nep-agr New Economics Papers
on Agricultural Economics
Issue of 2018‒02‒19
twenty-two papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Agricultural Investment in Africa: A Low Level… Numerous Opportunities By Fatima Ezzahra MENGOUB
  2. Climate Change and Agriculture: Farmer Adaptation to Extreme Heat By Fernando M. Aragón; Francisco Oteiza; Juan Pablo Rud
  3. Weather, Climate and Production Risk By Hongliang Zhang; John M. Antle
  4. Land-use change and livelihoods of non-farm households: The role of income from employment in oil palm and rubber in rural Indonesia By Bou Dib, Jonida; Krishna, Vijesh; Alamsyah, Zulkifli; Qaim, Matin
  5. Spatial distribution of the international food prices: unexpected randomness and heterogeneity By Tiziano Distefano; Guido Chiarotti; Francesco Laio; Luca Ridolfi
  6. Adaptation to Climate Change via Adjustment in Land Leasing: Evidence from Dryland Wheat Farms in the U.S. Pacific Northwest By Hongliang Zhang; Jianhong E. Mu; Bruce A. McCarl
  7. Structural Transformation and the Agricultural Wage Gap By Jorge Alvarez
  8. The Effects of Fair Trade Certification: Evidence from Coffee Producers in Costa Rica By Raluca Dragusanu; Nathan Nunn
  9. From famine to food security: Lessons for building resilient food systems: By Babu, Suresh Chandra; Dorosh, Paul A.
  10. Small-scale fishery of the Eastern Mediterranean Sea: A case study in the Kalymnos Island, Greece By Halkos, George; Roditi, Kyriakoula; Matsiori, Steriani; Vafidis, Dimitrios
  11. Evaluation of the Effect of the Older Americans Act Title III-C Nutrition Services Program on Participants' Food Security, Socialization, and Diet Quality By James Mabli; Elizabeth Gearan; Rhoda Cohen; Katherine Niland; Nicholas Redel; Erin Panzarella; Barbara Carlson
  12. Do Cash Transfers Trigger Investment? Evidence for Peru By Cristina Cirillo; Giorgia Giovannetti
  13. Woody Biomass Processing: Potential Economic Impacts on Rural Regions By Randall Jackson; Amir B. Ferreira Neto; Elham Erfanian
  14. Financial realities for farms in the European Union: Relationships between farming and governmental interactions within the Triple Helix concept By Martinho, Vítor João Pereira Domingues
  15. The powerful role of intangibles in the coffee value chain By Luis F. Samper; Daniele Giovannucci; Luciana Marques Vieira
  16. Getting to Denmark' : the Role of Elites for Development By Skovsgaard, Christian Volmar; Sharp, Paul; Lampe, Markus; Jensen, Peter Sandholt
  17. "Geographical Origins of Language Structures " By Oded Galor; Omer Ozak; Assaf Sarid
  18. International Commodity Prices and Civil War Outbreak: New Evidence for Sub-Saharan Africa and Beyond By Antonio Ciccone
  19. Relative prices and climate policy: How the scarcity of non-market goods drives policy evaluation By Drupp, Moritz A.; Hänsel, Martin C.
  20. Fostering productivity in the rural and agricultural sector for inclusive growth and sustainable development in Asia and the Pacific Abstract: By Upali Wickramasinghe
  21. Ranking the socioeconomic and environmental framework of European Union farms: A network analysis By Martinho, Vítor João Pereira Domingues
  22. Designing REDD+ contracts to resolve additionality issues By Mireille Chiroleu-Assouline; Jean-Christophe Poudou; Sébastien Roussel

  1. By: Fatima Ezzahra MENGOUB
    Abstract: Agricultural investment is a necessary requirement to develop and organize the agricultural sector in Africa. The African agricultural potential offers opportunities to be seized in terms of intensification of production and structuring of the agricultural value chains. Although it is diversified, agricultural investment (public, private and foreign investments), remains weak. The shift towards a modern and intensive mode of agriculture must necessarily go through the development of a comprehensive agricultural policy that takes into account several components (irrigation, use of inputs and organization of marketing facilities). It should finally lead to a sufficient agricultural production that ensure food security for the population and to an active agricultural sector well integrated in the economy of African countries.
    Date: 2018–01
  2. By: Fernando M. Aragón (Simon Fraser University); Francisco Oteiza (Institute for Fiscal Studies); Juan Pablo Rud (Department of Economics, Royal Holloway, University of London and Institute of Fiscal Studies)
    Abstract: This paper examines how farmers adapt, in the short-run, to extreme heat. Using a production function approach and micro-data from Peruvian households, we find that high temperatures induce farmers to increase the use of inputs, such as land and domestic labor. This reaction partially attenuates the negative effects of high temperatures on output. We interpret this change in inputs as an adaptive response in a context of subsistence farming, incomplete markets, and lack of other coping mechanisms. We use our estimates to simulate alternative climate change scenarios and show that accounting for adaptive responses is quantitatively important.
    Keywords: Climate Change, Agriculture, Adaptation
    JEL: O13 O12 Q12 Q15 Q51 Q54
    Date: 2018–01
  3. By: Hongliang Zhang; John M. Antle
    Abstract: We investigate climate change impacts on productivity and production risk on U. S. Pacific Northwest winter wheat farms. Using farm-level data from the Census of Agriculture, we use a partial-moment-based approach to estimate climate and irrigation influences on winter wheat yield and farm net return distributions. Mean precipitation, growing degree-days, and freezing degree-days are shown to have highly distinct seasonal effects on the first three moments of the farm-level yield and net return distributions. Irrigation substantially increases the certainty equivalent of irrigated farms by shifting the winter wheat yield distribution outwards, and by increasing mean net returns but also decreasing the skewness of the net return distribution and thus reducing downside risk. By the mid-21st century, climate-change projections from 20 global climate models downscaled to the study region reveal a range of possible positive and negative effects on the winter wheat yield and net return distributions.
    Keywords: Climate Change, Winter Wheat, Production Risk, Partial Moments
    JEL: C5 D8 Q1
    Date: 2018–02
  4. By: Bou Dib, Jonida; Krishna, Vijesh; Alamsyah, Zulkifli; Qaim, Matin
    Abstract: Many tropical regions are experiencing massive land-use change that is often characterized by an expansion of oil palm at the expense of forests and more traditional forms of agricultural cropping. While implications of such land-use change for the environment and for local farm households were examined in previous research, possible effects on the livelihoods of non-farm households are not yet well understood. This study analyzes the role of different types of agricultural and non-agricultural employment income for non-farm households in rural Jambi, one of the hotspot regions of Indonesia's recent oil palm boom. Data from a recent survey show that employment in rubber and oil palm are important livelihood components for non-farm households. Employment in oil palm is more lucrative than employment in rubber, so involvement in the oil palm sector as a laborer is positively associated with total household income. Regression models show that whether or not a household works in oil palm is largely determined by factors related to migration background, ethnicity, and the size of the village area grown with this crop. These results suggest that further expansion of the oil palm area will likely benefit non-farm households through gains in employment income. As non-farm households belong to the poorest segments of the rural population, these benefits should not be ignored when designing policies towards sustainable land use.
    Keywords: oil palm,rubber,non-farm households,labor markets,sharecropping,income
    Date: 2018
  5. By: Tiziano Distefano (Department of Environmental, Land and Infrastructure Engineering, Politecnico di Torino, Italy); Guido Chiarotti (Department of Environmental, Land and Infrastructure Engineering, Politecnico di Torino, Italy); Francesco Laio (Department of Environmental, Land and Infrastructure Engineering, Politecnico di Torino, Italy); Luca Ridolfi (Department of Environmental, Land and Infrastructure Engineering, Politecnico di Torino, Italy)
    Abstract: Global food prices are typically analysed in a times series framework to assess the causes of volatility and to highlight spikes, that are interpreted as a signal of food crises. We address the spatial dimension of the issue at hand by focusing on the spatial food price dispersion, at the country-scale, in the international food trade network (IFTN) for ten relevant commodities. We base our study on bilateral trade by focusing on both the "internal" variance, which indicates that an exporter sets di erent prices to different importers for the same commodity, and the "external" variance, that is a measure of market price competitiveness. We nd that spatial price dispersion is remarkable and persistent over time and that there exists a strict correlation between price spikes (in level) and peaks in spatial price variability. This entails that during price crises the market is more fragmented and a higher spatial price dispersion is found. Moreover, we implement a randomness test on the country-scale price distributions to test whether they can be replicated through a random process of extraction. It results that the actual distribution of prices of several commodities is well described by a random distribution. It follows that the process of data aggregation is not neutral because, in several cases, the information at the micro-level scale (firms' decision) is lost at the macro-scale due to the complexity of the international food trade network (IFTN). We suggest some possible economic explanations of this occurrence and we discuss the main methodological consequences.
    Keywords: food price, spatial dispersion, international trade, randomness
    JEL: L66 N50 Q11 Q17 R12 R32
    Date: 2018–01
  6. By: Hongliang Zhang; Jianhong E. Mu; Bruce A. McCarl
    Abstract: This paper investigates how dryland wheat farm operators adapt to climate through the use of land leasing in the U.S. Pacific Northwest region. Using a farm-level dataset from the U.S. Census of Agriculture, we build a statistical relationship between climate and leased acreage for dryland wheat farms. We find that a warmer and wetter climate reduces leased dryland wheat farmland, suggesting that land leasing is a potential strategy for adaptation to future climate. Using climate projections from 20 global climate models, we predict that, by 2050, leased acreage for dryland wheat farms on average will decline by 23% and 29% relative to 2012 levels under the medium and high greenhouse gas emission scenarios, respectively.
    Keywords: Land Leasing, Climate, Climate Change Adaptation, Wheat
    JEL: Q15 Q54 C21
    Date: 2018–02
  7. By: Jorge Alvarez
    Abstract: A key feature of developing economies is that wages in agriculture are significantly below those of other sectors. Using Brazilian household surveys and administrative panel data, I use information on workers who switch sectors to decompose the drivers of this gap. I find that most of the gap is explained by differences in worker composition. The evidence speaks against the existence of large short-term gains from reallocating workers out of agriculture and favors recently proposed Roy models of inter-sector sorting. A calibrated sorting model of structural transformation can account for the wage gap level observed and its decline as the economy transitioned out of agriculture.
    Keywords: Western Hemisphere;Brazil;Agriculture;Human capital;Wage Gaps, Structural Transformation, Sorting, Productivity Gaps, Labor Force and Employment, Size, and Structure, Agricultural Labor Markets, Occupational and Intergenerational Mobility, General, General
    Date: 2017–12–22
  8. By: Raluca Dragusanu; Nathan Nunn
    Abstract: We examine the effects of Fair Trade (FT) certification of coffee on producers and households in Costa Rica. Examining the production dynamics of the universe of Costa Rican coffee mills from 1999–2014, we find that FT certification is associated with a higher sales price, greater sales, and more revenues. As expected, these effects are greater when global coffee prices are lower and the FT guaranteed minimum price is binding. Looking at households, we find evidence that FT is associated with higher incomes for all families, but especially for those working in the coffee sector. However, we also find that, within this sector, the benefits are not evenly distributed. Skilled coffee growers benefit from FT, intermediaries are hurt, and unskilled workers are unaffected. Thus, although FT creates sizable benefits (on average), it also results in a redistribution from intermediaries to farmers. Lastly, we also find evidence of positive effects of FT certification on the education of high-school-aged children, which is most likely due to the presence of scholarship programs that are funded by FT premiums.
    JEL: F14 O13 O54
    Date: 2018–01
  9. By: Babu, Suresh Chandra; Dorosh, Paul A.
    Abstract: Armed conflict combined with prolonged drought has put about 20 million people at risk of starvation and death in Somalia, South Sudan, Yemen, and northern Nigeria. The international development and aid communities are caught between the enormity of the humanitarian crisis, which demands an estimated US$4.4 billion to address, and the lack of resources forthcoming from donors. Food crises, famine-like conditions, and famines recur with regularity in many developing countries (see Box 1 for definitions of terms). Although the current famines can be largely attributed to conflicts, chronic food insecurity also threatens several other African countries. For example, 6.7 million people were affected by Malawi’s largest food crisis in decades in 2016–2017, and the country remains vulnerable to weather extremes that could create food emergencies (World Bank 2017). In Kenya, food security has deteriorated since the end of 2016 and half of its 47 counties face food shortages (Chatterjee and Mengistu 2017). How do countries prepare to prevent shocks—natural and man-made—from generating food crises? What does it take to break the cycle of chronic food insecurity and build resilient food systems? How have some countries managed to prevent drought from leading to famine? In this brief, we document lessons for building resilient food systems to prevent future famines.
    Keywords: famine, food security, resilience, food insecurity,
    Date: 2017
  10. By: Halkos, George; Roditi, Kyriakoula; Matsiori, Steriani; Vafidis, Dimitrios
    Abstract: This study analyzes the small-scale fishery in Kalymnos Island (located in Eastern Mediterranean Sea) to evaluate fishing practices in this fishery. The métiers of this fishery are defined with a multivariate analysis approach for assessing the main fishery resources and fishing gear employed. The empirical findings show that longlines in this fishery practice 10 types of métiers. Some of these métiers, in terms of target species, gear and seasonality are also used in other small-scale Mediterranean fisheries. The main 6 type of métiers with fishing gear: set longlines, drifting longlines, handlines and squid jig-lines with target species P.pagrus, D.vulgaris, P.erythrinus, S.aurata, X.gladius, O.vulgaris, and L.vulgaris. The seasonal rotation of métiers is determined by the availability of different fish species rather than market price. Identified the métiers provides information for developing monitoring and management strategies for the small-scale fishery. The small-scale fishery constitutes an important social component of local coastal communities.
    Keywords: Landing; Small-scale fishery; Multivariate analysis; Métier; Longline.
    JEL: Q20 Q22 Q29
    Date: 2018–02–11
  11. By: James Mabli; Elizabeth Gearan; Rhoda Cohen; Katherine Niland; Nicholas Redel; Erin Panzarella; Barbara Carlson
    Abstract: In an effort to ensure that the health and social needs of older adults are adequately met and to rebalance long-term care provision away from institutionalization and toward home and community-based services, the Administration on Aging (AoA) within the Administration for Community Living of the U.S. Department of Health and Human Services (DHHS) administers the Title III-C Nutrition Services Program (NSP) as part of the Older Americans Act (OAA).
    Keywords: Title III-C, NSP, congregate meals, home-delivered meals, OAA, ACL
    JEL: I0 I1
  12. By: Cristina Cirillo (University of Florence and University of Trento); Giorgia Giovannetti (University of Florence, European University Institute and Luca D'Agliano Center)
    Abstract: This paper provides an impact evaluation of the Juntos programme on households' decision to invest in livestock and agricultural and non-agricultural assets used for income generating activities. Using Propensity Score Matching and Difference in Difference techniques, we show: i) that beneficiaries are significantly more likely to invest in productive assets and activities with respect to non-beneficiaries; ii) that Juntos is more likely to relax liquidity contraints rather than to be used as an insurance for risky investments; iii) that the program benefits the poor but not the poorest of the poor. Duration and transfers regularity do not produce significant differences between groups of beneficiaries. However, results show a sustained impact of the programme over time.
    Keywords: Conditional cash transfers; Impact evaluation; Households investments; Juntos
    JEL: I38 H20 O12 H43
    Date: 2018–01–29
  13. By: Randall Jackson (Regional Research Institute, West Virginia University); Amir B. Ferreira Neto (Regional Research Institute, West Virginia University); Elham Erfanian (Regional Research Institute, West Virginia University)
    Abstract: This paper estimates the economic and environmental impacts of introducing woody biomass processing (WBP) into a rural area in central Appalachia. WBP is among the most promising additions to energy generation portfolios for reducing import dependency while at the same time providing economic opportunity to stimulate regional economies, especially in rural regions where economic development options are often limited. We use an input-output framework to assess WBP under three different pathways, fast pyrolysis, ethanol and coal-biomass to liquids. We find that the proposed WBP will increase regional output by 0.5–1.3% of gross regional product; it will increase income by $17.32 to $51.31 million dollars each year, and regional employment by 218.1–1127.8 jobs, depending on the chosen pathway. Of these impacts, the direct portions are 63–77% of the total impact, depending on the chosen pathway. The economic analysis and the results from the accompanying environmental assessment show that only the ethanol pathway has both economic and environmental benefits. We conclude that because long-run economic development strategies in rural regions are limited and negative impacts do not alter dramatically the regional environmental profile, regional policymakers should include WBP among their development portfolio options.
    Keywords: woody biomass processing, input output analysis, life cycle assessment, central Appalachia, rural economic development
    JEL: R58 R15 Q51
    Date: 2016–09
  14. By: Martinho, Vítor João Pereira Domingues
    Abstract: The objective of this study is to analyse the financial realities for the farming sector in European Union countries and their relationships with agricultural investment and public structural subsidies, from a perspective of farming- and governmental relationships as part of the Triple Helix approach. Firstly, the statistical information available within the Farm Accountancy Data Network for the former twenty seven European Union countries, related with the main items of the accounting balance sheet was investigated. Secondly, various financial indicators were calculated to analyse the principal financial constraints in these farms and finally, these findings with the levels of investment and structural support were reported. As a main conclusion, more adjusted structural policies in the European Union will be needed, taking these microeconomic contexts into account.
    Keywords: Farming sector,Structural subsidies,Accountancy information,European Union,Triple Helix
    JEL: E22 M41 O52 Q12
    Date: 2018
  15. By: Luis F. Samper; Daniele Giovannucci; Luciana Marques Vieira
    Abstract: The paper describes: a) the coffee industry and its GVC structure; b) the role that intangible assets play in value creation from both the supply and demand perspective; and c) the current and potential role of intellectual property tools in creating and retaining value, as well as providing economic upgrade options.
    Date: 2017–11
  16. By: Skovsgaard, Christian Volmar; Sharp, Paul; Lampe, Markus; Jensen, Peter Sandholt
    Abstract: We explore the role of elites for development and in particular for the spread of cooperative creameries in Denmark in the 1880s, which was a major factor behind that country's rapid economic catch-up. We demonstrate empirically that the location of early proto-modern dairies, so-called hollænderier, introduced onto traditional landed estates as part of the Holstein System of agriculture by landowning elites from the Duchies of Schleswig and Holstein in the eighteenth century, can explain the location of cooperative creameries in 1890, more than a century later, after controlling for other relevant determinants. We interpret this as evidence that areas close to estates which adopted the Holstein System witnessed a gradual spread of modern ideas from the estates to the peasantry. Moreover, we identify a causal relationship by utilizing the nature of the spread of the Holstein System around Denmark, and the distance to the first estate to introduce it, Sofiendal. These results are supported by evidence from a wealth of contemporary sources and are robust to a variety of alternative specifications.
    Keywords: Denmark; cooperatives; landowning elites; knowledge spillovers; technology; Institutions
    JEL: Q13 O13 N53
    Date: 2018–02
  17. By: Oded Galor; Omer Ozak; Assaf Sarid
    Abstract: This research explores the geographical origins of the coevolution of cultural and linguistic traits in the course of human history, relating the geographical roots of long-term orientation to the structure of the future tense, the agricultural determinants of gender bias to the presence of sex-based grammatical gender, and the ecological origins of hierarchical orientation to the existence of politeness distinctions. The study advances the hypothesis and establishes empirically that: (i) variations in geographical characteristics that were conducive to higher natural return to agricultural investment contributed to the existing cross-language variations in the structure of the future tense, (ii) the agricultural determinants of gender gap in agricultural productivity fostered the existence of sex-based grammatical gender, and (iii) the ecological origins of hierarchical societies triggered the emergence of politeness distinctions.
    Date: 2018
  18. By: Antonio Ciccone
    Abstract: A new dataset by Bazzi and Blattman (2014) allows examining the effects of international commodity prices on the risk of civil war outbreak with more comprehensive data. I find that international commodity price downturns sparked civil wars in Sub-Saharan Africa. Another finding with the new dataset is that commodity price downturns also sparked civil wars beyond Sub-Saharan Africa since 1980. Effects are sizable relative to the baseline risk of civil war outbreak. My conclusions contrast with those of Bazzi and Blattman, who argue that the new dataset rejects that commodity price downturns cause civil wars. The reason is that I calculate commodity price shocks using time-invariant (fixed) export shares as commodity weights. Bazzi and Blattman also calculate commodity price shocks using export shares as commodity weights but but the exports shares they use are time-varying. Using time-invariant export shares as commodity weights ensures that time variation in price shocks solely re ects changes in international commodity prices. Price shocks based on time-varying export shares partly re ect (possibly endogenous) changes in the quantity and variety of countries' exports, which jeopardizes causal estimation.
    Keywords: civil wars, commodity price downturns
    JEL: E3 O1 Q1 Q10
    Date: 2018–01
  19. By: Drupp, Moritz A.; Hänsel, Martin C.
    Abstract: We study how the scarcity of non-market goods, such as environmental amenities, affects the economic appraisal of climate policy. To this end, we perform a comprehensive analysis of the change in relative prices of non-market goods in the widespread climate-economy model DICE. We show that DICE already contains relative prices implicitly and that the impact of the scarcity of non-market goods on climate policy evaluation is therefore more pervasive than previously suggested. We calibrate DICE based on empirical evidence and propose a plausible range for relative price changes. The uncertainty is substantial, with relative price changes ranging from 1.3 to 9.6 percent in 2020. For our central calibration, the relative price change amounts to 4.4 percent in 2020. Neglecting relative prices leads to an underestimation of the social cost of carbon in 2020 of more than 40 percent. Accounting for these changes is equivalent to a decrease in pure time preference by more than a half percentage point. Our findings support initiatives to consider relative prices in governmental project appraisal and offer guidance for the evaluation of climate policy.
    Keywords: climate policy,discounting,non-market goods,social cost of carbon,substitutability
    JEL: Q01 Q54 H43 D61 D90
    Date: 2018
  20. By: Upali Wickramasinghe (Senior International Consultant, FAO-Regional Office for Asia and the Pacific)
  21. By: Martinho, Vítor João Pereira Domingues
    Abstract: The context of European Union farms is markedly diverse. This is verified when, for example, several dimensions of the agricultural sector are analyzed, considering variables related with economic, social, or environmental dynamics. Indeed, frequently the farms in EU countries present relevant differences inside economic, social, or environmental dimensions. To better understand the interrelationships inside the economic, social, and environmental framework of European Union farms, this work analyzes the networks among these fields by considering rankings in decreasing order (with the statistical information of the representative farms of each European country) for variables like farming output, current subsidies, total inputs, gross investments, subsidies on investments, fertilizer and crop protection consumption, farming labor, and wages paid. Data was gathered from the Farm Accountancy Data Network, across the European Union member-states and over the period 2012-2014. This statistical information was analyzed through network analysis, exploring edgelists among the several variables considered and the network bridges between European countries. The results show that, in fact, there are significant differences in the scores found for European countries inside economic, social, and environmental dimensions, which was highlighted by the network analysis. However, the European Union farms are, in general, networked in the rankings for the variables considered.
    Keywords: European farm context,Edgelists and network bridges,Farm Accountancy Data Network,Benchmarking
    JEL: C45 D01
    Date: 2018
  22. By: Mireille Chiroleu-Assouline (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech); Jean-Christophe Poudou (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Sébastien Roussel (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Abstract: To address the issue of potential information asymmetries inherent in the estimation of deforestation baselines required by the current Reducing Emissions from Deforestation and Forest Degradation+ (REDD+) scheme, we offer a theoretical analysis of an extended scheme relying on the theory of incentives. We compare two types of contracts: a deforestation-based contract and a policy-based contract. Each of them implies a dramatically different information rent/efficiency trade-off due to domestic implementation and transaction costs. If the contract is deforestation-based (resp. policy-based), information rents are awarded to countries with the ex ante lowest (resp. highest) intended deforestation. We show that a general contract can be offered to recipient countries in which the type of instrument proposed is endogenous, independent of the historical trend, unlike the current REDD+ mechanism. Dividing countries into two groups corresponding to the deforestation-based instrument and the policy-based instrument helps the donor country to obtain efficient deforestation and avoided deforestation levels.
    Keywords: Reducing Emissions from Deforestation and forest Degradation,Incentives,Performance,Conditionality,Contract,Deforestation,Hidden information
    Date: 2018

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