nep-agr New Economics Papers
on Agricultural Economics
Issue of 2014‒11‒17
27 papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Agricultural Production performance on Small farm holdings: Some Empirical Evidences from Bihar, India By Singh, R.K.P.; Kumar, Abhay; Singh, K.M.; Kumar, Anjani
  2. Differences of small-scale farmers and the related short agri-food value chains An empirical evidence from Hungary By Zsófia Benedek; Imre Fertõ; Lajos Baráth; József Tóth
  3. A Consistent Food Demand Framework for International Food Security Assessment By Beghin, John C.; Meade, Birgit; Rosen, Stacey
  4. Ex-post Risk Management Among Rural Filipino Farm Households By Murata, Akira; Miyazaki, Suguru
  5. Environmental Management in Agriculture – Case of Bulgaria By Bachev, Hrabrin
  6. The Nonparametric Relationship between Oil and South African Agricultural Prices By Ahdi N. Ajmi; Rangan Gupta; Monique Kruger; Nicola Schoeman; Leoné Walters
  7. Leveraging Wealth from Farmland Appreciation: Borrowing, Land Ownership, and Farm Expansion By Weber, Jeremy; Key, Nigel
  8. Virtual water trade and country vulnerability: A network perspective By Sartori, Martina; Schiavo, Stefano
  9. Quelles zones cibler pour accroître l’efficacité agricole en Ouganda? By Tankari, Mahamadou Roufahi
  10. To What Extent Does the Adoption of Modern Variety Increase Productivity and Income? A Case Study of the Rice Sector in Tanzania By Nakano, Yuko; Kajisa, Kei
  11. The Relationship between Oil and Agricultural Commodity Prices: A Quantile Causality Approach By Mehmet Balcilar; Shinhye Chang; Rangan Gupta; Vanessa Kasongo; Clement Kyei
  12. Natural Land Productivity, Cooperation and Comparative Development By Litina, Anastasia
  13. Have the Key Priority Forestry Programs Really Impacted on China's Rural Household Income By Can Liu Hao; Katrina Mullan; Qingjiao Rong; Wenqing Zhu
  14. Labour out migration from rice based cropping system: A case of Bihar, India By Kumar, Abhay; Singh, R.K.P.; Singh, K.M.; Kumar, Anjani
  15. How the Danes discovered Britain : the international integration of the Danish dairy industry before 1880 By Markus Lampe; Paul Sharp
  16. Diet quality, child health, and food policies in developing countries By Bhargava, Alok
  17. Cooperative organizations as an engine of equitable rural economic development By Altman, Morris
  18. Is aquaculture really an option? By Esther Regnier; Katheline Schubert
  19. Does access to microfinance affect consumption inequality? :evidence from a randomized controlled trial in Andhra Pradesh, India By Mukhopadhyay, Jyoti Prasad
  20. Analysing the Effects of Crop Shocks on Child Work: the Case of the Morondava District in Madagascar By Augendra BHUKUTH; Jérôme BALLET; Bako Nirina RABEVOHITRA; Patrick RASOLOFO
  21. Back to the Futures: An Assessment of Commodity Market Efficiency and Forecast Error Drivers By Algieri, Bernardina; Kalkuhl, Matthias
  22. Sharing of Climate Risks across World Regions By Johannes Emmerling
  23. Using Case Studies to Explore the External Validity of 'Complex' Development Interventions By Woolcock, Michael
  24. Climate change adaptation strategies within the framework of the German “Energiewende” – Is there a need for government interventions and legal obligations? By Markus Groth; Jörg Cortekar
  25. Adaptation to Climate Change and International Mitigation Agreements with Heterogeneous Countries By Hongxiu Li; Horatiu A. Rus
  26. Environmental Regulation and Competitiveness: Empirical Evidence on the Porter Hypothesis from European Manufacturing Sectors By Yana Rubashkina; Marzio Galeotti; Elena Verdolini
  27. Should We Pay for Ecosystem Service Outputs, Actions or Both? By Ben White; Nick Hanley

  1. By: Singh, R.K.P.; Kumar, Abhay; Singh, K.M.; Kumar, Anjani
    Abstract: Immediately after the green revolution period, there was an intense debate on the observed inverse relationship between farm size and per hectare agricultural productivity in India. It was subsequently argued that the higher productivity of small holdings would disappear with the adoption of superior technology, modernisation and growth in general. Recently, National Sample Survey data show that small holdings in Indian agriculture still exhibit a higher productivity than large holdings. This article contributes to the limited literature on farm size and productivity in small land holder's agriculture in Bihar, India. Plot wise panel data of VDSA project are used to reach at precise conclusion. The results provide evidence for a positive relationship between farm size and productivity in case of small land holders’ agriculture and hence, an inverse relationship does not seem to apply within small landholders’ agriculture. A strong positive relationship between farm size and output per hectare is a result of higher use of fertilizer, modern seeds and irrigation sources on comparatively larger land holders than small land holders in Bihar, India. It is mainly due to more uneconomic land holdings of sub-marginal and marginal farmers to have limited access to water resources, quality input and credit. Access to resources and technology must be considered together for any agricultural development programmes for small land holder's agriculture. It is therefore needed to look for ways of improving their access to resources for farming through increased opportunities for earning off farms and off season income or through improved credit market. Hence, small size and land fragmentation are key bottlenecks for the growth of agriculture in Bihar, India. The crop productivity of tiny landholders can be increased through improving their access to institutional financing system, agricultural extension network and farm technology centres. However, promotion of non-farm rural employment seems to be the most appropriate option for increasing crop productivity and improving livelihoods of small landholders in Bihar.
    Keywords: farm size, productivity, small landholders’ agriculture, Bihar, livelihood, adoption of modern technology
    JEL: O3 O33 Q0 Q12 Q15
    Date: 2014–08–15
  2. By: Zsófia Benedek (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Imre Fertõ (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Lajos Baráth (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); József Tóth (Gazdálkodástudományi Kar, Agrárközgazdasági és Vidékfejlesztési Tanszék, Budapesti Corvinus Egyetem)
    Abstract: Recently, short food supply chains have been thoroughly studied in some countries; however, data are sparse from others. In Hungary, the local food movement has been developing very fast and an outburst in the number of farmers markets has happened, due to the changes of the legal environment. The paper addresses the question whether farmers selling at various short food supply chains are different based on their socio-demographic, farm- and production-related characteristics, expectations and motivations. Employing survey data our results confirm that short supply chains are different in terms of farmers’ profiles. The outcomes are important in the light of the coming EU funding schemes as different small-scale farmers require different supporting frameworks and solutions.
    Keywords: Short food supply chain, local food system, farmers’ market, organic farming
    JEL: Q13 Q18 R58
    Date: 2014–03
  3. By: Beghin, John C.; Meade, Birgit; Rosen, Stacey
    Abstract: A parsimonious demand modeling approach has been developed for the annual USDA-ERS International Food Security Assessment. The approach incorporates price effects, food quality variation across income deciles, and consistent aggregation over income deciles and food qualities. The approach is based on a simple PIGLOG demand approach for four food categories. It relies on the existing sparse data available for the assessment, complemented by own-price and income elasticities and available price data. Beyond exact aggregation, the framework exhibits desirable characteristics: food quality is increasing with income; price and income responses become less sensitive with increasing income; and increasing income inequality decreases average per capita food consumption. The proposed approach is illustrated for Tanzania. We then use the calibrated model to decompose the impact of income, prices, and exchange rates on food consumption.
    Keywords: food prices; shocks; international food security; PIGLOG demand; aggregation; income inequality
    JEL: D31 F17 Q17
    Date: 2014–10–26
  4. By: Murata, Akira; Miyazaki, Suguru
    Abstract: This study investigated the factors affecting the choice of coping strategies by rural Filipino farm households in the face of both covariate (or systemic) and idiosyncratic shocks. The study, conducted by the Japan International Cooperation Agency Research Institute (JICA-RI) in 2010, surveyed farm households in villages from three provinces in the Philippines. Using a multivariate probit model, the effects of shock attributes (i.e. coverage, intensity, and frequency), as well as both household and village characteristics were analyzed. The study found that in general, rural farm households rely mainly on the strategy of dissaving/selling assets regardless of shock attributes. However, in the face of idiosyncratic shocks, there is a greater probability that these households would count on borrowing/transfer as a coping option, while in the case of more frequent covariate shocks, they are more likely to reallocate labor. The findings from this study suggest the importance of the following factors in mitigating vulnerability and enhancing resilience: helping the farmers diversify sources of income and redistributing land ownership, improving agricultural infrastructure, and developing social insurance and social networks. For that purpose, there is a need for continuous agrarian reform including support for improvements in the agricultural infrastructure as well as for the further development of social protection.
    Keywords: Risk , vulnerability , coping strategies , covariate and idiosyncratic shocks , Philippines
    Date: 2014–03–04
  5. By: Bachev, Hrabrin
    Abstract: This paper presents a holistic framework for analysing, assessment and improvement of environmental management in agriculture, and assesses the forms, factors and efficiency of agro-eco-management in Bulgaria during post-communist transition and EU integration. It incorporates an interdisciplinary approach, and suggests a modern framework for analysing and evaluating the system of environmental management in agriculture. After that is analysed evolution of diverse formal and informal management forms for environmental management in Bulgarian agriculture, and identifies and assesses the forms, factors, efficiency and perspectives of environmental management in “eco-active†farms of different type and location.
    Keywords: environmental management, agriculture, mechanisms and forms of governance, eco-managment indicators, Bulgaria, EU CAP implementation, market, private, public modes, farm managment
    JEL: Q12 Q13 Q15 Q18 Q2 Q20 Q3 Q30 Q5 Q51 Q52 Q53 Q54 Q56 Q57 Q58
    Date: 2014–09
  6. By: Ahdi N. Ajmi (College of Science and Humanities in Slayel, Salman bin Abdulaziz University, Kingdom of Saudi Arabia); Rangan Gupta (Department of Economics, University of Pretoria); Monique Kruger (Department of Economics, University of Pretoria); Nicola Schoeman (Department of Economics, University of Pretoria); Leoné Walters (Department of Economics, University of Pretoria)
    Abstract: The aim of this paper is to investigate the causal relationship between agricultural prices in South Africa and global oil prices. A nonlinear Granger causality test based on moment conditions, introduced by Nishiyama et al (2011) is employed and we find that there is indeed a causal relationship between global oil prices and certain South African agricultural commodity prices. The mean price of wheat, sunflower and soya are Granger caused by OPEC basket oil price. OPEC basket oil prices also cause volatility of wheat, sunflower seed and sorghum prices.
    Keywords: Agricultural prices; Oil prices; Granger causality; Nonlinearity; South Africa
    JEL: C32 Q11 Q40
    Date: 2014–10
  7. By: Weber, Jeremy; Key, Nigel
    Abstract: We study how increases in wealth from rapid appreciation of farmland influenced farmer decisions to borrow, buy land, and expand. Exploiting periods of high and low appreciation and a panel data model that allows for correlation between prior growth trends and the share of land owned, we find that a dollar increase in paper wealth led younger farmers to increase real-estate-secured borrowing by 48 cents. Land purchases accompanied the increase in borrowing, supporting the view that collateral-based lending may be contributing to the recent run-up in farmland prices. We find no effect of land wealth on production or acres harvested.
    Keywords: real estate appreciation; borrowing, collateral, farm wealth
    JEL: Q1 R1
    Date: 2014–07–01
  8. By: Sartori, Martina; Schiavo, Stefano
    Abstract: In this paper, we analyze the link between virtual water trade, that is, the flow of water embodied in the international trade of agricultural goods, and vulnerability to external shocks from the vantage point of network analysis. While a large body of work has shown that virtual water trade can enhance water saving on a global scale, being especially beneficial to arid countries, there are increasing concerns that more openness makes countries more dependent on foreign food suppliers and especially more susceptible to external shocks. Our evidence reveals that the increased globalization witnessed in the last 30 years is not associated with the increased frequency of adverse shocks (in either precipitation or food production). Furthermore, building on recent advances in network analysis that connect the stability of a complex system to the interaction between the distribution of shocks and the network topology, we find that the world is more interconnected, but not necessarily less stable.
    Keywords: virtual water trade, vulnerability, complex network, shocks
    JEL: F14 F18 Q25 Q56
    Date: 2014–10
  9. By: Tankari, Mahamadou Roufahi
    Abstract: L'objectif de cet article est d'élaborer un outil opérationnel pour la mise en place des politiques agricoles visant à accroitre l’efficacité de l’agriculture en Ouganda. A cet effet, des analyses effectuées sur les données d’Uganda National Panel Survey (UNPS) 2011-2012 ont permis d’élaborer une cartographie du niveau d’efficacité de la production agricole et des facteurs terre et travail. Ceux-ci sont les principales dotations de la population pauvre à partir desquelles elle tire sa subsistance. Il ressort que les zones abritant les unités de productions les plus efficaces en termes de production agricole ne sont pas forcément celles où la main d’Å“uvre ou la terre est utilisée de façon efficace. Des foyers d’inefficacité peuvent être ainsi repérés grâce aux atlas élaborés et fait l’objet d’un ciblage approprié en termes de politiques agricoles. The objective of this paper is to develop an operational tool for the implementation of agricultural policies to increase the agriculture efficiency in Uganda. For this purpose, the analysis performed on the data of Uganda National Panel Survey (UNPS) from 2011/2012 has permitted to elaborate a map of the level of efficiency of agricultural production and land and labor inputs. These are the main endowments of the poor population from which it draws its subsistence. It appears that areas with the most effective production units in terms of agricultural production are not necessarily the ones in which labor or land is used efficiently. Inefficient areas can then be identified by the atlas elaborated and targeted by agricultural policies.
    Keywords: Ouganda, Agriculture, efficacité, ciblage Uganda, Agriculture, efficiency, targeting
    JEL: Q1 Q12 Q18
    Date: 2014–10
  10. By: Nakano, Yuko; Kajisa, Kei
    Abstract: Although high-yielding modern rice varieties (MVs) have been gradually disseminating over Sub-Saharan Africa, little is known about how their adoption influences agriculture productivity and household income. To fill this research gap, we analyzed two kinds of data sets in Tanzania: a national representative cross-sectional data and a two-year panel data of irrigated farmers in one district. The most important finding is a strong complementary relationship between MVs and water control; high yield is achieved when MVs are grown with improved bunds in paddy fields of irrigated areas. We also find that the use of chemical fertilizer and the practice of transplanting in rows increase yield and income of both the adopters and nonadopters of MVs in the irrigated areas. In rain-fed areas, we observe a limited impact of MVs. These findings suggest that introducing MVs as a package of technologies with agronomic practices is effective to fully achieve their potential. In the long run, development of irrigation would be important to realize a rice Green Revolution in Sub-Saharan Africa.
    Keywords: Modern Variety , Technology Adoption , Green Revolution , Sub-Saharan Africa , Tanzania
    Date: 2014–03–20
  11. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus , via Mersin 10,Turkey;Department of Economics, University of Pretoria, Pretoria, 0002, South Africa.); Shinhye Chang (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria); Vanessa Kasongo (Department of Economics, University of Pretoria); Clement Kyei (Department of Economics, University of Pretoria)
    Abstract: This paper investigates causality between oil prices and the prices of agricultural commodities in South Africa. We use daily data covering the period April 19, 2005 to July 31, 2014 for oil prices and the prices of soya beans, wheat, sunflower and corn. The test for Granger causality in conditional quantiles as proposed by Jeong et al., (2012) was employed. Our findings show that the effect of oil prices on agricultural commodity prices varies across the different quantiles of the conditional distribution. The impact on the tails is lower compared to the rest of the distribution. However, the highest impact is not necessarily at the mean. We show that due to nonlinear dependence between oil prices and agricultural commodity prices, regular Granger causality provides misleading results and also fails to characterize the relationship over the entire conditional joint distribution of the variables.
    Keywords: Granger causality, South Africa, Nonparametric test, Quantile causality, Commodity prices
    JEL: Q02 Q43
    Date: 2014–11
  12. By: Litina, Anastasia
    Abstract: This research advances the hypothesis that natural land productivity in the past, and its effect on the desirable level of cooperation in the agricultural sector, had a persistent effect on the evolution of social capital, the process of industrialization and comparative economic development across the globe. Exploiting exogenous sources of variations in land productivity across a) countries; b) individuals within a country, and c) migrants of different ancestry within a country, the research establishes that lower level of land productivity in the past is associated with more intense cooperation and higher levels of contemporary social capital and development.
    Keywords: Land productivity, Cooperation, Social Capital, Trust, Growth, Development, Agriculture, Industrialization
    JEL: O11 O13 O14 O3 O31 O33 O4 O5 O50 O57
    Date: 2014–09–09
  13. By: Can Liu Hao; Katrina Mullan; Qingjiao Rong; Wenqing Zhu
    Abstract: We use a large unique household panel data set spanning 16 years to estimate the impacts of three major Chinese forest conservation and reforestation programs on household incomes. The programs are the most significant of China’s Key Priority Forestry Programs, namely the Sloping Land Conversion Program (the SLCP), the Natural Forest Protection Program (the NFPP), and the Desertification Combating Program around Beijing and Tianjin (the DCBT). Cluster effects with county and environment factors have been estimated by using year dummy variables. Fixed model with cluster effects has been used. In addition to estimating the total impacts of the programs, individually and in combination, we disaggregate the effects by income source, stage of policy implementation, and duration of participation. We find minimal effects on total incomes from the programs overall, which are quiet different with other research empirical results, .but the more detailed results show that the initial stages of the programs, and the early years of participation had negative or neutral effects on land-based incomes, while in more recent years, impacts have improved, and in some cases become positive.
    Keywords: Priority Forest Programs, rural household income, rural development, forest economics, ecological restoration.
    JEL: Q23 I38 R14 R29
    Date: 2013
  14. By: Kumar, Abhay; Singh, R.K.P.; Singh, K.M.; Kumar, Anjani
    Abstract: Migration has been a recurrent phenomenon since the dawn of human history. Though its form has changed but it remains a dominant event in the global social system. In modern days also people migrate from underdeveloped areas to the developed ones in search of better opportunities. A number of social, cultural, economic, spatial, climatic, demographic factors induce migration, however, the economic factors are considered as the primary reasons for inducing migration. Migration of male labour force from Bihar has increased during last two decades. It was observed that the youngsters are more prone to migration and most of them are migrating to urban centers for non-farm work. Migration helped more rational use of two critical inputs, labour and irrigation in rice production on migrant households. The migration seems to have helped in judicious use of human labour at native place due to migration of surplus labour force for gainful employment to destination of migration. Remittances have been utilized for meeting consumption needs, improved livelihood, better education to children and better health care facilities. Migrant households also preferred to save money to meet their requirements in unforeseen situations. It can thus be inferred that migration may be one of risk-coping strategies for the weaker sections of the society and has inculcated the saving habits among migrant households. The allocation of remittances on agricultural inputs could have increased if proper infrastructure facilities were present in rural areas for faster dissemination of modern agricultural technology for increasing agricultural production. Analysis of determinants of migration revealed that a male member of lower caste with larger size of land and larger number of dependents is more prone to migration in Bihar. The caste barrier for migration has weakened but still persists; however, size of farm is no more taboo for migration.
    Keywords: Migration, Rice production, Labor migration, Remittances, Bihar
    JEL: J24 J61 Q1 Q12
    Date: 2014–08–15
  15. By: Markus Lampe; Paul Sharp
    Abstract: The success of Danish agricultural exports at the end of the nineteenth century is often attributed to the establishment of a direct trade with Britain. Previously, exports went mostly via Hamburg, but this changed with the loss of Schleswig and Holstein to Prussia in the war of 1864. After this, quantity and price data imply narrowing price gaps and thus imply gains for Danish producers. Why then did Denmark not discover the British market earlier? We show that butter markets in both countries were integrated in the eighteenth century, but through the Hamburg hub. We then demonstrate that there were sound economic reasons for this well into the nineteenth century. However, movements to establish a direct trade were afoot from the 1850s. Thus, although the war certainly gave an extra boost to the process
    Keywords: Butter , Dairies , Denmark , Hubs , International trade , Market integration
    JEL: F1 L1 N5 N7 Q1
    Date: 2014–10
  16. By: Bhargava, Alok
    Abstract: Although the importance of diet quality for improving child health is widely recognized, the roles of environmental factors and the absorption of nutrients for children's physical growth and morbidity have not been adequately integrated into a policy framework. Moreover, nutrient intakes gradually affect child health, so it is helpful to use alternative tools to evaluate short-term interventions versus long-term food policies. This article emphasizes the role of diet quality reflected in the intake of nutrients such as protein, calcium, and iron for children's physical growth. Vitamins A and C are important for reducing morbidity. Children's growth and morbidity affect their cognitive development, which is critical for the future supply of skilled labor and economic growth. Evidence on these issues from countries such as Bangladesh, India, Kenya, the Philippines, and Tanzania is summarized. The supply of nutritious foods is appraised from the viewpoint of improving diet quality. Finally, the roles of educational campaigns and indirect taxes on unhealthy processed foods consumed by the affluent in developing countries are discussed.
    Keywords: Health Monitoring&Evaluation,Food&Beverage Industry,Nutrition,Early Child and Children's Health,Population Policies
    Date: 2014–10–01
  17. By: Altman, Morris
    Abstract: Cooperatives represent an alternative to large-scale corporate farms and plantations as well as to independent unaffiliated small private farms. This paper presents a comparative modeling narrative on cooperative organizational forms’ potential impact on equitable rural development. This speaks to issues of both increasing the size of the economic pie and how this income is distributed. The case is made the cooperatives can potentially generate higher rates of growth and more equitable growth, even in competitive economic environments. An important type of cooperative that is focused upon is one based on the linking of smaller farms into a cooperative. Economies economics of scale and scope as well in transaction costs can be captured by the cooperatives. Given cooperative governance, one would also expect higher levels of x-efficiency. Overall, cooperatives can generate relative high incomes to cooperative members, whilst remaining competitive with the traditional privately owned large farms. Critical to the success of the cooperative, is a set rules and regulation that place them on a level playing field with the privately owned farm. In addition, the implementation and practice of cooperative principles is key to the success of the cooperative farm and rural cooperatives, more generally speaking.
    Keywords: Cooperation, Cooperatives, Economics of Scale and Scope, Fairness, Transaction Costs, Cooperative Principles, X-Efficiency, Dynamic Efficiency, Income Equality,
    Date: 2014
  18. By: Esther Regnier (Centre d'Economie de la Sorbonne - Paris School of Economics); Katheline Schubert (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: This article analyzes the impact of the introduction of aquaculture on wild fish stocks and consumer utility, taking into account three key components: (1) the dependence of aquaculture on reduction fisheries for the feeding of the farmed species; (2) biological interactions between the wild edible species –the predator– and the wild feed species –the prey–; (3) consumer preferences for wild and farmed fish. Fisheries are in open access while the aquaculture sector is competitive. We show that when biological interactions are moderate, the introduction of aquaculture is beneficial in the long run; it improves consumer utility and alleviates the pressure on the edible fish stock. Results are deeply modified when biological interactions are strong: the stock of edible wild fish is reduced and the introduction of aquaculture may even cause a decrease in consumer utility. Finally, we explore the consequences of an improvement in aquaculture efficiency and of a sensitivity of consumer preferences to the farmed fish diet, in the case where biological interaction are absent.
    Keywords: Fisheries, aquaculture, consumer preferences, food security, biological interactions.
    Date: 2013–01
  19. By: Mukhopadhyay, Jyoti Prasad
    Abstract: This paper examines the impact of access to microfinance on consumption inequality using panel data of 6080 households available from a randomized evaluation conducted by Banerjee et al. (2013) in 104 slums in Andhra Pradesh, India. We find that access to microcredit exacerbates consumption inequality both at the slum-level and the household-level. Further decomposition of inequality indices shows that this difference in consumption inequality is predominantly driven by expenditure on non-food items. However, once all households across treatment and control slums have equal access to microcredit in the long-run, the disparity in consumption inequality between treatment and control slums disappears. Our results also suggest that larger loan size and higher number of loan cycles completed by older microcredit borrowers do not cause any significant divergence in consumption inequality across treatment and control households. These results imply need for targeted livelihood support programmes for those who cannot participate in microcredit programmes.
    Keywords: microfinance, randomized controlled trial, inequality
    JEL: C23 D63 G21
    Date: 2014–07–03
  20. By: Augendra BHUKUTH; Jérôme BALLET; Bako Nirina RABEVOHITRA; Patrick RASOLOFO
    Abstract: In a context where credit is squeezed, the shocks to which household are exposed impact on child work. This article analyses the impact of a drought on the Morondava rural district in Madagascar in 2006. This is a rice growing area. We used data from the surveys conducted by the Réseau des Observatoires Ruraux (ROR) to test the validity of the effect of the shock on child labour, and to explore the impact of the credit squeeze and the relevance of buffer-stock hypothesis.
    Keywords: Child work, Buffer stocks, credit constraints, consumption smoothing.
    JEL: J82 J22 G20 O16
    Date: 2014
  21. By: Algieri, Bernardina; Kalkuhl, Matthias
    Abstract: The role of futures markets in stabilizing spot prices has been extensively discussed. Nevertheless, the ability of these markets to achieve the stabilizing function significantly depends on whether they are ‘efficient’ in the sense that futures prices ‘fully reflect’ the available information. The purpose of this study is first to gauge the extent to which futures markets for a set of traded commodities can be considered efficient in predicting spot prices. We then go beyond traditional analyses of efficiency and assess the relative forecasting performance of futures markets; i.e., the difference between the realization and prediction of future spot prices, and what factors affect these forecast errors. The results of the analysis show that maize, soybeans, and wheat markets are not informationally efficient, so that investors can make outsize profits. We find that short-term speculation, measured by the scalping index, increases the noises in the information formation process, thus increasing forecast errors. Conversely, long-term speculation, proxied by the Working-T index and the speculative pressure index, reduces forecast errors although their quantitative effect is negligible. Other relevant factors that drive forecast errors up are a high level of realized price volatility, the lack of liquidity in the market, and a longer contract maturity horizon.
    Keywords: futures markets, efficiency, forecast errors, GARCH, Agricultural Finance, Financial Economics, G14, C58, Q14,
    Date: 2014–09
  22. By: Johannes Emmerling (Fondazione Eni Enrico Mattei)
    Abstract: Uncertainty is prevalent in the context of climate change impacts. Moreover, the distribution across the globe is not uniform. We analyze how climate risks could be reduced via an insurance scheme at the global scale across regions and quantify the potential welfare gains from such a scheme. Starting from the standard welfare analysis in Integrated Assessment Models (IAMs), which assumes no risk sharing across region, we introduce global risk sharing via a market for state-dependent Arrow-Debreu securities. We show that this allows equalizing relative consumption differences between states of the world across regions. We estimate that such risk sharing scheme of climate risks could lead to welfare gains reducing the global costs of climate change by up to one third, while the amount of transfers required is substantial. This provides arguments for considering risk sharing in IAMs, but also for potentially welfare increasing negotiations about sharing risks of climate change at the global level.
    Keywords: Uncertainty, Risk Sharing, Insurance, Climate Change, Risk Aversion
    JEL: Q54 D81 D63
    Date: 2014–09
  23. By: Woolcock, Michael (World Bank)
    Abstract: Rising standards for accurately inferring the impact of development projects has not been matched by equivalently rigorous procedures for guiding decisions about whether and how similar results might be expected elsewhere. These 'external validity' concerns are especially pressing for 'complex' development interventions, in which the explicit purpose is often to adapt projects to local contextual realities and where high quality implementation is paramount to success. A basic analytical framework is provided for assessing the external validity of complex development interventions. It argues for deploying case studies to better identify the conditions under which diverse outcomes are observed, focusing in particular on the salience of contextual idiosyncrasies, implementation capabilities and trajectories of change. Upholding the canonical methodological principle that questions should guide methods, not vice versa, is required if a truly rigorous basis for generalizing claims about likely impact across time, groups, contexts and scales of operation is to be discerned for different kinds of development interventions.
    JEL: B40 O10
    Date: 2013–11
  24. By: Markus Groth (Leuphana University Lueneburg, Germany); Jörg Cortekar (Climate Service Center 2.0, Germany)
    Abstract: The option of adapting to climate change is becoming more important in climate change policy. Hence, responding to climate change now involves both mitigation to address the cause and adaptation as a response to already ongoing or expected changes. These changes are also of relevance for the energy sector in Germany. An energy sector that in the course of the German “Energiewende”, also has to deal with a fundamental shift in energy supply from fossil fuel to renewable energies in the next decades. Based on a synthesis of the current knowledge regarding the possible influences of climate change on the German energy sector along its value-added chain, the paper points out, that the possible impacts of a changing climate should be taken into account in the upcoming infrastructure projects in the course of the Energiewende. The main question here is, whether adaptation options will be implemented voluntarily by companies or not. The paper argues that this has to be the case, when the measure is a private good. If, on the contrary, the measure is a public good, additional incentives are needed. For the German energy sector, the paper shows, that governmental intervention are for example justifiable regarding measures to adapt the grid infrastructure as a critical infrastructure that needs to be protected against current and future impacts of climate change.
    Keywords: adaptation, climate change, critical infrastructures, environmental policy instruments, energy sector, energy transition, market failures, mitigation, private goods, public goods
    JEL: A11 H20 H41 L94 Q40 Q48 Q54 Q58
    Date: 2014–11
  25. By: Hongxiu Li (Department of Economics, University of Waterloo); Horatiu A. Rus (Department of Economics, University of Waterloo)
    Abstract: This paper investigates the impact of adaptation on a country's incentive to participate in emission-reducing International Environmental Agreements (IEAs) on climate change. We develop a framework where heterogeneity across countries is introduced with respect to the benefits and costs of both mitigation of emissions and adaptation to reduce the impact of climate change. The paper uses two coalition stability concepts and numerical simulations to look at stable coalitions. We also study the effect of an within-coalition increase in the efficiency of adaptation on emissions and on countries' incentives to cooperate. Our main findings are: first, investment in adaptation technology has a public good feature inside the coalition, compared to being strictly a private good in the non-cooperation case. Second, a large coalition cannot be achieved if countries differ much in terms of vulnerability. Third, cooperation incentives can be enhanced by a coalition which diffuses technological progress on climate change adaptation among its members.
    JEL: H41 Q54 Q59
    Date: 2014–10
  26. By: Yana Rubashkina (Catholic University of Milan); Marzio Galeotti (University of Milan and IEFE-Bocconi); Elena Verdolini (Fondazione Eni Enrico Mattei and CMCC)
    Abstract: This paper represents an empirical investigation of the “weak” and “strong” Porter Hypothesis (PH) focusing on the manufacturing sectors of European countries between 1997 and 2009. By and large, the literature has analyzed the impact of environmental regulation on innovation and on productivity generally in separate analyses and mostly focusing on the USA. The few existing studies focusing on Europe investigate the effect of environmental regulation either on green innovation or on performance indicators such as exports. We instead look at overall innovation and productivity impact that are the most relevant indicators for the “strong” PH. This approach allows us to account for potential opportunity costs of induced innovations. As a proxy of environmental policy stringency we use pollution abatement and control expenditures (PACE), which represent one of the few indicators available at the sectoral level. We remedy upon its main drawback, that of potential endogeneity of PACE, by adopting an instrumental variable estimation approach. We find evidence of a positive impact of environmental regulation on the output of innovation activity, as proxied by patents, thus providing support in favor of the “weak” PH in line with most of the literature. On the other front, we find no evidence in favor or against the “strong” PH, as productivity appears to be unaffected by the degree of pollution control and abatement efforts.
    Keywords: Environmental Regulation, Innovation, Productivity, Competitiveness, Porter Hypothesis
    JEL: Q50 Q52 Q55 Q58 O31
    Date: 2014–09
  27. By: Ben White (University of Western Australia); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews)
    Abstract: Payments for ecosystem service outputs have become a popular policy prescription for a range of agri-environmental schemes. The focus of this paper is on the choice of sets of instruments in an ecosystem service principal-agent model that addresses adverse selection and moral-hazard. Results show that input-based and output-based contracts are equivalent where there is full information. With missing information, input-based contracts are more efficient at reducing the informational rent related to adverse selection than output-based contracts. There is an efficiency gain related to using mixed contracts especially where one input is not observable. These contracts allow the regulator to target variables that are costly-to-fake as opposed to those prone to moral hazard such as labour inputs. We then consider the implications of moral hazard and dynamic contracting. An overall finding is that in designing agri-environmental schemes, it is critical that the regulator has an understanding of the link between actions and ecosystem service outputs and, ideally, an estimate of their economic value. Without these in place, payment for ecosystem service schemes will be inefficient and poorly targeted.
    Keywords: payments for ecosystem services, principal-agent models, moral hazard, adverse selection, mechanism design
    JEL: D82 Q24 Q57 Q58
    Date: 2014–10

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