nep-agr New Economics Papers
on Agricultural Economics
Issue of 2017‒10‒29
twenty-two papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Ratios and benchmarks as tools for local food hub decision-making: a comparative case study By Lyons, Savanna May
  2. A Viable and Cost-Effective Weather Index Insurance for Rice in Indonesia By Aditya Kusuma; Ilan Noy; Bethanna Jackson
  3. Logging concessions, certification and protected areas in the Peruvian Amazon: forest impacts from development rights and land-use restrictions By Jimena Rico; Stephanie Panlasigui; Colby J. Loucks; Jennifer Swenson; Alexander Pfaff
  4. "Traditional Elites: Political Economy of Agricultural Technology and Tenancy" By Sabrin Beg
  5. Climate Risk, Cooperation, and the Co-Evolution of Culture and Institutions By Buggle, Johannes; Durante, Ruben
  6. New Zealand and Indian Trade in Agricultural and Manufactured Products: An Empirical Analysis By Sayeeda Bano; Frank Scrimgeour
  7. Economic Origins of Cultural Norms: The Case of Animal Husbandry and Bastardy By Eder, Christoph; Halla, Martin
  8. Global Energy and Sustainable Development: Introduction By Halkos, George
  9. Emerging trends in European food, diets and food industry By Santeramo, Fabio Gaetano; Carlucci, Domenico; De Devitiis, Biagia; Seccia, Antonio; Stasi, Antonio; Viscecchia, Rosaria; Nardone, Gianluca
  10. Food vs. Fuel? Impacts of Petroleum Shipments on Agricultural Prices. By James B. Bushnell; Jonathan E. Hughes; Aaron Smith
  11. Effects of Emigration on Rural Labor Markets By Agha Ali Akram; Shyamal Chowdhury; Ahmed Mushfiq Mobarak
  12. Crop insurance policies in 2014 By Plastina, Alejandro
  13. Farm bill and changes for dairy producers By Schulte, Kristen
  14. The Effects of Mandatory Disclosure of Supermarket Prices By Ater, Itai; Rigbi, Oren
  15. Modeling Fluctuations in the Global Demand for Commodities By Kilian, Lutz; Zhou, Xiaoqing
  16. Comparing the stock market and Iowa land values: a question of timing By Duffy, Mike
  17. "Favoritism and Flooding: Clientelism and Allocation of River Waters" By Sabrin Beg
  18. One cow per poor family: effects on consumption and crop production in Rwanda By Nilsson, Pia; Backman, Mikaela; Bjerke, Lina; Maniriho, Aristide
  19. Review crop marketing fundamentals in new video series By Hart, Chad; Johnson, Steven D.
  20. Unequal household carbon footprints in China By Dominik Wiedenhofer; Dabo Guan; Zhu Liu; Jing Meng; Zhang, Ning; Wei, Yi-Ming
  21. Trade in unhealthy foods and obesity: Evidence from Mexico By Osea Giuntella
  22. Slamming the door on trade policy discretion? The WTO Appellate Body's ruling on market distortions and production costs in EU-Biodiesel (Argentina) By Crowley, M.; Hillman, J.

  1. By: Lyons, Savanna May
    Abstract: Food hubs, or local food aggregation and distribution businesses, are triple-bottom-line firms that play an increasingly important role in connecting small and mid-sized farmers to wholesale and retail markets. This paper explores how food hubs can use their financial data to identify and address strengths and challenges in their operations. We propose a “dashboard†of key metrics and benchmarks for food hub managers, and apply it a comparative case study of four food hubs over three years of operations. We compare and contrast the liquidity, cash flow, efficiency, solvency and repayment capacity of the four cases, and analyze cross-cutting themes.We find that although the food hubs varied in their business structure and composition of sales outlets, they all faced the challenges of limited working capital, labor inefficiencies, high debt-asset ratios, and limited profitability. Some firms were able to break even below the $1 million sales level typically cited as a food hub breakeven point, but still struggled to maintain positive profits, suggesting that they remained in a “breakeven†phase even as they grew. All of the food hubs owned relatively few fixed assets and used relatively little term debt from outside sources. Modest net worth and small total asset size left each firm vulnerable to insolvency in years of negative profit. However, with bootstrapping techniques such as renting or sharing equipment and collecting payments quickly, in general they used their assets efficiently.We evaluate the usefulness of our metrics and benchmarks in analyzing food hubs, and offer suggestions on how recordkeeping could be improved to make financial analysis easier. Finally, we return to the literature to make recommendations for managers on resolving challenges seen in the metrics, including problems with cash flow, solvency, labor efficiency and turnover, inventory management, and pricing.
    Date: 2016–01–01
  2. By: Aditya Kusuma; Ilan Noy; Bethanna Jackson
    Abstract: The potentially adverse effects of droughts on agricultural output are obvious. Indonesian rice farmers have no financial protection from climate risk via catastrophic weather risk transfer tools. Done well, a weather index insurance (WII) program can not only provide resources that enable recovery, but can also facilitate the adoption of prevention and adaptation measures and incentivise risk reduction. Here, we quantify the applicability, viability, and likely cost of introducing a WII for droughts for rice production in Indonesia. To reduce basis risk, we construct district specific indices that are based on the estimation of Panel Geographically Weighted Regressions models. With these spatial tools, and detailed district level data on past agricultural productivity and weather conditions, we present an algorithm that generates an effective and actuarially sound WII, and measure its effectiveness in reducing income volatility for farmers. We use data on annual paddy production in 428 Indonesian districts, reported over the period 1990-2013, and climate data from 1950-2015. We use the monthly Palmer Drought Severity Index and identify district-specific trigger and exit points for the insurance plan. We quantify the impact of this hypothetical insurance product using past production data to calculate an actuarially-robust and welfare-enhancing price for this scheme.
    Keywords: index insurance, rice, Indonesia
    JEL: Q54
    Date: 2017
  3. By: Jimena Rico (Banco de Mexico); Stephanie Panlasigui (Duke University); Colby J. Loucks (WWF – USA); Jennifer Swenson (Duke University); Alexander Pfaff (Duke University)
    Abstract: Economic activities (agriculture, logging, mining) drive tropical forest loss, so balancing development and conservation involves tradeoffs – as well as synergies. Conservation policies, such as protected areas (PAs), may save more forest when they include some development rights (Pfaff et al. 2014). There is less evidence about when development policies, such as logging concessions, include some conservation restrictions. The right to log creates an incentive for private firms to defend their forest assets, although firms could raise or reduce forest loss depending upon their capacities to defend, their motivations to log and public oversight. Reduced loss may be rewarded through voluntary certification or third-party oversight of logging practices, whose impact we hypothesize depends upon firms’ logging motivations and their capacities to restrict loss. To shed empirical light, we examine forest impacts from rights and restrictions within the Peruvian Amazon during 2000-2013, removing biases using location and year effects. Compared to control forests outside of concessions and PAs, we find PAs reduce tree-cover loss − while those PAs that include development rights save more forest than strict PAs, for each region. Logging concessions reduce forest loss in Madre de Dios, yet they increase loss in Ucayali. Certification has an impact – 1% reduction in 2000-2013 forest loss − only in Madre de Dios, consistent with higher certification impacts if private firms choose to restrict loss.
    Keywords: certification, FSC, deforestation, logging concessions, Peru
    JEL: Q23 Q56 Q24 O13
    Date: 2017–10
  4. By: Sabrin Beg (Department of Economics, University of Delaware)
    Abstract: Traditional elites can perpetuate their political influence through agricultural relationships. I show that landlords in Pakistan can make cost-effective transfers to sharecropper-tenants, thereby gaining tenants' electoral support and controlling policy. Technological change in agriculture makes sharecropping less optimal, attenuating landlords' electoral advantage. Exogenous productivity change lowers the rate of sharecropping and lowers the likelihood of election of landlords in landlord-dominated areas; in turn electoral competition improves and the composition of public goods shifts. While demonstrating clientelism in rural agrarian societies through sharecropping contracts, I also highlight how changes in agricultural technology affect it.
    Keywords: Land Inequality; Clientelism; Public Goods; Colonial Institutions; Electoral Competition, Traditional Chiefs; Political Economy; Elite Capture; Agricultural Productivity.
    JEL: O10 O13
    Date: 2017
  5. By: Buggle, Johannes; Durante, Ruben
    Abstract: This research examines the historical relationship between economic risk and the evolution of social cooperation. We hypothesize that norms of generalized trust developed in pre-industrial times as a result of experiences of cooperation triggered by the need of subsistence farmers to cope with climatic risk. These norms persisted over time, even after climate had become largely unimportant for economic activity. We test this hypothesis for Europe combining high-resolution climate data for the period 1500-2000 with survey data at the sub-national level. We find that regions with higher inter-annual variability in precipitation and temperature display higher levels of trust. This effect is driven by variability in the growing season months, and by historical rather than recent variability. Regarding possible mechanisms, we find that regions with more variable climate were more closely connected to the Medieval trade network, indicating a higher propensity to engage in inter-community exchange. These regions were also more likely to adopt inclusive political institutions earlier on, and are characterized by a higher quality of local governments still today. Our findings suggest that, by favoring the emergence of mutually-reinforcing norms and institutions, exposure to environmental risk had a long-lasting impact on human cooperation.
    Keywords: Climate; Cooperation; Persistence; Political Institutions; Risk; Trust
    JEL: N53 O11 O13 Q54 Z10
    Date: 2017–10
  6. By: Sayeeda Bano (University of Waikato); Frank Scrimgeour (University of Waikato)
    Abstract: This study examines and presents a model of manufactured and agricultural exports from New Zealand to India and the world and from India to New Zealand. Our findings show that a country’s population, GDP, GDP per capita and exchange rate are important causal factors that influence both New Zealand’s and India’s agricultural and manufactured exports. Our findings also demonstrate that New Zealand agricultural exports are highly elastic with respect to average population, showing that a one percent increase in the average population/or market size can increase New Zealand agricultural exports to India by six percent. This is contrary to the conventional wisdom about low elasticity pessimism with respect to agricultural products. These results have policy implications in the context of trade negotiations between New Zealand and India at the bilateral level and the Regional Comprehensive Economic Partnership (RCEP) in which both New Zealand and India are participating.
    Keywords: international trade; agricultural exports; manufactured exports; India-New Zealand Free Trade Agreement FTA; RCEP
    JEL: F01 F02 F10 F13 F14 Q1
    Date: 2017–10–27
  7. By: Eder, Christoph; Halla, Martin
    Abstract: We explore the origins of the cultural norm regarding illegitimacy and test the hypothesis that traditional agricultural production structures influenced the historical illegitimacy ratio, and have a lasting effect until today. Based on data dating back to the Austro-Hungarian Empire, we use exogenous variation in the local agricultural suitability to show that descendants from societies focusing on animal husbandry (and not crop farming) are today still more likely to have a non-marital birth.
    JEL: J13
    Date: 2017
  8. By: Halkos, George
    Abstract: Energy is a very important topic of research driving the modern world. Energy production and consumption are associated with a number of environmental effects that require effective and affordable management. Demanding an enormous amount of energy an immense dispute of energy is scale counted by energy efficiency. Oil and other fossil fuel depletion, reliance on foreign energy sources, energy needs of poorer countries, economic efficiency versus population growth debate, environmental issues like climate change, renewable and other alternative energy sources are some of the issues of concern. This Special Issue contributes to some of the important issues of global energy and sustainability. The applied theoretical and analytical contributions are expected to provide guidance to policy-makers and government officials in designing new policy scenarios for the investigation of the energy consumption and economic growth nexus. The empirical contributions provide also evidence to support and inform current policy debates.
    Keywords: Energy; sustainability; development.
    JEL: O11 Q40 Q48 Q5 Q56 Q58
    Date: 2017
  9. By: Santeramo, Fabio Gaetano; Carlucci, Domenico; De Devitiis, Biagia; Seccia, Antonio; Stasi, Antonio; Viscecchia, Rosaria; Nardone, Gianluca
    Abstract: Understanding how an adequate food security may be determined, how nutritional intakes evolve over time and are influenced by global dynamics are few of the questions scholars are trying to answer. In addition, a great interest is devoted to the changes in consumers’ preferences and expectations as well as to the analysis of food innovations and their impact on the global market. We review the recent and emerging trends in food supply chains of selected sectors (fruits and vegetables, meat, and seafood), and deepen on emerging trends in the food industry. By presenting the evidence provided by the literature and emphasizing the unresolved research questions, we offer a critical view of future directions that should be followed by research agenda.
    Keywords: Diet; Fruit and vegetable; Functional food; Meat; Nanotechnology; Seafood
    JEL: D11 D12 Q11 Q18
    Date: 2017–10–10
  10. By: James B. Bushnell; Jonathan E. Hughes; Aaron Smith
    Abstract: Grain shippers and political figures in North Dakota and nearby states have voiced concern that the dramatic increases in shipments of crude oil by rail have caused service delays and higher costs. We investigate the potential impact of crude shipments on grain markets accounting for harvest effects and other potential sources of rail congestion. Increased crude oil shipments are associated with substantially larger spreads between wheat prices at regional elevators and in Minneapolis, the market hub. The effect on corn and soybean spreads are an order of magnitude smaller. Increased oil traffic is associated with small increases in rail rates but large increases in rail car auction prices. We document increases in wheat carry (storage) costs and decreases in shipment quantities. Surprisingly, little of the spread increase is due to lower prices paid to farmers, suggesting consumers rather than producers paid the cost of increased rail congestion.
    JEL: H22 Q02
    Date: 2017–10
  11. By: Agha Ali Akram; Shyamal Chowdhury; Ahmed Mushfiq Mobarak
    Abstract: Rural to urban migration is an integral part of the development process, but there is little evidence on how out-migration transforms rural labor markets. Emigration could benefit landless village residents by reducing labor competition, or conversely, reduce productivity if skilled workers leave. We offer to subsidize transport costs for 5792 potential seasonal migrants in Bangladesh, randomly varying saturation of offers across 133 villages. The transport subsidies increase beneficiaries’ income due to better employment opportunities in the city, and also generate the following spillovers: (a) A higher density of offers increases the individual take-up rate, and induces those connected to offered recipients to also migrate. The village emigration rate increases from 35% to 65%. (b) This increases the male agricultural wage rate in the village by 4.5-6.6%, and the available work hours in the village by 11-14%, which combine to increase income earned in the village, (c) There is no intra-household substitution in labor supply, but primary workers within households earn more during weeks in which many of their village co-residents moved away. (d) The wage bill for agricultural employers increases, which reduces their profit, with no significant change in yield. (e) Food prices increase by 2.7% on net, driven by an increase in the price of (fish) protein, and offset by (f) a decrease in the price of non-tradables like prepared food and tea. Seasonal migration subsidies not only generate large direct benefits, but also indirect spillover benefits by creating slack in the village-of-origin labor market during the lean season.
    JEL: J43 J61 O1 O18 R13 R23
    Date: 2017–10
  12. By: Plastina, Alejandro
    Date: 2016–03–28
  13. By: Schulte, Kristen
    Date: 2016–03–28
  14. By: Ater, Itai; Rigbi, Oren
    Abstract: We study how mandatory online disclosure of supermarket prices affects prices and price dispersion in brick-and-mortar stores. Using data collected before and after a transparency regulation went into effect in the Israeli food retail market, multiple complementary control groups and relying on a differences-in-differences research design, we document a sharp decline in price dispersion and a 4% to 5% drop in prices following the transparency regulation. The price drop varied across stores and products; it was smaller among branded products than among private-label products, and it was smaller among stores and products that were likely to have been associated with more intense search patterns even before prices became transparent (e.g., products in heavy-discount chains; popular products; products that meet stringent kosher requirements). Finally, we show that prices declined as more consumers used price-comparison websites, and we highlight the role of media coverage in encouraging retailers to set lower prices.
    Keywords: Price Transparency; Information; Mandatory Disclosure; Retail Food; Supermarkets
    JEL: D83 L66 L81
    Date: 2017–10
  15. By: Kilian, Lutz; Zhou, Xiaoqing
    Abstract: It is widely understood that the real price of globally traded commodities is determined by the forces of demand and supply. One of the main determinants of the real price of commodities is shifts in the demand for commodities associated with unexpected fluctuations in global real economic activity. There have been numerous proposals for quantifying global real economic activity. We discuss which criteria a measure of global real activity must satisfy to be useful for modeling commodity prices, we examine which of the many alternative measures in the literature are most suitable for applied work, and we explain why some popular measures are inappropriate for modeling commodity prices. Given these insights, we reexamine in detail the question of whether global real economic activity has declined since 2011 and by how much. Drawing on a range of new evidence, we show that the global commodity price boom of the 2000s appears to have been largely transitory. Our analysis has important implications for the design of structural models of commodity markets, for the analysis of the transmission of commodity price shocks to commodity-importing and exporting economies, and for commodity price forecasting.
    Keywords: Commodity market; demand; global economy; international business cycle; leading indicators; oil price; real economic activity
    JEL: F44 Q11 Q31 Q41 Q43
    Date: 2017–10
  16. By: Duffy, Mike
    Date: 2016–03–25
  17. By: Sabrin Beg (Department of Economics, University of Delaware)
    Abstract: Political favoritism is commonly documented in developing democracies, demonstrated by better outcomes in favored regions. There is little understanding of the mechanisms driving such allocation of resources. I demonstrate favoritism in the allocation of agricultural resources, which eventually affect agricultural production. I use close elections to get random variation in a region's alignment with the political party in power and find that water may be diverted to favor areas aligned with the ruling party. Water availability is in favor of upstream districts and against downstream districts when upstream districts are aligned with the ruling party. The opposite is true when downstream regions are aligned with the ruling party. As a result of this favoritism, floods (or droughts) are less likely to occur in downstream regions, and agricultural yields are better there when the ruling party has incentives to favor them. I argue that the ruling party's influence over autonomous agencies that control water allocation allow them to favor their constituents.
    Keywords: Favoritism, Clientelism, Conflict, Environment, Irrigations, Dams
    JEL: O15 Q25 D72 R11
    Date: 2017
  18. By: Nilsson, Pia (Discipline of Economics, Finance and Statistics, Jönköping International Business School, Jönköping University & Centre for Spatial Entrepreneurship and Spatial Economics (CEnSE), Jönköping University.); Backman, Mikaela (Discipline of Economics, Finance and Statistics, Jönköping International Business School, Jönköping University, Centre for Spatial Entrepreneurship and Spatial Economics (CEnSE), Jönköping University & Centre of Excellence for Science and Innovation Studies (CESIS).); Bjerke, Lina (Discipline of Economics, Finance and Statistics, Jönköping International Business School, Jönköping University & Centre for Spatial Entrepreneurship and Spatial Economics (CEnSE), Jönköping University.); Maniriho, Aristide (School of Economics, University of Rwanda, Kigali, Rwanda.)
    Abstract: A random sample of households in Rwanda are used to estimate the effects of the one cow policy on consumption and crop production during 2010-2014. A first-differenced model that takes into account the selection bias and placement effect associated with the policy and heterogeneity across households is estimated. Findings show a positive effect of receiving a cow on crop production, indicating that fertilizers provided by the cattle has enabled households to increase their agricultural production. Findings also point to the importance of knowledge and experience of rearing livestock for the outcome on consumption to realize.
    Keywords: Girinka; consumption; crop production; CEM; Rwanda
    JEL: O12 R12 R20
    Date: 2017–10–23
  19. By: Hart, Chad; Johnson, Steven D.
    Date: 2016–03–30
  20. By: Dominik Wiedenhofer; Dabo Guan; Zhu Liu; Jing Meng; Zhang, Ning; Wei, Yi-Ming
  21. By: Osea Giuntella
    Abstract: This paper investigates the effects of trade in food on obesity in Mexico. We classifyMexican food imports from the U.S. into healthy and unhealthy and match thesewith anthropometric and food expenditure survey data. We exploit variation acrossMexican states in their exposure to food imports from the U.S.. We fi nd that imports ofunhealthy foods signi cantly contribute to the rise of obesity in Mexico. The empiricalevidence also suggests that unhealthy food imports may widen health disparitiesbetween education groups. By linking imports to food expenditure and obesity, thepaper sheds light on an important channel through which globalization may affecthealth.
    Date: 2017–01
  22. By: Crowley, M.; Hillman, J.
    Abstract: This paper presents a legal-economic analysis of the Appellate Body's decision in EU-Biodiesel (Argentina) that the WTO's Anti-Dumping Agreement (ADA) does not permit countries to take into account government-created price distortions of major inputs when calculating antidumping duties. In this case, the EU made adjustments to the price of biodiesel's principal input - soybeans - in determining the cost of production of biodiesel in Argentina. The adjustment was made based on the uncontested finding that the price of soybeans in Argentina was distorted by the existence of an export tax scheme that resulted in artificially low soybean prices. The Appellate Body found that the EU was not permitted to take tax policy-induced price distortions into account in calculating dumping margins. We analyze the economic rationale for Argentina's export tax system, distortions in biodiesel markets in Argentina and the EU, and the remaining trade policy options for addressing distorted international prices. We also assess whether existing subsidies disciplines would be more effective in addressing this problem and conclude that they would not.
    Keywords: WTO, anti-dumping, export tax, cost adjustment, government distortion, subsidy
    JEL: F13 F53
    Date: 2017–10–05

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