.
    JEL: C11 C30 Q2 Q25 Q58
    Date: 2014–07
  12. By: Bujko, Matthias; Fischer, Christian; Krieger, Tim; Meierrieks, Daniel
    Abstract: Large-scale land acquisitions, or land grabs, concentrate in developing countries which are also known for their corruption-friendly setting caused by a weak institutional framework. We argue that corrupt elites exploit this given institutional set-up to strike deals with international investors at the expense of the local population. Using panel data for 157 countries from 2000-2011, we provide evidence that these land deals indeed occur more often in countries with higher levels of corruption. --
    Keywords: large-scale land acquisitions,land grabbing,foreign investments,weak institutions,property rights,corruption,large-N study
    JEL: F21 O13 Q15 Q34
    Date: 2014
  13. By: Twerefou, Daniel Kwabena; Adjei-Mantey, Kwame; Strzepek, Niko Lazar
    Abstract: Climate change scenarios for many Sub-Saharan African countries including Ghana indicate that temperatures will increase while rainfall will either increase or decrease. The potential impact of climate change on economic systems is well-known. However, li
    Keywords: climate change, impacts assessment, road infrastructure, stressor response
    Date: 2014
  14. By: Alagidede, Paul; Adu, George; Frimpong, Prince Boakye
    Abstract: This paper is a contribution to the empirics of climate change and its effect on sustainable economic growth in Sub-Saharan Africa. Using data on two climate variables, temperature and precipitation, and employing panel cointegration techniques, we estima
    Keywords: climate change, Sub-Saharan Africa, sustainable growth, panel cointegration
    Date: 2014
  15. By: Margarita Gáfaro; Ana Maria Ibáñez; Patricia Justino
    Abstract: The main objective of this paper is to provide empirical evidence on the mechanisms that shape the relationship between violent conflict and collective action. Conflict dynamics in Colombia allow us to exploit rich variation in armed group presence and individual participation in local organizations. Our identification strategy is based on the construction of contiguous-pairs of rural communities that share common socio-economic characteristics but differ in armed group presence. This allows us to control for unobservable variables that may affect local participation and conflict dynamics simultaneously. The results show that the presence of armed groups increases overall participation in local organizations, with a particularly strong effect on political organizations. Contrary to existing results, we find that stronger individual participation may arise from coercion exercised by armed groups and not from a more vibrant civil society.
    Keywords: collective action, political organizations, armed groups, violent shocks
    Date: 2014–07–11
  16. By: ZhongXiang Zhang (Distinguished University Professor and Chairman, School of Economics, Fudan University, Shanghai, China)
    Abstract: China has gradually recognized that the conventional path of encouraging economic growth at the expense of the environment cannot be sustained. It has to be changed. This article focuses on China’s efforts towards energy conservation and environmental quality. The article discusses a variety of programs, prices, market-based instruments, and other economic and industrial policies and measures targeted for energy saving and pollution cutting, and the associated implementation and reliability issues. The article ends with some concluding remarks and recommendations.
    Keywords: Energy Saving; Environmental Quality, Low-Carbon Development, Power Generation, Energy Prices, Market-Based Instruments, Economic Policies, Industrial Policies, Resource Taxes, Implementation and Reliability, China
    JEL: H23 H71 O13 O53 P28 Q43 Q48 Q52 Q53 Q54 Q56 Q58
    Date: 2014–06
  17. By: Brigitte Hoogendoorn; Peter van der Zwan; Daniela Guerra
    Abstract: The objective of this paper is to develop a better understanding of how and why small and medium-sized enterprises (SMEs) engage in environmental practices. Two types of environmental practices are distinguished: practices related to production processes (greening processes) and practices related to products and services (greening product and service offerings). Despite a growing literature on socially responsible behavior of large firms, the role of SMEs remains underexposed. This neglect of SMEs is not justified because of the substantial impact of SMEs on the economy and the natural environment. By using unique data for almost 9,000 SMEs across 12 sectors in 38 countries, we study the influences of firm, sector and country characteristics on SMEs’ environmental behavior. Our results suggest that different characteristics have dissimilar influences on both types of environmental practices such as the type of customers served and the stringency of environmental legislation at the country level. Moreover, the dominant idea that small firms are reluctant to invest in environmental practices is clearly more nuanced: size indeed matters however only when greening processes are concerned.
    Date: 2014–05–07
  18. By: Stefan Boeters
    Abstract: Economic thought on climate policy as an instance of environmental regulation is strongly influenced by the principle of a uniform carbon price. Economists acknowledge that this principle breaks down in a “second-best†world with other distortions, such as taxes and market power in domestic and international markets. However, systematic analysis of this point in the economic climate policy literature is scarce. In the present paper, a computable general equilibrium (CGE) set-up is chosen in order to examine what pattern of differentiated carbon prices emerges as optimal in a second-best world. The CGE model WorldScan, which is considered to be representative of the class of models routinely used for numerical climate policy analysis, produces three main results: First, the optimal pattern of carbon prices is highly differentiated, ranging from almost prohibitive taxes to high subsidies (with a range of more than 1700 euros per ton of CO2). Second, the welfare gain from switching from a uniform price to optimally differentiated prices is enormous, equivalent to a 27 % emission reduction for free. Third, the most important drivers of carbon price differentiation are market power in export markets as well as taxes on consumption, intermediate inputs and domestic output. This shows that carbon price differentiation cannot be dismissed as a policy option lightly. However, before translating these findings into concrete policy advice, the relevant features of modelling pre-existing distortions in CGE models need close revision.
    JEL: Q42 Q54 H21 H23 D58
    Date: 2014–07
  19. By: Author-Name: Luca Di Corato (Department of Economics, Swedish University of Agricultural Sciences, Sweden); Cesare Dosi (Department of Economics and Management, University of Padova and Centro di Ricerca Interuniversitario sull’Economia Pubblica (CRIEP), Italy); Michele Moretto (Department of Economics and Management, University of Padova, Fondazione Eni Enrico Mattei (FEEM) and Centro Studi Levi-Cases, Italy)
    Abstract: Contracts providing payments for not developing natural areas, or for removing cropland from production, generally require long-term commitments. Landowners, however, can decide to prematurely terminate the contract when the opportunity cost of complying with conservation requirements increases. The paper investigates how this can affect bidding behavior in multi-dimensional auctions, where agents bid on both the conservation plan and the required payment, when contracts do not provide for sufficiently strong incentives against early exit. Integrating the literature on scoring auctions with that which views non-enforcement of contract terms as a source of real-options, the paper offers the following contributions. First, it is shown that bidders’ expected payoff is higher when facing enforceable project deadlines. Second, that failure to account for the risk of opportunistic behavior could lead to the choice of sellers who will not provide the contracting agency with the highest potential payoff. Finally, we examine the role that eligibility rules and the degree of competition can play in avoiding such potential bias in contract allocation.
    Keywords: Conservation Contracts, Scoring Auctions, Non-enforceable Contract Duration, Real Options
    JEL: C61 D44 D86 Q24 Q28
    Date: 2014–07

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