nep-agr New Economics Papers
on Agricultural Economics
Issue of 2017‒08‒06
sixteen papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. The Role of Export Restrictions in Agricultural Trade By Carmen Estrades; Manuel Flores; Guillermo Lezama
  2. Economic Valuation of Forest Ecosystem Services in Kenya: Implication for Design of PES Schemes and Participatory Forest Management By Boscow Okumu; Edwin Muchapondwa
  3. Reality of Food Losses: A New Measurement Methodology By Delgado, Luciana; Schuster, Monica; Torero, Maximo
  4. Technical efficiency of dairy farms in Uruguay: a stochastic production frontier analysis By Gabriela Pérez Quesada
  5. Dynamics of Smart Specialisation Agri-food Trans-regional Cooperation By Katerina Ciampi Stancova; Alessio Cavicchi
  6. Charges for Water and Access: What Explains the Differences in West Virginia Municipalities? By Elham Erfanian; Alan R. Collins
  7. Food, Drought and Conflict Evidence from a Case-Study on Somalia By Astrid Sneyers
  8. Environmental Problems and Policies in Kazakhstan: Air pollution, waste and water By Lyazzat Nugumanova; Miriam Frey; Natalya Yemelina; Stanislav Yugay
  9. Identifying Phosphorus Hot Spots: A spatial analysis of the phosphorus balance as a result of manure application By Stefan Borsky; Alexej Parchomenko
  10. Climate Change: Perceptions, Reality and Agricultural Practice: Evidence from Nepal By N; a Kaji Budhathoki
  11. Welfare Analysis in a Two-Stage Inverse Demand Model: An Application to Harvest Changes in the Chesapeake Bay By Chris Moore; Charles Griffiths
  12. A two-level delay in payments contract for supply chain coordination: The case of credit-dependent demand. By Heydari, J.; Rastegar, M.; Glock, C. H.
  13. Commercial fishing and outdoor recreation benefits of water quality improvements in the Chesapeake Bay By David M. Massey; Chris Moore; Stephen C. Newbold; Tom Ihde; Howard Townsend
  14. 30 Years of Being Wrong: A Systematic Review and Critical Test of the Cox and Wohlgenant Approach to Quality-Adjusted Prices in Demand Analysis By John Gibson; Bonggeun Kim
  15. Quota flexibility in multi-species fisheries By Singh, Rajesh; Weninger, Quinn
  16. Estimating Market Power: Evidence from the US Brewing Industry By Paul Scott

  1. By: Carmen Estrades (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Manuel Flores (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República y Geneva School of Economics and Management (Suiza)); Guillermo Lezama (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: Between 2006 and 2011, in a global context of rising food prices, many countries applied price-isolating policies, among them export restrictions. As countries are not obliged to notify WTO about the imposition of export restrictions, there is not good information about the measures applied. We fill this void by building a comprehensive database on export restrictions applied in the agricultural sector worldwide between 2005 and 2014. Using the Export Restriction in Agriculture (ERA) database, we assess the effects of export restrictions on agricultural trade and global food prices in 2005-2013. To do so, we estimate a disaggregated gravity model of trade. Clear evidence of export restrictions affecting world prices is limited to a handful of sectors, and weak evidence suggests that it may exist in some other sectors. We also find weak evidence of an impact of import promoting policies on agricultural prices. These results highlights the idea that export restrictions should be addressed at the multilateral level, but negotiations on export restrictions should not be disassociated from talks on other price-insulating policies.
    Keywords: export restrictions, export taxes, export bans, agricultural prices, gravity model
    JEL: F14 Q17 F13 C33 Q18
    Date: 2017–05
  2. By: Boscow Okumu; Edwin Muchapondwa
    Abstract: Forest ecosystem services are critical for human well-being as well as functioning and growth of economies. However, despite the growing demand for these services, they are hardly given due consideration in public policy formulation. The values attached to these services by local communities are also generally unknown in developing countries. Using a case study of the Mau forest conservancy the study applied a choice experiment technique employing the efficient design criteria to value salient forest ecosystem services among forest adjacent communities. The values attached to various ecosystem services were estimated using the conditional logit, random parameter logit model and random parameter logit model with interactions. The results revealed high level of preference heterogeneity across households and that communities would prefer conservation programs that would guarantee them improved forest cover, reduced flood risk and high water quality and quantity for drinking but would experience a loss in welfare for choosing an alternative with medium wildlife population. One significant finding from the study is the altruistic nature of forest adjacent communities as revealed by the high willingness to pay for flood mitigation showing that they are not just concerned with the private benefits accruing to them but also the welfare of the society. Overall, we found that there is much appreciation for the role of forest ecosystem services and that forest adjacent communities are more pro conservation mainly motivated by the direct use and non-use values. In terms of policy, the information forms a basis for the design of market based incentives such as PES and the roll out, design and implementation of participatory forest management. Policy makers also need to focus on policy options with higher mean welfare impacts to deepen community involvement in forest conservation while taking into account the heterogeneity in preferences to ensure equity.
    Keywords: choice experiment, ecosystem services, Incentives, PES
    JEL: Q23 Q28 Q51 Q57
    Date: 2017–07
  3. By: Delgado, Luciana; Schuster, Monica; Torero, Maximo
    Abstract: Measuring food loss, identifying where in the food system it occurs, and developing effective policies along every stage of the value chain are essential first steps in addressing the problem of food loss in developing countries. Food loss has been defined in many ways, and disagreement remains regarding proper terminology and measurement methodology. Although the terms “post-harvest loss,” “food loss,” and “food loss and waste” are frequently used interchangeably, they do not refer consistently to the same aspects of the problem. In addition, none of these classifications includes pre-harvest losses. Figures regarding food loss remain highly inconsistent, precise causes of food loss remain undetected, and success stories of decreasing food loss remain few. We improve over this measurement gap on food losses by developing and testing the methodology traditionally used with three new methodologies that aim to reduce the measurement error in assessing the magnitude of food loss. The methods account for losses from the pre-harvest stage through product distribution and include both quantity loss and quality deterioration. We apply the instrument to producers, middlemen, and processors in seven staple food value chains in five developing countries. Throughout the different estimation methodologies, losses at the producer level represent between 60 and 80 percent of total value chain losses, while the average loss at the middleman and processor level lies around 7 and 19 percent, respectively. Differences across methodologies are salient, especially at the producer level. While the estimation results from the three new methods implemented are close and the differences are mostly not statistically significant, the aggregate self-reported method reports systematically lower loss figures. Finally, our results show the major reasons behind the losses identified for each commodity and country. Specifically, we find that they included pests and diseases and lack of rainfall. When looking at the produce left in the field, the major reason for the loss is a lack of appropriate harvesting techniques. Finally, the loss reported at the post-harvest level is due mostly to damage done during selection, as a result of workers’ lack of training and experience in selecting the produce. Therefore, technology, improved seeds and the proper soil management techniques together with better market access could help to substantially reduce the losses at the producer level.
    Keywords: Losses, Value Chains, PHL, Food Loss and Waste
    JEL: D24 Q13 Q18
    Date: 2017–07–25
  4. By: Gabriela Pérez Quesada
    Abstract: The productivity of Uruguayan dairy farms has been consistently growing for the last 40 years. This process has implied the adoption of new technologies which have had significant effects on the production system. The efficiency with which available technologies are used influence output growth. Hence, assuring and enhancing dairy farms’ productivity and efficiency represent an important challenge to improve the competitiveness of the sector and achieve sustained economic growth. The overall objective of this study is to analyze the efficiency performance of dairy farms in Uruguay. Using a cross-sectional database, this study estimates a Cobb-Douglas stochastic production frontier and technical inefficiency model for dairy farms to determine the effect of each input on the production frontier and the principal factors that explain differences in farm efficiency. Results show that the number of milking cows has the highest effect on production, followed by the total consumption of feed, including concentrated feed, hay and silage. Although veterinary, agronomic and accounting assistance matter, the major determinants of efficiency differences are farmers’ specialization in dairy farming and the usage of artificial insemination. Overall, farm profiles indicate that those in the high efficiency group achieve a higher level of milk production than those less efficient; and they produce under a more intensive production system than farmers in low efficiency groups.
    Keywords: stochastic production frontier, Uruguayan dairy farms, technical efficiency, cross-sectional data
    JEL: Q10 Q19 D24
    Date: 2017–06
  5. By: Katerina Ciampi Stancova (European Commission - JRC); Alessio Cavicchi
    Abstract: The objective of this paper is to inform the community of researchers, policymakers and practitioners about the dynamics of setting up the Thematic Smart Specialisation Platform on Agri-food, and to provide information about its functioning and governance. This work outlines the milestones of the process and the main achievements. The paper proposes the steps to be followed by policymakers and regional officers who are motivated to lead, support and actively contribute to a thematic platform within the Thematic Smart Specialisation Platform on Agri-food. At the same time, it discusses specific cases of such partnerships and describes the motivations and objectives of the regions that decided to embark on the journey towards establishment of specific thematic partnerships through this Platform.
    Keywords: Regional innovation policy, smart specialisation, trans-regional cooperation, Thematic Smart Specialisation Platform on Agri-food.
    Date: 2017–07
  6. By: Elham Erfanian (Regional Research Institute, West Virginia University); Alan R. Collins (Davis College Division of Resource Management, West Virginia University)
    Abstract: Applying linear and log-log functional forms plus spatial econometric analyses to a dataset of 125 municipal water utilities, we investigate the determinants of charges for water use and minimum monthly access to water across West Virginia municipalities in 2014. Water charges models are consistent with the theory of water cost determination as water source, debt, and economies of size plus scale influence what household consumers pay for water. Based on model results, groundwater use by utilities lowers water charges and is estimated to save household customers in West Virginia over $3.6 million annually. West Virginia households typically pay far below the OECD standard of 3 to 5% of household income for municipal water, which may explain why socioeconomic factors do not influence minimum charges for access.
    Keywords: water charges, social equity, utilities, spatial econometrics
    JEL: H40 Q25 D24
    Date: 2017–07–31
  7. By: Astrid Sneyers (nternational Security and Development Center LICOS, Centre for Institutions and Economic Performance, University of Leuven, Belgium)
    Abstract: This paper aims at disentangling the mutual link between conflict, drought and food security in Somalia. The analysis is conducted using various indicators for food security and on different (national and sub- national) aggregation levels. The evidence is partly based on datafrom a household-level survey, collected in various regions in Somalia in 2013. In addition, we use geo-spatial regional and district level data, which combines (geo-referenced) drought data, with information on conflict from the joined ACLED-PRIO database, together with other location-specific variables. Overall, we find a positive effect of drought on the percentage underweight individuals for pastoral livelihoods on the regional level. At the same time, drought seems to have a small linear increasing effect on the ratio of rural populations in stressed, crisis, and emergency food security situations, while there seems to be no significant effect for urban populations. Based on household panel data, a negative effect of drought on non-food expenditures is found as well as a negative effect of conflict on non-food expenditures, confirming that these households buy less non-food items when confronted with distressing situations. Furthermore, we find an increasing effect of one-sided, intrastate, and internationalized conflict on the percentage underweight individuals on the regional level. In addition, we also find a negative effect of conflict exposure on food expenditures for pastoral (rural) households, in contrast with urban households. This emphasizes the fact that conflict has a more profound effect on the food security of rural households, notwithstanding their functions as food producers. Finally, on the district level, we do not find substantial evidence that drought triggers conflict. In contrast, on the household level we find strong evidence for this, suggesting that conflict analysis at a lower aggregation level does reveal findings that we may not pick up on at a higher aggregation level.
    Keywords: none JEL Classification: none
  8. By: Lyazzat Nugumanova (Leibniz Institute for East and Southeast European Studies); Miriam Frey; Natalya Yemelina; Stanislav Yugay
    Abstract: We provide a comprehensive overview of the current state of environmental governance concerning air pollution, water problems and waste generation in Kazakhstan. The overview of the environmental and institutional framework in these fields reveals that major environmental problems exist in the country. Some steps have already been taken to ensure a proper management of air, waste and water. However, more coordinated cross-sectoral actions, both on the regional and the national level, need to be undertaken to ensure a productive cooperation between state institutions, business and the society.
    Keywords: air pollution, waste generation, water usage, environmental policy, institutions, Kazakhstan
    JEL: O13 O44 Q53
    Date: 2017–05
  9. By: Stefan Borsky (University of Graz); Alexej Parchomenko (Vienna University of Technology)
    Abstract: In this paper, we analyze the phosphorus balance as a result of manure application on the parish level for Denmark and investigate its local geographic distribution. For our analysis, we determine phosphorus loads for the five main animal groups and the phosphorus demand of the fifteen major crop categories. To identify statistical significant local patterns of phosphorus over- and undersupply we apply Getis-Ord Gi* hot spot analysis. Our results show that there is a large variability in the phosphorus balance within Denmark. Statistically significant hot spots appear mainly along the west coast, while cold spots are predominantly present on southern and eastern coasts towards the Baltic Sea. The proximity of oversupply areas to water bodies and other environmental sensitive areas reinforces the need for further phosphorus regulation. These findings show the importance of a spatial targeted regulation, which allows different levels of phosphorus application depending on local economic and environmental circumstances, e.g., distance to an environmental sensitive region.
    Keywords: Hotelling model, packaged goods, network effect, horizontal product differentiation
    JEL: L14 L15 L17 L86
    Date: 2017–07
  10. By: N; a Kaji Budhathoki
    Abstract: The study investigates whether the farmers' perception of changes in climate have led toany changes in their farming practices over the last three decades. The study surveyed 496farmers living near 10 meteorological stations in Nepal for their understanding of climatechange between 1980 and 2014 and adaptation strategies in terms of farming practices inresponse to perceived change. The results show that nearly all farmers attributed changesin crops grown, in crop varieties, and other farming practices to technological, market,and other factors rather than climate change. A comparison of farmer perceptions andmeteorological data showed that farmers' perceptions of changes in minimum temperatureand rainfall over the period did not match actual trends in this period in the stations nearwhere they lived. However, their perception of changes in maximum temperature did matchthe observed trends at the stations quite well, possibly because the trends in this variablewere clearer than those for the minimum rates. The results of the study demonstrate that theclimate change signal in Nepal during the 1980-2014 period has not been clear and strongenough to have a consistent impact on farmers' perceptions or, even more so, on theiragricultural practices. The study found no evidence that adaptation to climate change hasoccurred. This suggests that for farmers to effectively adapt to future climate change, bettercommunication of expected changes in climate from responsible state and non-state actorsmay be necessary.
  11. By: Chris Moore; Charles Griffiths
    Abstract: Like many agricultural commodities, fish and shellfish are highly perishable and producers cannot easily adjust supply in the short run to respond to changes in demand. In these cases, it is more appropriate to conduct welfare analysis using inverse demand models that take quantities as given and allow prices to adjust to clear the market. One challenge faced by economists conducting demand analysis is how to limit the number of commodities in the analysis while accounting for the relevant substitutability and complementarity among goods. A common approach in direct demand modeling is to assume weak separability of the utility function and apply a multi-stage budgeting approach. This approach has not, however, been applied to an inverse demand system or the associated welfare analysis. This paper develops a two-stage inverse demand model and derives the total quantity flexibilities which describe how market clearing prices respond to supply changes in other commodity groups. The model provides the means to estimate consumer welfare impacts of an increase in finfish and shellfish harvest from the Chesapeake Bay while recognizing that harvests from other regions are potential substitutes. Comparing the two-stage results with single-stage analysis of the same data shows that ignoring differentiation of harvests from different regions, or the availability of substitutes not affected by a supply shock, can bias welfare estimates.
    Keywords: Two-stage budgeting, Inverse demands, Compensating surplus
    JEL: D12 D61 Q11 Q22
    Date: 2017–07
  12. By: Heydari, J.; Rastegar, M.; Glock, C. H.
    Date: 2017–05–08
  13. By: David M. Massey; Chris Moore; Stephen C. Newbold; Tom Ihde; Howard Townsend
    Abstract: We estimated the economic benefits of the Chesapeake Bay TMDL to commercial fish harvesters and consumers, recreational anglers, and other outdoor recreators. To forecast the impacts of the TMDL on harvested fish and shellfish stocks in the bay and connected Atlantic coast waters, we used a summary of judgments from an expert panel and a multi-species model of Chesapeake Bay fisheries. We estimated benefits to consumers in commercial fish markets using a multi-stage inverse demand system, which models price as a function of exogenous supply and accounts for substitution possibilities between 13 different species and as many as five regions. Models were estimated using monthly harvest data from the years 1991 to 2011. The estimated parameters of the inverse demand systems were then used to calculate compensating and equivalent variation from the changes in harvests between the baseline and TMDL scenarios. To estimate producer surplus changes, we assumed that fishing effort will remain fixed at recent levels in each fishery, so harvesting costs do not increase due to the TMDL. The resulting estimates of commercial fishing benefits range between $3 and $26 million per year. We also examined the implications of alternative assumptions about the management regime in each fishery, including fixed effort, open access, and maximum sustainable surplus. We calculated benefits to recreational anglers using a linked participation and site-choice recreation demand model. The model was estimated using angler intercept survey data from the Marine Recreational Fisheries Statistics Survey (MRFSS). Catch rates were calculated using historic reported catch from the MRFSS. We accounted for the sample selection bias caused by the non-random intercept survey sampling design using weights based on historic visitation frequencies at each intercept site. The intercept data were used to estimate a random utility site-choice model, and counts of trips from respondent zip codes were used to estimate a negative binomial participation model conditional on the inclusive value of all sites as estimated by the site-choice model. The resulting estimates of recreational fishing benefits range between $5 and $59 million per year. We used a separate recreation demand model to estimate the benefits associated with other outdoor recreation activities. The model was estimated using aggregate data on the total number of visitors to national and state parks in Maryland, Virginia, and Delaware. The aggregate visitation data alone are insufficient to estimate all parameters of the model, so these data were supplemented with survey data on the number of recreation trips taken to the Chesapeake Bay collected from a random sample of individuals in the study area. The marginal effects of water quality on recreators’ site choices were estimated in a second-stage regression, using estimates of site-specific constants from the first-stage site-choice model as the dependent variable and measures of average water quality conditions and other fixed site attributes as explanatory variables. The central estimates of the outdoor recreation benefits (exclusive of recreational fishing) are between $105 to $280 million per year.
    Keywords: Chesapeake Bay, water quality, TMDL, hypoxia, commercial fisheries, recreational fisheries, outdoor recreation demand model, inverse demand system, bioeconomic model
    JEL: Q22 Q26 Q51 Q57
    Date: 2017–07
  14. By: John Gibson (University of Waikato); Bonggeun Kim (Seoul National University)
    Abstract: Most demand studies in agricultural economics fail to estimate quality responses to price. Instead, following Cox and Wohlgenant (1986), quality choice is dealt with by adjusting unit values rather than by treating quality as a valid consumer response to model. Studying a two-choice problem in this manner cannot identify either the price elasticity of quantity or the price elasticity of quality, and instead will yield some unidentified hybrid of the quality and quantity responses. We review 150 papers that cite Cox and Wohlgenant (1986) to see how widespread is the neglect of quality responses to price in the literature. Almost 90 percent of studies wrongly mix quality responses to price in with their reported quantity demand elasticities, thus, overstating by how much price rises can be expected to moderate the quantity consumed. Our empirical test, for 32 food and drink groups in Vietnam, shows that the Cox and Wohlgenant method exaggerates quantity responses to price by a factor of three, on average, and hardly differs from what naïve approaches with unit values show. These results cast doubt on three decades of reported price elasticities of quantity demand estimated from household survey data.
    Keywords: demand; household surveys; quality; price; unit values
    JEL: D12 I10
    Date: 2017–08–03
  15. By: Singh, Rajesh; Weninger, Quinn
    Abstract: We evaluate management implications of cross-species flexibility in a multiple-species individual fishing quota regulation. We derive fishermen’s privately optimal harvesting and discarding choices under a joint-in-inputs, costly-targeting technology and the complex mapping between quotas set by the regulator and harvest and discard outcomes. Flexibility can reduce fishery rent due to reduced control of harvest outcomes. Empirical evidence from the Gulf of Mexico commercial reef fish fishery is presented to test model predictions. We find no evidence that flexibility reduced discards caused by random quota overages. Discarding in the data is attributed to a particularly small quota and a much larger quota set for jointly harvested species.
    Date: 2017–07–26
  16. By: Paul Scott (Toulouse School of Economics)
    Abstract: While inferring markups from demand data is common practice, estimation relies on difficult-to-test assumptions, including a specific model of how firms compete. Alternatively, markups can be inferred from production data, again relying on a set of difficult-to-test assumptions, but a wholly different set, including the assumption that firms minimize costs using a variable input. Relying on data from the US brewing industry, we directly compare markup estimates from the two approaches. After implementing each approach for a broad set of assumptions and specifications, we find that both approaches provide similar and plausible markup estimates in most cases. The results illustrate how using the two strategies together can allow researchers to evaluate structural models and identify problematic assumptions.
    Date: 2017

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