nep-agr New Economics Papers
on Agricultural Economics
Issue of 2017‒06‒11
twenty papers chosen by

  1. How Sustainable Are Benefits from Extension for Smallholder Farmers? Evidence from a Randomised Phase-Out of the BRAC Program in Uganda By Stephen C. Smith; Ram Fishman; Vida BobicÌ; Munshi Sulaiman
  2. Import substitution in the agro food complex of Russia. By Generalova Svetlana Vladimirovna
  3. Technology Adoption, Capital Deepening, and International Productivity Differences By Chaoran Chen
  4. The Hedonic Approach to Vineyard Site Selection: Adaptation to Climate Change and Grape Growing in Emerging Markets By Ashenfelter, Orley
  5. Estimating the link between farm productivity and innovation in the Netherlands By Johannes Sauer
  6. Managing the Impact of Climate Change on Migration: Evidence from Mexico By Chort, Isabelle; de la Rupelle, Maëlys
  7. Collective action when public good returns are heterogeneous By Abigail Barr; Trudy Owens; Ashira Perera
  8. Elements of an Index-based Margin Insurance. An Application to Wheat Production in Austria By Karin Heinschink; Franz Sinabell; Thomas Url
  9. Immaterial and Monetary Gifts in Economic Transactions - Evidence from the Field By Michael Kirchler; Stefan Palan
  10. Diversification of production of agricultural products in terms of import substitution. By Generalova Svetlana Vladimirovna
  11. Diversification of production of agricultural products as a priority direction of the development of agricultural economics in the context of realization of the program of import substitution. By Generalova Svetlana Vladimirovna
  12. Agricultural impacts of the Great East Japan Earthquake - six years later By Bachev, Hrabrin; Ito, Fusao
  13. The role of investment incentives for structural transformation a comparative analysis of investment incentives legislations in Sub-Saharan African, South-Asian and South-East Asian By Galli, Rossana.
  14. Production choices with water markets: The role of initial allocations and forward trading By Bontems, Philippe; Nauges, Céline
  15. Portugal’s wine globalization waves, 1750-2015 By Pedro Lains
  16. Price elasticities for disaggregated expenditures By François Gardes
  17. Impact of Natural Disasters on Income Inequality in Sri Lanka By Subhani Keerthiratne
  19. Alternative User Costs, Productivity and Inequality in US Business Sectors By W. Erwin Diewert; Kevin J. Fox
  20. Body-Weight and Women's Hours of Work: More Evidence That Marriage Markets Matter By Grossbard, Shoshana; Mukhopadhyay, Sankar

  1. By: Stephen C. Smith (George Washington University); Ram Fishman (Tel Aviv University); Vida BobicÌ (George Washington University); Munshi Sulaiman (Save the Children)
    Abstract: Many development programs are based on short-term interventions, either because of external funding constraints or because it is assumed that impacts persist post program termination (“sus- tainability†). Using a novel randomized phase-out research method, we provide experimental tests of the effects of program phase-out in the context of a large-scale agricultural input subsidy and extension program operated by the NGO BRAC to increase the use of improved seed varieties and basic farming practices among women smallholders in Uganda. We find that while supply of im- proved seeds through local, BRAC trained women declined, demand does not diminish, and farmers shift purchases from BRAC to market sources, indicating a persistent learning effect. We also find no evidence of declines in the practice of improved and less costly cultivation techniques taught by the program. These results have implications for both efficient program design and for models of technology adoption.
    Keywords: Agricultural extension; Agricultural Technology Adoption; Food Security; Supply chain; Subsidies; Randomized phase-out; Uganda
    JEL: O13 O33 I32 Q12
  2. By: Generalova Svetlana Vladimirovna (Russian Presidential Academy of National Economy and Public Administration- Stolypin Volga Region Institute of administration)
    Abstract: The article presents the results of the economic analysis of the structure and dynamics of the imports of foodstuffs and agricultural raw materials. This analysis allowed us to conclude that currently there is a high share of import of agricultural products and the overall import dependence of the agro-food complex, which necessitates a policy of accelerated import substitution.
    Keywords: Import substitution, import dependence, import share, agro food complex, food security, food imports and agricultural raw materials
    Date: 2016
  3. By: Chaoran Chen
    Abstract: Cross-country differences in capital intensity are larger in agriculture than in the non-agricultural sector. I build a two-sector model featuring technology adoption in agriculture. As the economy develops, farmers gradually adopt modern capital-intensive technologies to replace traditional labor-intensive technologies, as is observed in the U.S. historical data. Using this model, I find that technology adoption is key to explaining lower agricultural capital intensity and labor productivity in poor countries. By allowing for technology adoption, my model can explain 1.56-fold more in rich-poor agricultural productivity differences. I further show that land misallocation impedes technology adoption and magnifies productivity differences.
    Keywords: Agricultural Productivity, Technology Adoption, Capital Intensity, Misallocation.
    JEL: E13 O41 Q12 Q16
    Date: 2017–06–05
  4. By: Ashenfelter, Orley (Princeton University)
    Abstract: This paper shows how the hedonic approach to vineyard site selection can be used in the adaptation of vineyard land to climate change, natural disasters or other exogenous events. The basic idea is that, if the relation between weather and grape quality is known for each grape type in existing growing areas, then it is possible to predict the quality of grapes that would be produced in other locations, or in the same location with a changed climate. This permits the optimization of grape type selection for a location and also provides an indication of the value that a particular planting should produce. The relation of grape quality to the weather is provided for several well-known viticultural areas, including Burgundy, Bordeaux, Rioja, and the Piedmont. An application of the method to a new vineyard area in the Czech Republic following the demise of Communism is used to demonstrate the method.
    Keywords: vineyard site, hedonic method, grape growing, climate change
    JEL: O21 Q16 Q18
    Date: 2017–05
  5. By: Johannes Sauer (Technical University of Munich)
    Abstract: This report investigates the link between farm innovation and economic performance. The study uses a unique survey dataset maintained by Wageningen Economic Research in the Netherlands. A structural multi-stage model of firm-level innovation is applied. The model contains four steps: first, the decision of the farmer to innovate at all; second the innovation intensity, measured by expenditures on innovation activities; third the output of the innovation process, which is measured by realized product, process, organisational or marketing-related innovation; fourth, productivity changes as a result of innovation. The analysis is performed for two types of farms – dairy and crop farms – and covers the period from 2004 to 2014. A number of factors are found to be decisive for the magnitude and success of farm innovations in the Netherlands. Among them regulations and standards, the level of co-operation with knowledge producing institutions, own product and process-related development activities, farm size, the age of the farm operator as well as confidence in business and sector developments. Based on these and other results, the report derives implications for policies aimed at promoting farm innovation and productivity and sustainability in the agricultural sector.
    Keywords: agriculture, Dutch farms, Innovation, productivity
    JEL: O31 Q12 Q16
    Date: 2017–06–07
  6. By: Chort, Isabelle; de la Rupelle, Maëlys
    Abstract: This paper uses state-level migration ow data between Mexico and the U.S. from 1999 to 2011 to investigate the migration response to climate shocks and the mitigating impact of an agricultural cash-transfer program (PROCAMPO) and a disaster fund (Fonden). Our results suggest that lower than average precipitations increase undocumented migration, especially from the most agricultural states. Fonden amounts are found to mitigate the effect of climate shocks on migration by lowering the undocumented migration response to precipitation anomalies. Similarly an increase in the state-level share of PROCAMPO funds to non-irrigated plots in the ejido sector decreases migration after a shock.
    Keywords: International migration,Climate change,Public policies,Weather variability,Natural disasters,Mexico-U.S. migration
    JEL: F22 Q54 Q18 J61
    Date: 2017
  7. By: Abigail Barr; Trudy Owens; Ashira Perera
    Abstract: We adopt a mixed methods approach to investigate whether and how heterogeneity in individual returns to a public good affects contributions. We engage smallholder farmers in Sri Lanka in: a one-shot, framed, lab-in-the-field experiment, within which the farmers’ rates of return to the public good are exogenously varied; and a survey including a question about their willingness to contribute time to the construction of a specific, relevant to them public good. In the former, we find weak evidence that heterogeneity in individual returns increases contributions. In the latter we find that those facing higher returns contribute more. We conclude that heterogeneity in returns does not explain why collective action remains a challenge in farming communities in developing countries.
    Keywords: lab-type behavioural experiment, collective action, heterogeneity, public goods JEL Classification: C93, D81, O12
    Date: 2017
  8. By: Karin Heinschink; Franz Sinabell (WIFO); Thomas Url (WIFO)
    Abstract: Farmers may use financial market instruments to hedge price risks. Moreover, various types of insurance products are on the market to protect against production losses. An insurance that covers losses of both input and output prices was recently introduced in the USA. We develop this concept further by proposing a prototype of an index-based margin insurance which accounts for both production risks and price risks (input and output prices). The prototype is based on standardised gross margin time series for specific activities. It accounts for revenues, variable costs by cost item, various insurance coverage levels, and gross margin. Indemnities are paid if the gross margin falls short of a determined level. We identify steps necessary to accomplish a market-ready insurance product (e.g., data validation, defining the details of the sub-indexes and the premium calculation, evaluating acceptance on the market prior to its launch). Using Austrian data, the innovative approach is exemplified with respect to different farm management practices, more specifically for the case of conventional and organic wheat production. Farmers could benefit from such a margin insurance since production and price risks would be covered in one scheme, thus reducing opportunity costs.
    Keywords: natural hazards, price risk, margin insurance
    Date: 2017–05–29
  9. By: Michael Kirchler (Department of Banking and Finance, University of Innsbruck; Department of Economics, University of Gothenburg); Stefan Palan (Department of Banking and Finance, University of Graz; Department of Banking and Finance, University of Innsbruck)
    Abstract: Reciprocation of monetary gifts is well-understood in economics. In contrast, there is little research on reciprocal behavior following immaterial gifts like compliments. We close this gap and investigate how employees reciprocate after receiving immaterial and material gifts. We purchase (1) ice cream from fast food restaurants, and (2) durum doner, a common lunch snack, from independent vendors. Prior to the food's preparation, we either compliment or tip the salesperson. Salespersons reciprocate compliments with higher product weight than in a control treatment. This reciprocal behavior grows over repeated transactions. Tips have a stronger level effect which marginally decreases over time.
    Date: 2016–05–10
  10. By: Generalova Svetlana Vladimirovna (Russian Presidential Academy of National Economy and Public Administration- Stolypin Volga Region Institute of administration)
    Abstract: The article reveals the essence and purpose of the diversification of agricultural production in the conditions of import substitution. Settle the causes that gave rise to the need to deepen the process of diversification of agricultural production to meet the requirements of import substitution in Russia.
    Keywords: diversification, import substitution, agricultural products.
    Date: 2016
  11. By: Generalova Svetlana Vladimirovna (Russian Presidential Academy of National Economy and Public Administration- Stolypin Volga Region Institute of administration)
    Abstract: In article the essence and purpose of diversification of agricultural products in the context of import substitution. Justified causes that gave rise to the need for deepening the process of diversification of agricultural products, taking into account the requirements of import substitution in Russia. CLASSIFICATION:
    Keywords: Diversification of types of diversification, import substitution, agricultural products, agriculture.
    Date: 2016
  12. By: Bachev, Hrabrin; Ito, Fusao
    Abstract: On March 11, 2011 the strongest ever recorded in Japan earthquake occurred, also known as the Great East Japan Earthquake, which triggered a powerful tsunami and caused a nuclear accident in one of the world biggest nuclear power stations - Fukushima Daichi. More than six years after the triple disaster the overall impacts on Japanese agri-food chains is far from being completely due to the scale of the disasters and the number of affected agents, the effects’ multiplicities, spillovers, and long time horizon, the constant evolution of the nuclear crisis, the lack of “full” information and models of analysis, etc. This paper presents updates on the impacts of the March 2011 earthquake, tsunami and Fukushima nuclear accident in Japan on country’s agriculture and food sector. First, disaster events and their effects is outlined. Second, impact on farms and agricultural resources is estimated. Third, impact on food industries is assessed. Next, extend of radioactive contamination of agri-food products is presented and effects on markets, consumers and international trade evaluated. Chapter summarises responses of different agents, assesses progress and challenges in post-disaster recovery and reconstruction, and withdraw lessons from the Japanese experiences.
    Keywords: March 11, 2011 Great East Japan Earthquake, socio-economic, environmental, agricultural impacts, Japan
    JEL: D0 I0 Q0 Q4 Q5 Q51 Q52 Q53 Q54 Q57 Q58 R0 Y4
    Date: 2017–04
  13. By: Galli, Rossana.
    Abstract: This study is based on comparative analysis of tax and investment legislations currently used by several sub-Saharan African, South Asian and South East Asian developing countries and on country-specific cases of financial incentives in the same regions. Based on this survey, the paper individuates common and innovative practices, and investigates the potential outcomes of specific investment incentives regulations with respect to different structural transformation and inclusive development policy goals, on different agents and at different stages of development. In particular, we examine fiscal and financial incentives in relation to five policy goals related to structural transformation and inclusive development: domestic value added augmentation, local supply chains development, promotion of quality-certified production, SMEs development, and employment generation. The expected beneficial outcomes and possible drawbacks of the examined investment incentives are presented, and a number of possible regulation improvements and supportive policies are suggested. In this way, the paper aims to offer guidance about the design of investment incentives directed at structural transformation and inclusive development goals.
    Keywords: structural adjustment, investment promotion, legal aspect, developing countries, Africa South of Sahara, South Asia, South East Asia
    Date: 2017
  14. By: Bontems, Philippe; Nauges, Céline
    Abstract: We develop a theoretical model that describes risk-averse farmers' decisions when facing production risk due to uncertain weather conditions and when irrigation water can be traded on a market. We focus on the role of initial water allocations granted to irrigated farms at the start of the season. The presence of water markets makes the future water price uncertain and hence the value of initial water allocations uncertain. We analyze the properties of this background risk and study how initial water allocations impact farmers' land allocation decisions between an irrigated crop and a non-irrigated crop, both characterized by random expected net returns. We then extend the model by permitting irrigation water to be traded ex-ante at a known price (forward market). Finally, we illustrate our main theoretical findings using simulations. Assumptions made on the distributions of the random variables were chosen to be representative of the situation of irrigated farms located in the Murray-Darling Basin in Australia, where a water market has been in place for several decades.
    Keywords: water markets, risk, agriculture.
    Date: 2017–05
  15. By: Pedro Lains (Institute of Social Sciences, University of Lisbon)
    Abstract: From 1750 to 2015 we may detect three waves of globalization of wines produced in Portugal, namely, port wine exports for the British market in the 18th century, common wines exports to France in the second half of the 19th century, and finally the growth of exports to European markets from the last decade of the 20th century up to the present times. This chapter explores the fundamentals of such waves looking at trends in output, productivity, domestic and foreign consumption, commercial agreements and economic policies. The first two waves came to halt as conditions in the foreign markets changed, because they did not have a solid domestic base of production and commercialization. The chapter argues that the third wave is of a different kind as it developed from a more solid domestic base of the wine sector that had developed for decades based on domestic consumption. Thus we may conclude that wine globalization is also about changing domestic economic conditions. The process was however long and painful, as the sector had a very irregular performance throughout the 20th century which is however related to the overall backwardness of the Portuguese economy in the European context.
    Keywords: Portugal, Agriculture, Wine, Globalization, Domestic markets, Competitiveness
    JEL: N53 N54 O13 Q11 Q17
    Date: 2017–05
  16. By: François Gardes (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: The relation between price elasticities computed at different levels of aggregation is a prominent question in the evaluation of price effects in the empirical literature on households' consumption, production or international trade. We propose to model it under a strong separability assumption in order to estimate price elasticities at a disaggregated level when only price aggregates are available in the dataset. The estimation of price elasticities for aggregates consumptions uses an original domestic production model combining monetary expenditures and time uses for aggregate activities in order to calculate full prices of these aggregates. The method is applied for food expenditures on surveys of two different countries, France and Burkina Faso
    Keywords: domestic production; full price elasticity; Pigou law
    JEL: C33 D1 D13 J22
    Date: 2017–05
  17. By: Subhani Keerthiratne (Department of Economics, University of Sussex; Central Bank of Sri Lanka, Colombo, Sri Lanka)
    Abstract: We explore the relationship between natural disasters and income inequality in Sri Lanka as the first study of this nature for the country. The analysis uses a unique panel data set constructed for the purpose of this paper. It contains district inequality measures based on household income reported in six waves of the Household Income and Expenditure Survey of Sri Lanka during the period between 1990 and 2013, data on disaster affected population and other economic and social indicators. Employing a panel fixed effects estimator, we find that contemporaneous natural disasters and their immediate lags significantly and substantially decrease inequality in per adult equivalent household income as measured by the Theil index. Findings are robust across various inequality metrics, sub-samples and alternative estimators such as Ordinary Least Squares and System GMM. However, natural disasters do not affect household expenditure inequality. Either households behave as if they have a permanent income or all households reduce their expenditure proportionately irrespective of their income level in responding to natural disasters. Natural disasters decrease non-seasonal agricultural and non-agricultural income inequality but increase seasonal agricultural income inequality. Income of richer households is mainly derived from non-agricultural sources such as manufacturing and business activities and non-seasonal agricultural activities. Poorer households have a higher share of agricultural income.
    Keywords: Natural disasters, economic impact, income inequality
    JEL: Q54 O11 O15
    Date: 2017–05
  18. By: Courtney Bir; Nicole Olynk Widmar; Nathan Thompson (Department of Agricultural Economics, College of Agriculture, Purdue University, W. Lafayette, IN); Christopher A. Wolf (Department of Agricultural, Food, and Resource Economics,Michigan State University, East Lansing, MI)
    Abstract: Management strategies in the dairy industry, including those involved in dairy cattle reproductive management, continue to evolve as new technologies are introduced. In June of 2014, 2,980 surveys were sent to dairy farms in the United States. The survey was developed to obtain data regarding management and performance of currently operating dairy farms. Most of the operations were owned by a single operator, but the management team often incorporated other individuals such as other family members, nutritionist(s) or veterinarian(s). Although many operators still used paper records and did not include written contracts when dealing with suppliers, many used sophisticated reproductive management programs.
    Keywords: dairy; management;reproduction
    JEL: Q10 Q12
    Date: 2017
  19. By: W. Erwin Diewert (Vancouver School of Economics, University of British Columbia, and School of Economics, UNSW); Kevin J. Fox (School of Economics and CAER, UNSW)
    Abstract: Using the new Bureau of Economic Analysis (BEA) Integrated Macroeconomic Accounts as well as other BEA data, we construct productivity accounts for two key sectors of the US economy: the Corporate Nonfinancial Sector (Sector 1) and the Noncorporate Nonfinancial Sector (Sector 2). Calculating user costs of capital based on, alternatively, ex post and predicted asset price inflation rates, we provide alternative estimates for capital services and Total Factor Productivity growth for the two sectors. Rates of return on assets employed are also reported for both sectors. In addition, we compare rates of return on assets employed and TFP growth rates when the land and inventory components are withdrawn from the asset base. Finally, implications for labour and capital shares from using alternative income concepts are explored.
    Keywords: User cost of capital, Total Factor Productivity, rate of return on assets, Integrated Macroeconomic Accounts, Bureau of Economic Analysis, ex post and ex ante asset inflation rates, US Nonfinancial Sector, Austrian model of production, balancing rates of return, inequality.
    JEL: B25 C43 C82 D24 E22 E43
    Date: 2017–05
  20. By: Grossbard, Shoshana (San Diego State University); Mukhopadhyay, Sankar (University of Nevada, Reno)
    Abstract: Higher body-weight (BMI) can affect labor supply via its effects on outcomes in both labor markets and marriage markets. To the extent that it is associated with lower prospects of being in couple and obtaining intra-couple transfers, we expect that higher BMI will increase willingness to supply labor in labor markets, especially for women. We use US panel data from the NLSY79 and NLSY97 to examine whether body weight influences hours of work in the labor market. We use sibling BMI as an instrument for own BMI to address potential endogeneity of BMI in hours worked. We find that White women with higher BMI work more. This is true for both single and married White women. Results for other groups of women and men produce mixed results. The extended analysis suggests that what drives the relationship between BMI and hours worked is not lower market wages earned by high-BMI women, but rather lower spousal transfers to married women or lower expected intra-marriage transfers to single women.
    Keywords: obesity, labor supply, marriage prospects, intra-household division of resources
    JEL: J22 I12 J12
    Date: 2017–05

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