nep-agr New Economics Papers
on Agricultural Economics
Issue of 2019‒09‒30
nineteen papers chosen by

  1. Transforming developing country agriculture: Removing adoption constraints and promoting inclusive value chain development By Alain de Janvry; Elisabeth Sadoulet
  2. Computerization and Development: Formalizing Property Rights and its Impact on Land and Labor Allocation By beg, Sabrin
  3. Is landholding a potential barrier to adopting profitable livelihoods in the Mekong Delta region in Vietnam ? By Van Hoang, Cuong; Quang Tran, Tuyen; Hai Thi Nguyen, Yen; Duc Nguyen, Kien
  4. Do Property Rights Alleviate the Problem of the Commons? Evidence from California Groundwater Rights By Andrew B. Ayres; Kyle C. Meng; Andrew J. Plantinga
  5. Removing Fossil Fuel Subsidies to Help the Poor By Haqiqi, Iman; Yasharel, Sepideh
  6. Are Small Farms Really more Productive than Large Farms? By Fernando Aragon Sanchez; Diego Restuccia; Juan Pablo Rud
  7. IFAD RESEARCH SERIES 39 - Smallholder farming, growth linkages, structural transformation and poverty reduction By Suttie, David
  8. Evaluating multilateral price indices in a dynamic item universe By Li-Chun Zhang; Ingvild Johansen; Ragnhild Nygaard
  9. The Interplay between Oil and Food Commodity Prices: Has It Changed over Time? By Gert Peersman; Sebastian K. Rüth; Wouter Van der Veken
  10. Global alcohol markets: evolving consumption patterns, regulations and industrial organizations By Kym Anderson; Giulia Meloni; Jo Swinnen
  11. Do Farmers Care About Rented Land? By Leonhardt, Heidi; Salhofer, Klaus; Penker, Marianne
  12. A comparative analysis of land readjustment at international context By Ya Zhao; Lennon Choy
  13. Optimal climate policy with directed technical change, extensive margins and a decreasing elasticity of substitution between clean and dirty energy By Anthony Wiskich
  14. Energy Efficiency and Directed Technical Change: Implications for Climate Change Mitigation By Gregory Casey
  15. Extreme Temperatures and Time Use in China By Teevrat Garg; Matthew Gibson; Fanglin Sun
  16. Trade and terroir. The political economy of the world's first geographical indications By Giulia Meloni; Jo Swinnen
  17. A Bad Year? Climate Variability and the Wine Industry in Chile By Eduardo A. Haddad; Patricio Aroca, Pilar Jano, Ademir Rocha, Bruno Pimenta
  18. The Impact of Food Prices on Conflict Revisited By Jasmien De Winne; Gert Peersman
  19. Information on biodiversity and environmental behaviors: A European study of individual and institutional drivers to adopt sustainable gardening practices By Thomas Coisnon; Damien Rousselière; Samira Rousselière

  1. By: Alain de Janvry (ARE - Department of Agricultural and Resource Economics [Berkeley] - University of California [Berkeley] - University of California, FERDI - Fondation pour les Etudes et Recherches sur le Développement International, University of California [Berkeley] - University of California); Elisabeth Sadoulet (ARE - Department of Agricultural and Resource Economics [Berkeley] - University of California [Berkeley] - University of California, FERDI - Fondation pour les Etudes et Recherches sur le Développement International, University of California [Berkeley] - University of California)
    Abstract: For most poor countries of today, investing in agriculture and the associated sectoral linkages is the most promising strategy for sustained growth and poverty reduction. Yet, in these countries, investment in agriculture has generally been lagging relative to international norms and recommendations. We start from the premise that this has been due to lack of success in modernizing the operations of smallholder farmers (SHF) that typically constitute the core of the farm population. These farmers are linked to consumers through value chains that range from the most elementary (local spot markets) to the most advanced (contract farming and out-grower schemes). Current wisdom with cases of successful modernization of smallholder farming is that it requires asset building, productivity growth in staple foods (Green Revolution), agricultural transformation (diversification of farming systems toward high value crops), and rural transformation (value addition through rural non-farm activities linked to agriculture). … /… Key words: Constraints removal approach: constraints to modernization originating in credit, insurance, information, and access to deep markets. Inclusive value chain development approach: incentives to modernize originating in access to assets, contracts, producer organizations discipline, and value chain coordination.
    Date: 2019–09–13
  2. By: beg, Sabrin
    Abstract: I test the land and labor market effects of a property rights reform that computerized rural land records, and provided access to digitized records and automated transactions to agricultural landowners and cultivators in Pakistan. Using the staggered roll-out of the program, I find that while the reforms do not shift land ownership, landowning households are more likely to rent out land and lower their agricultural participation. At the same time, cultivating households have access to more land, as rented in land and overall farm size per cultivating household increases. Improved tenure security also shifts the type of rental contracts, and the input choices of cultivators. Aggregate district level data suggests an improvement in overall crop yield. These results have implications for both the allocation of land across farmers and the selection of labor into farming.
    Keywords: Property Rights, Rural Mobility, Agricultural Land Markets, ICT in Development, Institutions
    JEL: O1 O10 O12 O13
    Date: 2019–09–19
  3. By: Van Hoang, Cuong; Quang Tran, Tuyen; Hai Thi Nguyen, Yen; Duc Nguyen, Kien
    Abstract: Using secondary data on rural households in the Mekong Delta region of Vietnam, our study is the first to identify (i) what livelihoods are adopted by rural households, (ii) which ones are profitable and which are not, and (iii) whether access to various types of land is an important factor affecting households’ choice of remunerative livelihoods. Considering various income sources, we apply cluster analysis techniques to offer the first classification of five types of livelihood adopted by local households. We then compare livelihood outcomes across livelihood groups using Bonferroni pairwise tests and quantile functions (Pen’s parades). It was found that households engaged in farm work, formal wage-earning work and non-wage work livelihoods obtained higher levels of income than did those with livelihoods depending on informal wage-earning work or non-labor income sources. Using a multinomial logit model, we also examine factors affecting choices of income-earning activities, and find that several types of land are positively associated with the choice of high-return livelihoods, implying that lack of access to land is a potential obstacle to adopting profitable livelihoods. Fortunately, education is found to play a major role in the pursuit of remunerative livelihoods, which suggests that better education would help households move from low- to high-return activities.
    Keywords: Cluster analysis; household incomes; land; livelihoods; sustrainable livelihood; Mekong Delta
    JEL: O2 Q1 Q12
    Date: 2019–01–03
  4. By: Andrew B. Ayres; Kyle C. Meng; Andrew J. Plantinga
    Abstract: Property rights are widely prescribed for addressing the tragedy of the commons, yet causal evidence of their effectiveness remains elusive. This paper combines theory and empirics to produce a causal estimate of the net benefit of using property rights to manage groundwater. We develop a model of dynamic groundwater extraction to demonstrate how a spatial regression discontinuity design exploiting an incomplete property rights setting can recover a lower bound on the value of property rights. We apply this estimator to a major aquifer in water-stressed southern California, finding groundwater property rights led to substantial net benefits, as capitalized in land values. Heterogeneity analyses suggest that gains arise in part from the tradeability of property rights, enabling more efficient water use across sectors.
    JEL: D23 P14 P48 Q15 Q25
    Date: 2019–09
  5. By: Haqiqi, Iman; Yasharel, Sepideh
    Abstract: Phasing out energy subsidies may increase the price of energy and adversely affect the poor. However, the households may benefit from the redistribution of the revenue from this policy in the economy. Here, we investigate the impacts of phasing out energy subsidies and direct transfer of the policy revenue to households. Employing a Computable General Equilibrium model, we measure the impacts on labor-leisure choice and on labor supply. Considering the Foster-Greer-Thorbecke index and the Food Ratio Method, we construct several poverty indices: the Gini index, the ratio of none-food expenditures to food expenditure, the ratio of income of the richest decile to the poorest decile, and the ratio of income of the two richest deciles to the two poorest deciles. We analyze the effects of an increase in energy prices and direct transfer of revenues to the households in the Iranian economy. The findings suggest a considerable improvement in income distribution and a significant improvement in food to non-food ratio. The results also show an improvement in rural-urban income distribution.
    Keywords: food security; income distribution; poverty; computable general equilibrium
    JEL: C68 D31 D58 D63 Q25 Q43
    Date: 2018
  6. By: Fernando Aragon Sanchez (Simon Fraser University); Diego Restuccia (University of Toronto); Juan Pablo Rud (Royal Holloway, University of London)
    Abstract: We revisit the long-standing empirical evidence of an inverse relationship between farm size and productivity using rich micro data from Uganda. We show that farm size is nega- tively related with yields (output per hectare), as commonly found in the literature, but positively related with farm productivity (a farm-specific component of total factor pro- ductivity). These conflicting results do not arise because of omitted variables such as land quality, measurement error in output or inputs, or specification issues. Instead, we reconcile the findings emphasizing decreasing returns to scale in farm production and farm-specific distortions. We exploit regional variation in land tenure regimes in Uganda in evaluating the role of farm-specific distortions. Our findings point to the limited value of yields (or land productivity) in establishing the size-productivity relationship. More generally, we highlight farm size as an ineffective instrument for policy implementation since size is deeply con- founded by distortions in developing countries.
    Date: 2019
  7. By: Suttie, David
    Abstract: In the context of urbanization and expanding markets for agricultural products, the prospects for smallholder farming systems to contribute to development across sub-Saharan Africa is particularly relevant today. Despite scepticism among some, arguments in the literature point to potential productivity, inclusion and multiplier non-farm growth benefits arising from the development of small-farming systems. This research investigates such viewpoints by categorizing countries according to whether national agriculture is small-farm dominated or large-farm dominated and looking at variables dependent on relevant socio-economic phenomena. Findings indicate small-farming countries have performed better in improving levels of productivity, reducing poverty and advancing structural transformation in the period in question. Findings are robust to the effects of differing levels of rural investment. However, sample sizes and the nature of data collection in a context of scarcity limits the capacity to generalize findings. Although the research finds small-farming countries outperform large-farming countries in progress across these variables, bivariate analysis does not establish that linkages from agricultural development to first, poverty reduction and, second, structural transformation are stronger in small-farming contexts. Overall, findings show that possessing an agricultural sector dominated by smallholdings is no impediment to making progress across key indicators of social and economic development. Consequently, reflection on the merits of public expenditure to support smallholder models and opportunities to leverage private finance in smallholder farming are emphasized. Further, the scope for integration of small- and large-farming models in mutually beneficial arrangements can be a useful complement to mechanisms that support exclusively smallholder farming models.
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Food Security and Poverty
    Date: 2019
  8. By: Li-Chun Zhang; Ingvild Johansen; Ragnhild Nygaard (Statistics Norway)
    Abstract: Statistics Norway has a long history of using scanner data in the Consumer Price Index (CPI). The early research – in Norway as well as internationally – was focused on supermarket data which consists largely of stable items. The attention has since gradually shifted towards the parts of consumption market that are characterized by high item churn, where the methodology initially introduced for supermarket data is no longer adequate. Several National Statistical Institutes (NSIs) including Statistics Norway have been researching on a more generic scanner data methodology. The overall goal is to implement an approach that incorporates expenditure shares at the most detailed level without suffering from chain drift, and that works well across different commodity groups including those with high item churn. A variety of methods and index formulas are currently being tested and implemented for CPIs in different parts of the world. We propose a systematic approach to the investigation process, which has recently been developed at Statistics Norway. This consists mainly of two parts: a Total Effect Framework (TEF), and a set of generic diagnostics. The TEF is defined by the necessary choices required and the elements that affect these choices and we review, synthesize and develop a set of generic diagnostics. Most indices employed in such diagnostics are not genuine candidates for real production, but they are designed and introduced to generate useful empirical evidences, on which a plausible final choice of index method can be based. We shall illustrate the generic diagnostics using scanner datasets mainly from the markets of sport equipment which have high item churn. To this end we summarize our own experiences and put forward some preliminary conclusions of a generic scanner data price index methodology.
    Keywords: scanner data; item churn; homogenous product; generic diagnostics; multilateral methods
    JEL: C43 C81 E31
    Date: 2019–09
  9. By: Gert Peersman; Sebastian K. Rüth; Wouter Van der Veken
    Abstract: Using time-varying BVARs, we find that oil price increases caused by oil supply shocks did not affect food commodity prices before the start of the millennium, but had positive spillover effects in more recent periods. Likewise, shortfalls in global food commodity supply—resulting from bad harvests—have positive effects on crude oil prices since the early 2000s, in contrast to the preceding era. Remarkably, we also document greater spillover effects of both supply shocks on metals and minerals commodity prices in recent periods, as well as a stronger impact on the own price compared to earlier decades. This (simultaneous) time variation of commodity price dynamics cannot be explained by the biofuels revolution and is more likely the consequence of heightened informational frictions and information discovery in more globalized and financialized commodity markets.
    Keywords: commodity markets, food prices, oil prices, spillovers
    JEL: E31 F30 G15 Q11 Q41
    Date: 2019
  10. By: Kym Anderson; Giulia Meloni; Jo Swinnen
    Abstract: For millennia alcoholic drinks have played an important role in food security and health (both positive and negative), but consumption patterns of beer, wine and spirits have altered substantially over the past two centuries. So too have their production technologies and industrial organization. Globalization and economic growth have contributed to considerable convergence in national alcohol consumption patterns. The industrial revolution contributed to excess consumption by stimulating demand and lowering the cost of alcohol. It also led to concentration in some alcohol industries, expecially brewing. In recent years the emergence of craft producers has countered firm concentration and the homogenization of alcoholic beverages. Meanwhile, governments have intervened extensively in alcohol markets to reduce excessive consumption, raise taxes, protect domestic industries and/or ensure competition. These regulations have contributed to, and been affected by, evolving patterns of consumption and changing structures of alcohol industries.
    Keywords: Globalization of preferences, Convergence of national beverage consumption mix, Alcohol and health, Restrictions on alcohol consumption and production, Beverage firm concentration
    Date: 2018–02
  11. By: Leonhardt, Heidi; Salhofer, Klaus; Penker, Marianne
    Abstract: Does ownership status of agricultural land determine farmers’ soil use behaviour? Why (not)? We investigate this old question using multiple methods and data. We apply econometric analysis to plot-level data to determine whether planting decisions differ between rented and owned plots. In addition, we analyse interviews with Austrian farmers with the aim of explaining (a lack of) differences. We find a very small influence of tenancy on crop choice in the quantitative part of the study, and qualify these findings in the qualitative part. If at all, interviewed farmers treat rented and owned land differently primarily with respect to fertilization or liming, particularly if the rental is insecure or short-term. We find that renting is often perceived as long-term and secure in Austria, resulting in equal soil conservation behaviour on rented and owned plots. Personal relationships between renter and landowner as well as farmers’ attitudes additionally support soil conservation.
    Keywords: Land Economics/Use
    Date: 2018–06–01
  12. By: Ya Zhao; Lennon Choy
    Abstract: Land readjustment, as an alternative to traditional land expropriation, has been implemented by both developed and developing countries in urban land development during past century. It promotes an inclusive urban development process and is observed to solve the overwhelming holdout dilemma and free rider problem in most cases especially where public budget is constrained or where legal or ideological support for property right protection is strong. However, LR is still a brand-new technique to other countries and regions whilst the fruitful achievements in some countries. Furthermore, LR is not a panacea for all cultures and communities. Its effectiveness is impaired in some cases due to inappropriate adjustment over changing political, economic and social environment. In this context, a comprehensive and comparative analysis within the frame of international literature is necessary to facilitate the study and transfer of LR. By examining international experiences and operation details in 14 countries, we summarize the applications and strengths of LR and compare mechanisms, policies, legal frameworks systematically across these countries. The challenges and weaknesses of this instrument as well as countermeasures are also explored to yield more insights into prospective improvements for more efficient applications. This article makes one of the first attempts to establish a comprehensive analysis of land readjustment at the international context.
    Keywords: Land assembly; Land Readjustment; Property right; Urban Development
    JEL: R3
    Date: 2019–01–01
  13. By: Anthony Wiskich
    Abstract: This paper extends the climate model with endogenous technology of Acemoglu, Aghion, Bursztyn, and Hemous (2012). A non-energy sector is introduced which decreases the costs of abatement by more than an order of magnitude through the extensive margin of labour, as labour can move freely between sectors. An extensive margin of research, where researchers can switch between non-energy and energy research, leads to a period of intense research in the clean sector above the long-run share and increases the power of policy to avert environmental disaster. A decreasing elasticity of substitution between clean and dirty inputs as the share of clean energy rises is also considered, reflecting the increasing difficulty of integrating intermittent clean energy supply in electricity. A decreasing elasticity increases the initial optimal tax on dirty energy and therefore lowers the subsidies required to direct technical change towards clean energy.
    Keywords: Climate change, directed technical change, optimal policy, energy
    JEL: O33 O44 Q30 Q54 Q56 Q58
    Date: 2019–09
  14. By: Gregory Casey (Williams College)
    Abstract: I build a quantitative model of economic growth that can be used to evaluate the impact of environmental policy interventions on final-use energy consumption, an important driver of carbon emissions. In the model, energy demand is driven by endogenous and directed technical change (DTC). Energy supply is subject to increasing extraction costs. Unlike existing DTC models, I consider the case where multiple technological characteristics are embodied in each capital good, a formulation conducive to studying final-use energy. The model is consistent with aggregate evidence on energy use, efficiency, and prices in the United States. I examine the impact of new energy taxes and compare the results to the standard Cobb-Douglas approach used in the environmental macroeconomics literature, which is not consistent with data. When examining a realistic and identical path of energy taxes in both models, the DTC model predicts 22% greater cumulative energy use over the next century. I also use the model to study the macroeconomic consequences of R & D subsidies for new energy efficient technologies. I find large rebound effects that undo short-term reductions in energy use.
    Keywords: Energy, Climate Change, Directed Technical Change, Growth
    JEL: H23 O33 O44 Q43 Q55
    Date: 2019–09
  15. By: Teevrat Garg (School of Global Policy and Strategy, University of California, San Diego); Matthew Gibson (Williams College); Fanglin Sun (Department of Economics, University of California, San Diego)
    Abstract: How do people in developing countries respond to extreme temperatures? Using individual-level panel data over two decades and relying on plausibly exogenous variation in weather, we estimate how extreme temperatures affect time use in China. Extreme temperatures reduce time spent working, and this effect is largest for female farmers. Hot days reduce time spent by women on outdoor chores, but we find no such effects for men. Finally, hot days dramatically reduce time spent on childcare, reflecting large effects on home production. Taken together, our results suggest time use is an important margin of response to extreme temperatures.
    Keywords: Time use, extreme weather, gender
    Date: 2019–05
  16. By: Giulia Meloni; Jo Swinnen
    Abstract: The world’s first geographical indications (GIs) were in the wine sector and focused on the delineation of the location of production, the ‘terroir’: the Burgundy wines in the fifteenth century, the Port wines and Chianti wines in the eighteenth century, and the Champagne wines in the early twentieth century. We analyze the causes for the introduction of these GIs (‘terroirs’) and for changes in their delineation (expansion) later on. Our analysis shows that trade played a very important role in the creation of the ‘terroirs’ but not always through the same mechanisms. For the Port and Chianti GIs it was exports to Britain that were crucial; for Burgundy it was domestic trade to Paris; and for the Champagne GI it was not exports but pressure from wine imports and new wine regions that played a crucial role. For the expansions of the GIs later in history, other factors seem to have been equally important. Expansions of the GIs in the years and centuries after their introduction followed major changes in political power; the spread of a new philosophy in liberal and free markets across Europe; and infrastructure investments which opened up markets and made exports cheaper from “new” producers.
    Date: 2018–01
  17. By: Eduardo A. Haddad; Patricio Aroca, Pilar Jano, Ademir Rocha, Bruno Pimenta
    Abstract: Short-term climate conditions may affect crop yields and vintage quality and, as a consequence, wine prices and vineyards’ earnings. In this paper, we use a CGE model for Chile, which incorporates detailed information about the value chain of the wine sector in the country. Using information for the 2015-2016 harvest, we calibrate climate shocks associated with a bad year for the wine industry in Chile, when premature rains occurred in important wine regions, reducing the area harvested and leading to wines with less concentrated flavors, particularly for reds. We model the climate shocks as a technical change in the grape-producing sector (quantity effect). Moreover, we model quality effects as a shift in the foreign demand curve for Chilean wine. Given the specific economic environment in the model and the proposed simulation, it is possible to note the reduction of Chilean real GDP by about 0.067%. By decomposing this result, we verify that the quality effect has a slightly greater weight compared to the quantity effect.
    Keywords: Climate, viticulture, wine, computable general equilibrium, Chile
    JEL: C68 Q13 Q54
    Date: 2019–09–20
  18. By: Jasmien De Winne; Gert Peersman (-)
    Abstract: Studies that examine the impact of food prices on conflict usually assume that (all) changes in international food prices are exogenous shocks for individual countries or local areas. By isolating strictly exogenous shifts in global food commodity prices, we show that this assumption could seriously distort estimations of the impact on conflict in African regions. Specifically, we show that increases in food prices that are caused by harvest shocks outside Africa raise conflict significantly, whereas a “naive” regression of conflict on international food prices uncovers an inverse relationship. We also find that higher food prices lead to more conflict in regions with more agricultural production. Again, we document that failing to account for exogenous price changes exhibits a considerable bias in the impact. In addition, we show that the conventional approach to evaluate such effects; that is, estimations that include time fixed effects, ignores an important positive baseline effect that is common for all regions.
    Keywords: conflict, food prices, instrumental variables
    JEL: C23 D74 F44 Q11 Q34
    Date: 2019–09
  19. By: Thomas Coisnon (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST); Damien Rousselière (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST); Samira Rousselière (ONIRIS - Ecole Nationale Vétérinaire Agroalimentaire et de l'Alimentation Nantes Atlantique)
    Abstract: The specific case of home gardening practices is particularly relevant when discussing lifestyle habits and ecological transition, due to the wide range of positive and negative environmental externalities private gardens may generate. However, existing studies usually focus on restricted areas, mostly at a city scale. We provide an original empirical contribution to the literature on individual and institutional drivers regarding ecological transition by exploring the variations of individual behavior between European countries with an appropriate econometric approach. Using a European database (Eurobarometer 83.4), we highlight several interesting results regarding Europeans' adoption of sustainable gardening practices, more particularly on the role of socio-demographic drivers, urban or rural residential location and access to trustworthy biodiversity-related information. In conclusion, we provide recommendations for the design of dedicated public policies, specific to a national or local level of decision.
    Keywords: private garden,meta-regression,Sustainable practices,eurobarometer,generalized heckman model
    Date: 2019

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