nep-agr New Economics Papers
on Agricultural Economics
Issue of 2017‒10‒15
fifteen papers chosen by

  1. Agricultural Trade Reform, Reallocation and Technical Change: Evidence from the Canadian Prairies By Brown, Mark; Ferguson, Shon; Viju, Crina
  2. Contract Farming, Farm Mechanization, and Agricultural intensification: The Case of Rice Farming in Cote d’Ivoire By MANO, Yukichi Y.; TAKAHASHI, Kazushi; OTSUKA, Keijiro
  3. Heterogeneity, Measurement and Misallocation in African Agriculture By Christopher Udry; Douglas Gollin
  4. Simulated vs. Empirical Weather Responsiveness of Crop Yields: U.S. Evidence and Implications for the Agricultural Impacts of Climate Change By Malcolm N. Mistry; Ian Sue Wing; Enrica De Cian
  5. The Persistent Effects of Monsoon Rainfall Shocks in India: A Nonlinear VAR Approach By Hertweck, Matthias; Brey, Bjoern
  6. The Role of Standards in North-South Trade: The Case of Agricultural Exports from Sub-Saharan African Countries to the EU By Susanne Fricke; Geoffrey Chapman
  7. The nature and response to the 1930s agrarian crisis : Spain in a European perspective By Simpson, James
  8. Hydrodynamic influence on reservoir sustainability in semi-arid climate: A physicochemical and environmental isotopic study By Rawaa Ammar; Véronique V. Kazpard; Antoine G. El Samrani; Nabil Amacha; Zeinab Z. Saad; Lei Chou
  9. Delegating climate policy to a supranational authority: a theoretical assessment By Pichler, Paul; Sorger, Gerhard
  10. Systematic sensitivity analysis of the full economic impacts of sea level rise By T. Chatzivasileiadis; F. Estrada; M. W. Hofkes; R. S. J. Tol
  11. Microplots and food security: Encouraging replication studies of policy relevant research By Wood, Douglas Kuflick Benjamin; Vasquez, Maria
  12. Do Temperature Thresholds Threaten American Farmland? By Emanuele Massetti; Robert Mendelsohn
  13. Land-Use Regulations, Property Values, and Rents: Decomposing the Effects of the California Coastal Act By Severen, Christopher; Plantinga, Andrew
  14. The Distribution of Environmental Damages By Solomon Hsiang; Paulina Oliva; Reed Walker
  15. Social Interaction and Technology Adoption: Experimental Evidence from Improved Cookstoves in Mali By Jacopo Bonan; Pietro Battiston; Jaimie Bleck; Philippe LeMay-Boucher; Stefano Pareglio; Bassirou Sarr; Massimo Tavoni

  1. By: Brown, Mark (Statistics Canada); Ferguson, Shon (Research Institute of Industrial Economics (IFN)); Viju, Crina (Institute of European, Russian and Eurasian Studies)
    Abstract: We decompose the impact of trade reform on technology adoption and land use to study how aggregate changes were driven by reallocation versus within-farm adaptation. Using detailed census data covering over 30,000 farms in Alberta, Saskatchewan and Manitoba, Canada we find a range of new results. We find that the reform-induced shift from producing low-value to high-value crops for export, the adoption of new seeding technologies and reduction in summer fallow observed at the aggregate level between 1991 and 2001 were driven mainly by the within-farm effect. In the longer run, however, reallocation of land from shrinking and exiting farms to growing and new farms explains more than half of the aggregate changes in technology adoption and land use between 1991 and 2011.
    Keywords: Agricultural Trade Liberalization; Export Subsidy; Technical Change; Farm Size; Firm Heterogeneity
    JEL: F14 O13 Q16 Q17 Q18
    Date: 2017–09–26
  2. By: MANO, Yukichi Y.; TAKAHASHI, Kazushi; OTSUKA, Keijiro
    Abstract: It is critically important to intensify farming systems by disseminating proper agronomic practices and promoting the increased application of inputs to raise agricultural productivity in sub-Saharan Africa. However, the region’s public agricultural extension systems are weak, and their input and output markets often fail to function properly. Under these circumstances, contract farming (CF) is expected to be a promising way to overcome market imperfections by providing inputs, production training, and marketing services. We examine this possibility by analysing the case of rice production CF in Cote d’Ivoire. We find that CF did not lead to farming intensification, due mainly to the inadequate and uncertain provision of tractor services. Further analysis reveals a complementarity between tractor use and labour inputs, whereby tractor use in land preparation enhanced the adoption of input- and labour-intensive practices in subsequent farming activities, thereby increasing labour use and improving land productivity. The diffusion of tractors is thus likely to be key to the intensification of rice farming systems in sub-Saharan Africa.
    Keywords: contract farming, rice production, tractor, farm mechanization, agricultural intensification, Green Revolution, sub-Saharan Africa, Cote d’Ivoire
    JEL: N57 O12 O13 Q12 Q16 Q18
    Date: 2017–09
  3. By: Christopher Udry (Yale University); Douglas Gollin (University of Oxford)
    Abstract: Empirical analysis of farm-level data from African agriculture consistently shows enormous dispersion in measured total factor productivity (TFP) at the farm level. Some farmers achieve relatively high levels of TFP, but many farms appear to operate at very low levels of measured TFP. One possible explanation for this is that some farmers have low levels of skill but continue nevertheless to farm because of market failures or distortions that make it difficult for them to be bought out by more skillful farmers. Previous research has suggested that this kind of misallocation may be an important source of differences in agricultural productivity across countries – and thus an important explanation for cross-country differences in per capita income. This paper notes that misallocation can be difficult to distinguish empirically from a range of measurement errors, classical and non-classical. It can also be difficult to measure productivity well in a highly volatile production environment. Finally, differences in farmer quality can be observationally similar to heterogeneity in unobserved land quality. Our paper presents a theoretical framework and empirical results that seek to advance our understanding of the distinctions between heterogeneity, measurement error, and misallocation in African agriculture, using data from three African countries. We use within-farmer variation in factor shares and productivity across plots to disentangle measurement error, land productivity variation and transitory shocks from misallocation as sources of dispersion in factor allocation, output and TFP. Preliminary results suggest that both measurement error and unobserved heterogeneity in land quality can account for a large amount of the measured differences in farm productivity, and these results also imply that misallocation has a relatively modest impact on output.
    Date: 2017
  4. By: Malcolm N. Mistry (Università Ca' Foscari, FEEM and CMCC); Ian Sue Wing (Boston University); Enrica De Cian (FEEM and CMCC)
    Abstract: Global gridded crop models (GGCMs) are the workhorse of assessments of the agricultural impacts of climate change. Yet the changes in crop yields projected by different models in response to the same meteorological forcing can differ substantially. Through an inter-method comparison, we provide a first glimpse into the origins and implications of this divergence—both among GGCMs and between GGCMs and historical observations. We examine yields of rainfed maize, wheat, and soybeans simulated by six GGCMs as part of the Inter-Sectoral Impact Model Intercomparison Project-Fast Track (ISIMIP-FT) exercise, comparing 1981-2004 hindcast yields over the coterminous United States (U.S.) against U.S. Dept. of Agriculture (USDA) time series for about 1,000 counties. Leveraging the empirical climate change impacts literature, we estimate reduced-form econometric models of crop yield responses to temperature and precipitation exposures for both GGCMs and observations. We find that up to 60% of the variance in both simulated and observed yields is attributable to weather variation. Majority of the GGCMs have difficulty reproducing the observed distribution of percentage yield anomalies, and exhibit aggregate responses that show yields to be more weather-sensitive than in the observational record over the predominant range of temperature and precipitation conditions. This disparity is largely attributable to heterogeneity in GGCMs’ responses, as opposed to uncertainty in historical weather forcings, and is responsible for widely divergent impacts of climate on future crop yields.
    Keywords: Climate Change Impacts, Crop Yields, Global Gridded Crop Models, ISI-MIP
    JEL: Q1 Q5
    Date: 2017–09
  5. By: Hertweck, Matthias; Brey, Bjoern
    Abstract: We examine the effects of monsoon rainfall shocks on agricultural output, wages, and prices in India. The effects are highly asymmetric: agricultural output falls by 16% after a negative shock, but a positive shock has no significant effects. Although the drop in agricultural output is very short-lived, it elicits a persistent decline (increase) in wages (food prices). This indicates that famines are caused by a persistent disruption in food acquisition, rather than by a shortage in food supply.
    JEL: C22 E32 O13 Q11
    Date: 2017
  6. By: Susanne Fricke (Friedrich Schiller University Jena, Jena, Germany); Geoffrey Chapman (The University of Nottingham, Nottingham, UK)
    Abstract: The impact of product and production standards on trade flows is of critical relevance for developing countries aiming at a higher participation in world trade. While economic theory suggests that the effect of standards on trade can entail two opposing forces, acting either as non-tariff barrier to trade or as a competitive advantage on the world market, empirical evidence on the trade effect of standards remains ambiguous. We contribute to the literature by scrutinizing a set of 132 international agricultural standards, and their impact on export flows of the four main agricultural export products from Sub-Saharan African (SSA) countries to the EU. Our analysis includes cocoa, fruits, vegetables and coffee. We apply the gravity model of trade via the Poisson Pseudo Maximum Likelihood (PPML) estimator to both an aggregate estimation of the four product groups, as well as a product-specific estimation. The aggregate estimation yields a twofold result on the impact of standards on export flows: In a given year, the introduction of any of the standards in the EU leads to a significant reduction in exports, while the count of the standards in place in the EU has a significantly positive effect. This result is less distinct for the product-specific estimation, yielding both significantly positive and significantly negative impacts when analysing the impact of the 132 standards separately. Additionally, our results show that the SSA producers' 'ability to comply' with international standards positively impacts agricultural export flows. Moreover, we find a positive interaction between the effect of the introduction of any of the standards and the 'ability to comply'. This implies that a high 'ability to comply' with international standards can mitigate negative effects, or promote positive effects, on SSA export flows in instances when a standard is introduced in the EU.
    Keywords: Agricultural Trade, International Standards, Gravity Models
    JEL: F14 Q17
    Date: 2017–10–04
  7. By: Simpson, James
    Abstract: The impact of the Great Depression was less in Spain than in most other Western European countries, but government response to the problems was also more limited because of weak state capacity. As economic depression coincided with major changes in political opportunities and constrains created by the Second Republic, there were demands for radical changes in farm policy. Inappropriate policies (land reform) and contradictory goals (higher farm wages and lower food prices) weakened the popular support for the Republic, and quickly divided the Spanish countryside.
    Keywords: Second Republic; Spain; State Capacity; Land Reform; Great Depression
    JEL: R52 Q15 O13 N54
    Date: 2017–10–01
  8. By: Rawaa Ammar; Véronique V. Kazpard; Antoine G. El Samrani; Nabil Amacha; Zeinab Z. Saad; Lei Chou
    Abstract: Water scarcity and increasing water demand require the development of water management plans such as establishing artificial lakes and dams. Plans to meet water needs are faced by uprising challenges to improve water quality and to ensure the sustainability of hydro-projects. Environmental isotopes coupled to water physicochemical characteristics were investigated over a biennial cycle to assess both geomorphological and environmental impacts on the water quality of a reservoir situated in an intensively used agricultural watershed under a Mediterranean semi-arid climate. The particularity of the semi-arid climate and the diverse topography generate a continental and orographic rain effect on the isotopic composition of precipitation and the water recharged sources. The studied reservoir responds quickly to land-use activities and climatic changes as reflected by temporal and spatial variations of water chemistry and isotopic composition. Increasing changes in precipitation rate and dry periods significantly modified the water isotopic composition in the reservoir. During the first year, hydrogen (δD) and oxygen (δ18O) isotopes are depleted by 6 and 2‰ between dry and wet season, respectively. While a shift of −2‰ for δD and −1‰ for δ18O was detected during the second annual cycle. Environmental isotopic compositions demonstrate for the first time the occurrence of groundwater inflow to the central (Cz) and dam (Dz) zones of the Qaraaoun reservoir. The Cz and Dz can be considered as open water bodies subjected to dilution by groundwater inflow, which induces vertical mixing and reverse isotopic stratification of the water column. In the contrary, the river mouth zone acts as a closed system without groundwater intrusion, where heavy water accumulates and may act as a sink for contaminants during dry season. Groundwater influx acts as a dilution factor that renews the hypolimnion, and minimizes the perturbations induced by both internal biogeochemical reactions and external hydrological variations. Attention should be devoted to the hydrogeological location of planned reservoirs, which should take into account the vicinity of shallow water table to insure good water quality and water sustainability.
    Keywords: Environmental isotopes; Groundwater; Mediterranean basin; Reservoir; Resource sustainability; Semi-arid
    Date: 2017–07
  9. By: Pichler, Paul; Sorger, Gerhard
    Abstract: We study the delegation of climate policy to a supranational environmental authority. We demonstrate that the authority faces a dynamic inconsistency problem that leads to welfare losses. The losses can be kept small if the mandate of the authority penalizes the local cost of emissions heavily, but puts little or no weight on the cost of climate change. The design of the authority's mandate creates another dynamic inconsistency because the countries face a recurrent incentive to modify it.
    JEL: F53 H87 O33 Q43 Q54
    Date: 2017
  10. By: T. Chatzivasileiadis (Institute for Environmental Studies, Vrije Universiteit, Amsterdam); F. Estrada (Centro de Ciencias de la Atmosfera, Universidad Nacional Autonoma de Mexico, Ciudad Universitaria, Mexico; Institute for Environmental Studies, Vrije Universiteit, Amsterdam); M. W. Hofkes (Department of Economics, Vrije Universiteit, Amsterdam; Institute for Environmental Studies, Vrije Universiteit, Amsterdam; Department of Spatial Economics, Vrije Universiteit, Amsterdam); R. S. J. Tol (Institution Department of Economics, University of Sussex; Institute for Environmental Studies, Vrije Universiteit, Amsterdam; Department of Spatial Economics, Vrije Universiteit, Amsterdam; Tinbergen Institute, Amsterdam; CESifo, Munich)
    Abstract: The potential impacts of Sea Level Rise (SLR) due to climate change have been widely studied in the literature. However, the uncertainty and robustness of these estimates has seldom been explored. Here we assess the model input uncertainty regarding the wide effects of SLR on marine navigation from a global economic perspective. We systematically assess the robustness of Computable General Equilibrium (CGE) estimates to model’s inputs uncertainty. Monte Carlo (MC) and Gaussian Quadrature (GQ) methods are used for conducting a Systematic Sensitivity Analysis (SSA). This design allows to both explore the sensitivity of the CGE model and to compare the MC and GQ methods. Results show that, regardless whether triangular or piecewise linear Probability distributions are used, the welfare losses are higher in the MC SSA than in the original deterministic simulation. This indicates that the CGE economic literature has potentially underestimated the total economic effects of SLR, thus stressing the necessity of SSA when simulating the general equilibrium effects of SLR. The uncertainty decomposition shows that land losses have a smaller effect compared to capital and seaport productivity losses. Capital losses seem to affect the developed regions GDP more than the productivity losses do. Moreover, we show the uncertainty decomposition of the MC results and discuss the convergence of the MC results for a decomposed version of the CGE model. This paper aims to provide standardised guidelines for stochastic simulation in the context of CGE modelling that could be useful for researchers in similar settings.
    Keywords: CGE, Sea Level Rise, Systematic Sensitivity Analysis, Monte Carlo, GTAP
    JEL: C68 Q54
    Date: 2017–10
  11. By: Wood, Douglas Kuflick Benjamin; Vasquez, Maria
    Abstract: Replication research is a valuable, yet often misunderstood, tool for increasing our understanding of promising research findings. In their short paper below the authors discuss their principles for conducting replication research, explain how they picked a candidate study for replication, describe the robustness checks they would conduct in their replication plan, and give an overview of how they would interpret their replication results. The authors also describe some of their lessons learned after working in replication research for over five years.
    Keywords: Replication,food security,research transparency,impact evaluation
    JEL: Q18 O13
    Date: 2017
  12. By: Emanuele Massetti (Georgia Institute of Technology); Robert Mendelsohn (Yale School of Forestry and Environmental Studies)
    Abstract: Estimated Ricardian models have been criticized because they rely on mean temperatures and do not explicitly include extreme temperatures. This paper uses a cross sectional approach to compare a standard quadratic Ricardian model of mean temperature with a fully flexible daily temperature bin model of farmland values in the Eastern United States. The flexible bin model leads to smaller damages from warming than the quadratic mean specification, but the difference is not statistically significant. Although weather panel studies find high temperature events lead to large annual damage, high temperature events have no harmful effect on farmland values. The results are robust to alternative model specifications and data sets.
    Keywords: Agriculture, Climate Change, Weather, Crop Yields, Ricardian, Threshold
    JEL: Q1 Q5
    Date: 2017–09
  13. By: Severen, Christopher (Federal Reserve Bank of Philadelphia); Plantinga, Andrew (University of California, Santa Barrbara)
    Abstract: Land-use regulations can lower real estate prices by imposing costs on property owners, but may raise prices by restricting supply and generating amenities. We study the effects of the California Coastal Act, one of the nation’s most stringent land-use regulations, on prices and rents for multifamily housing units. The Coastal Act applies to a narrow section of the California coast, allowing us to compare properties on either side of the jurisdictional boundary. The Coastal Act offers several advantages for measuring the effects of land-use regulations, including plausible exogeneity of the boundary location, which we confirm using historical data on boundary placement, and orthogonality of the boundary to other jurisdictional divisions. Extending previous studies, we decompose the effects of the regulation into a local effect, the net price effect of restrictions on the subject property and its immediate neighbors, and an external effect, the value of amenities generated by restrictions on all properties within the regulated area. Data on multifamily housing rents are used to isolate the effect of restrictions on adjacent properties (the neighbor effect). Our analysis of multifamily housing prices reveals local and external effects of approximately +8% and +5%, respectively. The rent analysis indicates a zero neighbor effect, which suggests that the local benefits of the Coastal Act have not yet materialized but are expected to in the future. This interpretation of our results is supported by additional evidence on building ages and assessed building and land values.
    Keywords: land use regulation; housing prices; California Coastal Commission
    JEL: Q24 R14 R31 R38 R52
    Date: 2017–10–05
  14. By: Solomon Hsiang; Paulina Oliva; Reed Walker
    Abstract: Most regulations designed to reduce environmental externalities impose costs on individuals and firms. An active body of research has explored how these costs are disproportionately born by different sectors of the economy and/or across different groups of individuals. However, much less is known about the distributional characteristics of the environmental benefits created by these policies, or conversely, the differences in environmental damages associated with existing environmental externalities. We review this burgeoning literature and develop a simple and general framework for focusing future empirical investigations. We apply our framework to findings related to the economic impact of air pollution, deforestation, and climate, highlighting important areas for future research. A recurring challenge to understanding the distributional effects of environmental damages is distinguishing between cases where (i) populations are exposed to different levels or changes in an environmental good, and (ii) where an incremental change in the environment may have very different implications for some populations. In the latter case, it is often difficult to empirically identify the underlying sources of heterogeneity in marginal damages, as damages may stem from either non-linear and/or heterogeneous damage functions. Nonetheless, understanding the determinants of heterogeneity in environmental benefits and damages is crucial for welfare analysis and policy design.
    JEL: H23 I14 Q5 Q56
    Date: 2017–09
  15. By: Jacopo Bonan (FEEM and CMCC); Pietro Battiston (Scuola Superiore Sant’Anna); Jaimie Bleck (University of Notre Dame); Philippe LeMay-Boucher (Heriot Watt University); Stefano Pareglio (Università Cattolica del Sacro Cuore and FEEM); Bassirou Sarr (Paris School of Economics); Massimo Tavoni (Politecnico di Milano and FEEM)
    Abstract: We investigate the role of social interaction in technology adoption by conducting a field experiment in neighborhoods of Bamako. We invited women to attend a training/marketing session, where information on a more efficient cooking stove was provided and the chance to purchase the product at market price was offered. We randomly provided an information nudge on a peer’s willingness to buy an improved cookstove. We find that women purchase and use the product more when they receive information on a peer who purchased (or previously owned) the product, particularly if she is viewed as respected. In general, we find positive direct and spillover effects of attending the session. We also investigate whether social interaction plays a role in technology diffusion. We find that women who participated in the session, but did not buy during the intervention, are more likely to adopt the product when more women living around them own it. We investigate the mechanisms and provide evidence supporting imitation effects, rather than social learning or constraint interaction.
    Keywords: Technology Adoption, Social Interaction, Cookstoves, Mali
    JEL: D03 M31 O13 O33
    Date: 2017–09

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