nep-agr New Economics Papers
on Agricultural Economics
Issue of 2016‒09‒04
thirteen papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Does market upgrading benefit farmers? : market differentiation, contract farming, and professional cooperatives in China's pork processing industry By Watanabe, Mariko
  2. An Economic Assessment of Bioethanol Production from Sugar Cane: The Case of South Africa By Marcel Kohler
  3. Productivity and Convergence in European Agriculture By Lajos Barath; Imre Ferto
  4. Studying Farm Insurance Demand under Financial Constraints By Lajos Barath; Raushan Bokusheva; Imre Ferto
  5. The Effect of Gender-Targeted Conditional Cash Transfers on Household Expenditures: Evidence from a Randomized Experiment By Armand, Alex; Attanasio, Orazio; Carneiro, Pedro; Lechene, Valérie
  6. The architecture of food safety control in the European Union and the Eurasian Economic Union By Sedik, David; Ulbricht, Carl; Dzhamankulov, Nuritdin
  7. Determinants of Food Consumption Choices: Experimental Evidence from St. Kitts By Kaywana Raeburn; Jim Engle-Warnick; Sonia Laszlo
  8. Can Unconditional Cash Transfers Lead to Sustainable Poverty Reduction? Evidence from two government-led programmes in Zambia By Luisa Natali; Sudhanshu Handa; David Seidenfeld; Benjamin Davis; Gelson Tembo; UNICEF Office of Research - Innocenti
  9. Ricardo on Machinery: A Textual Analysis By Freni, Giuseppe; Salvadori, Neri
  10. Trade and Agricultural Disease: Import Restrictions in the Wake of the India – Agricultural Products Dispute By Kamal Saggi; Mark Wu
  11. A holistic approach for assessing the system of governance of agrarian sustainability By Bachev, Hrabrin
  12. Priority for the Worse Off and the Social Cost of Carbon By Matthew Adler; David Anthoff; Valentina Bosetti; Greg Garner; Klaus Keller; Nicolas Treich
  13. Information, Choice, and Obesity: Measuring the Impact of the New York City Calorie Labeling Mandate on Obesity By Rodrigo Aranda Balcazar; Michael Darden; Donald Rose

  1. By: Watanabe, Mariko
    Abstract: This study tested whether contract farming or farmers professional cooperatives (FPCs) improved the social benefit of pork production and income of breeding farmers in China. The main concern of this study is whether institutional arrangement like contract farming or FPCs actually improved the welfare of farmers as expected. To answer this question accurately, we estimated the differentiated market demand of pork products in order to quantify the benefit by transaction types. Our study finds that contract farming or FPCs improved the benefits of pork products, but farmer's income remained lower than that of traditional transaction types. This finding is new in terms of quantifying distribution of the economic values among sales outlets, agro-firms and farmers. It is more reliable because it explicitly captures impacts from both demand side and supply side by structural estimation. In practice, we need to keep it mind the bargaining power of small farmers will not improve instantly even when the contract farming or FPCs are introduced.
    Keywords: Agricultural industries, Agriculture, Agricultural cooperative, Farmers, Food industry, Pork processing industry, Differentiated demand estimates, Value chain, Contract farming, Farmers professional cooperatives
    JEL: L22 O13 Q13
    Date: 2016–08
  2. By: Marcel Kohler
    Abstract: The destabilising economic impact of South Africa’s dependence on imported crude oil is a key motivation behind the country’s drive to develop a biofuel industry. Much concern has been raised over the impact of biofuels production on price of food for the country's poor. It is this concern that has seen the prohibition of maize and the favouring of sugar cane as a feedstock in South Africa's Biofuels Industrial Strategy. This paper sets out to analyse the economic feasibility of producing bioethanol from sugar based on the industry's efforts to diversify its market base. The study suggests that bioethanol production is financially viable at an average US$102/bbl for the period 2005-2015, based on estimates that producers typically pay the equivalent of US$67/bbl for sugar cane feedstock, incur approximately US$20/bbl in operating & maintenance costs and require the equivalent of US$15/bbl to recoup capital investments. To kick-start the commercial production of fuel grade ethanol in South Africa, producers require mandated subsidisation. State support for bioethanol producers in the form of a guaranteed minimum selling price for bioethanol of 95 percent of the basic fuel price, exemption from fuel taxes in addition to specific capital investment allowances are required.
    Keywords: Biofuels, Costing, South Africa
    JEL: Q42
    Date: 2016–08
  3. By: Lajos Barath (ETH Zürich, Agricultural Economics Group); Imre Ferto (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: In the paper we investigate relative productivity levels and decompose productivity change for European agriculture between 2004 and 2013. More specifically (1) we contribute to the debate whether agricultural Total Factor Productivity (TFP) has declined or not in the European Union (EU); (2) we compare the relative TFP level across EU member states and investigate the difference between ‘old’ member states (OMS, i.e. the EU-15) and ‘new’ member states (NMS) and (3) we test whether TFP is converging or not among member states. The empirical analysis applies the aggregate quantity framework developed in O’Donnell (2008), using country level panel data from the Economic Accounts for Agriculture for 23 EU member states. The results imply that TFP has slightly decreased in the EU over the analysed period; however there are significant differences in this respect between the OMS and NMS and across member states. Finally, our estimations support the productivity convergence hypothesis across the member sates.
    Keywords: Total Factor Productivity (TFP) level, Agricultural productivity in the EU; Färe-Primont TFP index; TFP components; technical efficiency, scale efficiency, mix efficiency
    JEL: Q12
    Date: 2016–08
  4. By: Lajos Barath (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Raushan Bokusheva (ETH Zürich, Agricultural Economics Group); Imre Ferto (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: We hypothesize a reciprocal causation between crop insurance use and the economic performance of farms in an environment characterized by imperfect financial markets and farms’ budget constraints. To test our hypothesis, we apply a system of simultaneous equations consisting of economic performance and insurance demand models to the case study of Hungarian cropping farms. In addition, considering that insured farms may have better access to external finance, we seek empirical evidence confirming a potential positive effect of crop insurance on the economic performance of financially constrained farms. Our study results indeed confirm the reciprocal causation hypothesis.
    Keywords: crop insurance demand; farm productivity; financial constraints; farm investment; Hungarian agriculture.
    JEL: G22 L25 Q12 Q14
    Date: 2016–08
  5. By: Armand, Alex; Attanasio, Orazio; Carneiro, Pedro; Lechene, Valérie
    Abstract: This paper studies the differential effect of targeting cash transfers to men or women on the structure of household expenditures on non-durables. We study a policy intervention in the Republic of Macedonia, offering cash transfers to poor households, conditional on having their children attending secondary school. The recipient of the transfer is randomized across municipalities to be either the household head or the mother. Using data collected to evaluate the conditional cash transfer program, we show that the gender of the recipient has an effect on the structure of expenditure shares. Targeting transfers to women increases the expenditure share on food by about 4 to 5%. To study the allocation of expenditures within the food basket, we estimate a demand system for food and we find that targeting payments to mothers induces, for different food categories, not only a significant intercept shift, but also a change in the slope of the Engel curve.
    Keywords: CCT; expenditure.; Gender; intra-household
    JEL: D12 D13 E21 O12
    Date: 2016–08
  6. By: Sedik, David; Ulbricht, Carl; Dzhamankulov, Nuritdin
    Abstract: The system of surveillance and control of food safety and animal and plant health is a vital building block of the single market in both the European Union (EU) and the Eurasian Economic Union (EAEU). The free movement of goods (the first of the four fundamental freedoms of the EU and the EAEU) throughout the union depends on the proper functioning of a union-wide system of assessment and control of food safety and animal and plant health risks. Sanitary and phytosanitary measures taken in response to a food safety threat, while they are a necessary part of the system for food safety control, are barriers to the free movement of goods within the union. They can be avoided only by ensuring an effective system of preventative control. While food safety is a worthwhile goal in and of itself, it is important to recognize that it is also an indispensable "pillar" upon which the free movement of goods rests. [...] The present analysis of the "architecture" of food safety control systems in the European Union and the Eurasian Economic Union is designed to assess the degree to which the present systems in the two unions can ensure effective food safety control, thus ensuring the free movement of goods within the single market. It is a comparative analysis of the EU and EAEU systems for ensuring food safety through sanitary and phytosanitary measures (Box 1). The analysis spans both central and country level institutions for ensuring food safety in the countries of these two economic unions. We first compare laws, institutions and the governance of food safety issues in the two unions at the supranational level. Second, we describe and compare the food safety systems at the country level in both unions. Last, we provide a synthetic conclusion that reports our findings about the key differences between food safety control in the European Union and the Eurasian Economic Union. We conclude that there are cardinal differences between the food safety systems in the two unions both at the central and country levels. The overhaul of the EU food safety control system in the 2000s led to a significant transfer of decision making authority to EU institutions. Very little, if any, of the EU-type central edifice exists in the Eurasian Economic Union. In fact, despite the existence of the Eurasian Economic Commission, the Eurasian Economic Union operates an extremely decentralized system of food safety control. At the country level the roles and responsibilities of institutions, while relatively clear in the EU countries, are not well defined or well understood in the countries of the EAEU. There are also major differences in the accession process within the two unions. While in the EU this is a long and transformative process, it is more a political process in the EAEU. Finally, while the EU seems to have a relatively effective system of food safety control, we find that in the EU the lack of Union-wide rules concerning the system of national controls means that there is no guarantee of coherence or comprehensiveness.
    Date: 2016
  7. By: Kaywana Raeburn; Jim Engle-Warnick; Sonia Laszlo
    Abstract: In this paper, we use economics experiment laboratory intruments to measure time, risk and ambiguity preferences, which we correlate with food choice factors (items that influence food choice) and actual food consumption measures. We find that present bias, and to a lesser extent risk preferences, are significantly correlated with the food choice factors of health, natural content, and weight control. We find these correlations to be less consistent with actual reported food chocies. This finding indicates a discrepancy between what individuals ideally would like to eat and what they actually consume. This finding suggests scope for intervention to bring the two into alignment.
    Keywords: Field Experiment,
    Date: 2016–08–24
  8. By: Luisa Natali; Sudhanshu Handa; David Seidenfeld; Benjamin Davis; Gelson Tembo; UNICEF Office of Research - Innocenti
    Abstract: In sub-Saharan Africa, the poorest region in the world, the number of cash transfer programmes has doubled in the last five years and reaches close to 50 million people. What is the impact of these programmes, and do they offer a sustained pathway out of ultra-poverty? In this paper we examine these questions using experimental data from two unconditional cash transfer programmes implemented by the Government of Zambia. We find far-reaching effects of these two programmes, not just on their primary objective, food security and consumption, but also on a range of productive and economic outcomes. After three years, we observe that household spending is 59 per cent larger than the value of the transfer received, implying a sizeable multiplier effect. These multipliers work through increased non-farm business activity and agricultural production.
    Keywords: cash transfers; poverty reduction; production increase;
    Date: 2016
  9. By: Freni, Giuseppe; Salvadori, Neri
    Abstract: Modern production theory (Kurz and Salvadori, 1995) is utilized to provide a textual analysis of the famous chapter "On Machinery" added by Ricardo in the third edition of his Principles and to reconstruct the examples that are reported there. Two sets of assumptions that rationalize the basic example presented by Ricardo are identified: a) the innovation concerns a non-basic commodity; b) the innovation concerns an agricultural commodity and it does not change the technology applied on the marginal land, which is still marginal after the innovation. Ricardo was aware of these two facts and he seems to have used the latter of the two in his initial example. In effect, the example holds perfectly well if it is assumed that the new machine is specific to a quality of land that is marginal neither in the pre-innovation nor in the post-innovation economy. When the innovation is introduced in the production of an industrial commodity (cloth) that is used by the workers, as in the second example discussed by Ricardo, the rate of profits, and therefore the rate of growth, cannot be the same in the pre-innovation and in the post-innovation economy, unless the innovation is introduced in a switch-point between the technique employed prior to the innovation and that used after the innovation. This is too strong an assumption and can be of some interest only if it provides information about events that occur in the vicinity of a switch point. This “continuity” assumption is what Ricardo seems to have used as the basis for discussion in his second example.
    Keywords: Ricardo, David; Machinery
    JEL: B12 B51 J2 J23 O33
    Date: 2016–08–30
  10. By: Kamal Saggi (Vanderbilt University); Mark Wu (Harvard University)
    Abstract: Trade in agricultural products raises sensitivities, particularly when imports originate from a trading partner experiencing an outbreak of some type of agricultural disease. In this Article, we explain why despite the negative externalities associated with diseased imports, an importing country is generally not permitted to ban such imports outright under WTO law. Rather, it is allowed to do so only under fairly specific circumstances. We also highlight how the recent India – Agricultural Products ruling contributes to the jurisprudence of two issues concerning the SPS Agreement: the interpretation of international standards, and the relationship between the risk assessment and scientific evidence requirements.
    Keywords: trade in agricultural products, disease, trade policy, WTO dispute
    JEL: F1 K0
    Date: 2016–08–27
  11. By: Bachev, Hrabrin
    Abstract: Despite its importance research on the governance of agrarian sustainability is still at the beginning stage due to the “newness” of the problem, emerging new challenges, fundamental modernization during recent years, “lack” of long-term experiences and relevant data, application of narrow (certain form or management level); one-dimensional, unisectioral, normative, without transaction costs etc. approaches. The goal of this paper is to suggest a modern and practical framework for analyzing and assessing the system of governance of agrarian sustainability. New interdisciplinary New Institutional Economics framework is incorporated and agrarian sustainability property defined, principle mechanisms and modes of governance (institutions, market, private, public, hybrid). of agrarian sustainability classified, and a holistic approach for identifying components and factors, assessing efficiency, and improving the system of governance presented. Suggested framework is to be further discussed and improved while its application requires new type of micro and macro-economic data for agrarian agents’ preferences and behaviour, activities and efficiency of farming organisations, effects and impacts on social, community and natural environment, etc.
    Keywords: agrarian sustainability, market, private, public governance
    JEL: Q1 Q12 Q13 Q15 Q18 Q5 Q51 Q56
    Date: 2016
  12. By: Matthew Adler (Duke University School of Law); David Anthoff (Energy and Resources Group, University of California); Valentina Bosetti (Bocconi University); Greg Garner (The Pennsylvania State University); Klaus Keller (The Pennsylvania State University and Carnegie Mellon University); Nicolas Treich (INRA, University of Toulouse)
    Abstract: The social cost of carbon (SCC) is a monetary measure of the harms from carbon emission. Specifically, it is the reduction in current consumption that produces a loss in social welfare equivalent to that caused by the emission of a ton of CO2. The standard approach is to calculate the SCC using a discounted-utilitarian social welfare function (SWF)—one that simply adds up the well-being numbers (utilities) of individuals, as discounted by a weighting factor that decreases with time. The discounted-utilitarian SWF has been criticized both for ignoring the distribution of well-being, and for including an arbitrary preference for earlier generations. Here, we use a prioritarian SWF, with no time-discount factor, to calculate the SCC in the integrated assessment model RICE. Prioritarianism is a well-developed concept in ethics and theoretical welfare economics, but has been, thus far, little used in climate scholarship. The core idea is to give greater weight to well-being changes affecting worse off individuals. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCC.
    Keywords: Prioritarianism, Social Welfare Function, Social Cost of Carbon
    JEL: Q54 I30
    Date: 2016–08
  13. By: Rodrigo Aranda Balcazar (Department of Economics, Tulane University); Michael Darden (Department of Economics, Tulane University); Donald Rose (School of Public Health and Tropical Medicine, Tulane University)
    Abstract: The New York City Calorie Labeling Mandate of 2008 required fast food restaurants to post calorie information for all standardized items. We estimate the impact of the mandate on the rate of obesity using data from the Selected Metropolitan/Metropolitan Area Risk Trends of the Behavioral Risk Factor Surveillance System (SMART-BRFSS) from 2004 to 2010. We show that the mandate plausibly reduced the obesity rate by 2.5 percentage points - a 12% decline. Our results are robust to a variety of sensitivity checks and strengthened by various placebo tests. Using data from the Consumer Expenditure Survey and the American Time Use Survey, we show that our obesity result was not driven by changes in fast food frequency or expenditure but may have been driven by a large increase in the extensive margin of physical activity.
    Keywords: Information Asymmetry; Obesity; Calorie Labeling
    JEL: D82 D83 I12 I18
    Date: 2016–08

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