nep-agr New Economics Papers
on Agricultural Economics
Issue of 2021‒05‒03
fourteen papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Prediction of Food Production Using Machine Learning Algorithms of Multilayer Perceptron and ANFIS By Saeed Nosratabadi; Sina Ardabili; Zoltan Lakner; Csaba Mako; Amir Mosavi
  2. Climate Adaptation Policies and Infant Health: Evidence from a Water Policy in Brazil By Da Mata, Daniel; Emanuel, Lucas; Pereira, Vitor; Sampaio, Breno
  3. 2020 Annual Report of the Southwest Minnesota Farm Business Management Association By Van Nurden, Pauline A.; Paulson, Garen J.; Knorr, Tonya L.; Purdy, Rachel A.; Sandager, Nick; Nordquist, Dale W.
  4. Is Mobile Money Changing Rural Africa? Evidence from a Field Experiment By Catia Batista; Pedro C. Vicente
  5. The role of Common Agricultural Policy (CAP) in enhancing and stabilising farm income: an analysis of income transfer efficiency and the Income Stabilisation Tool By Biagini Luigi; Simone Severini
  6. Climate Change Adaptation in the British Columbia Wine Industry Can carbon sequestration technology lower the B.C. Wine Industry's greenhouse gas emissions? By Lee Cartier; Svan Lembke
  7. Combining incentives for pollination with collective action to provide a bundle of ecosystem services in farmland By Jerome Faure; Lauriane Mouysset; Sabrina Gaba
  8. Forgone Investment: Civil Conflict and Agricultural Credit in Colombia By Nicolás de Roux; Luis Roberto Martínez
  9. Rural Transformation, Inequality, and the Origins of Microfinance By Suesse, Marvin; Wolf, Nikolaus
  10. On the joint volatility dynamics in dairy markets By Anthony N. Rezitis; Gregor Kastner
  11. Re-investigating the oil-food price co-movement using wavelet analysis By Loretta Mastroeni; Greta Quaresima; Pierluigi Vellucci
  12. Energy, Groundwater, and Crop Choice By Fiona Burlig; Louis Preonas; Matt Woerman
  13. Preventing the Deterioration and Overexploitation of Groundwater A Call for Urgent Action in the Agricultural Sector By Stéphanie Leyronas; Olivier Petit
  14. Closing Time : The Local Equilibrium Effects of Prohibition By Howard, Greg; Ornaghi, Arianna

  1. By: Saeed Nosratabadi; Sina Ardabili; Zoltan Lakner; Csaba Mako; Amir Mosavi
    Abstract: Advancing models for accurate estimation of food production is essential for policymaking and managing national plans of action for food security. This research proposes two machine learning models for the prediction of food production. The adaptive network-based fuzzy inference system (ANFIS) and multilayer perceptron (MLP) methods are used to advance the prediction models. In the present study, two variables of livestock production and agricultural production were considered as the source of food production. Three variables were used to evaluate livestock production, namely livestock yield, live animals, and animal slaughtered, and two variables were used to assess agricultural production, namely agricultural production yields and losses. Iran was selected as the case study of the current study. Therefore, time-series data related to livestock and agricultural productions in Iran from 1961 to 2017 have been collected from the FAOSTAT database. First, 70% of this data was used to train ANFIS and MLP, and the remaining 30% of the data was used to test the models. The results disclosed that the ANFIS model with Generalized bell-shaped (Gbell) built-in membership functions has the lowest error level in predicting food production. The findings of this study provide a suitable tool for policymakers who can use this model and predict the future of food production to provide a proper plan for the future of food security and food supply for the next generations.
    Date: 2021–04
  2. By: Da Mata, Daniel (São Paulo School of Economics-FGV); Emanuel, Lucas (Universidade Federal de Pernambuco); Pereira, Vitor (National School of Public Administration); Sampaio, Breno (Universidade Federal de Pernambuco)
    Abstract: This paper studies how in utero exposure to a large-scale climate adaptation program affects birth outcomes. The program built around one million cisterns in Brazil's poorest and driest region to promote small-scale decentralized rainfall harvesting. Access to cisterns during early pregnancy increased birth weight, particularly for more educated women. Data suggest that more educated women complied more with the program's water disinfection training, highlighting that even simple, low-cost technologies require final users' compliance ("the last mile") to be effective. In the context of growing water scarcity, adaptation policies can foster neonatal health and thus have positive long-run implications.
    Keywords: climate, adaptation, birth outcomes, cisterns, water
    JEL: Q54 Q58 Q25 I15
    Date: 2021–04
  3. By: Van Nurden, Pauline A.; Paulson, Garen J.; Knorr, Tonya L.; Purdy, Rachel A.; Sandager, Nick; Nordquist, Dale W.
    Abstract: The average net farm income for the 108 farms included in the 2020 annual report of the Southwest Minnesota Farm Business Management Association was $322,402, up more than 100% from the preceding year. Much of this increased profitability resulted from improved crop prices in the third and fourth quarters of 2020 as well as improved profitability for livestock producers. Government payments related to the impacts of the COVID pandemic were also a big factor. Profits for association members were at their highest levels since 2012. Crop producers saw higher earnings based on above average yields, higher harvest season prices, and increased government payments. Livestock markets were severely impacted by the pandemic especially in the second quarter of the year. Earnings for all types of livestock operations were up primarily because of COVID related government payments. Without those payments, many livestock producers would have suffered severe losses.
    Keywords: Agricultural and Food Policy, Demand and Price Analysis, Farm Management, Livestock Production/Industries
    Date: 2020–03
  4. By: Catia Batista (Nova School of Business and Economics, CReAM, IZA and NOVAFRICA); Pedro C. Vicente (Nova School of Business and Economics, BREAD, and NOVAFRICA)
    Abstract: Rural areas in sub-Saharan Africa are typically underserved by financial services. We measure the economic impact of introducing mobile money for the first time in rural villages of Mozambique using a randomized control trial. This intervention led to consumption smoothing through increased transfers as a response to both geo-referenced village-level floods and household-level idiosyncratic shocks. Importantly, we find that the availability of mobile money increased migration out of rural areas, where we observe lower agricultural activity and investment. Our work illustrates how financial inclusion can accelerate African urbanization and structural change while improving welfare in rural areas.
    Keywords: mobile money, migration, remittances, technology adoption, insurance, consumption smoothing, investment, savings, Mozambique, Africa.
    JEL: O12 O15 O16 O33 G20 R23
    Date: 2021–04
  5. By: Biagini Luigi (Tutor); Simone Severini (Tutor)
    Abstract: Since its inception, the E.U.'s Common Agricultural Policy (CAP) aimed at ensuring an adequate and stable farm income. While recognizing that the CAP pursues a larger set of objectives, this thesis focuses on the impact of the CAP on the level and the stability of farm income in Italian farms. It uses microdata from a high standardized dataset, the Farm Accountancy Data Network (FADN), that is available in all E.U. countries. This allows if perceived as useful, to replicate the analyses to other countries. The thesis first assesses the Income Transfer Efficiency (i.e., how much of the support translate to farm income) of several CAP measures. Secondly, it analyses the role of a specific and relatively new CAP measure (i.e., the Income Stabilisation Tool - IST) that is specifically aimed at stabilising farm income. The assessment of the potential use of Machine Learning procedures to develop an adequate ratemaking in IST. These are used to predict indemnity levels because this is an essential point for a similar insurance scheme. The assessment of ratemaking is challenging: indemnity distribution is zero-inflated, not-continuous, right-skewed, and several factors can potentially explain it. We address these problems by using Tweedie distributions and three Machine Learning procedures. The objective is to assess whether this improves the ratemaking by using the prospective application of the Income Stabilization Tool in Italy as a case study. We look at the econometric performance of the models and the impact of using their predictions in practice. Some of these procedures efficiently predict indemnities, using a limited number of regressors, and ensuring the scheme's financial stability.
    Date: 2021–04
  6. By: Lee Cartier; Svan Lembke
    Abstract: The purpose of this study is to measure the benefits and costs of using biochar, a carbon sequestration technology, to reduce the B.C Wine Industry's carbon emissions. An economic model was developed to calculate the value-added for each of the three sectors that comprise the BC Wine industry. Results indicate that each sector of the wine value chain is potentially profitable, with 9,000 tonnes of CO2 sequestered each year. The study is unique in that it demonstrates that using biochar, produced from wine industry waste, to sequester atmospheric CO2 can be both profitable and environmentally sustainable.
    Date: 2021–04
  7. By: Jerome Faure; Lauriane Mouysset; Sabrina Gaba
    Abstract: A polycentric approach to ecosystem service (ES) governance that combines individual incentives for interdependent ES providers with collective action is a promising lever to overcome the decline in ES and generate win-win solutions in agricultural landscapes. In this study, we explored the effectiveness of such an approach by focusing on incentives for managed pollination targeting either beekeepers or farmers who were either in communication with each other or not. We used a stylized bioeconomic model to simulate (i) the mutual interdependency through pollination in intensive agricultural landscapes and (ii) the economic and ecological impacts of introducing two beekeeping subsidies and one pesticide tax. The findings showed that incentives generated a spillover effect, affecting not only targeted stakeholders but non-targeted stakeholders as well as the landscape, and that this effect was amplified by communication. However, none of the simulated types of polycentric ES governance proved sustainable overall: subsidies showed excellent economic but low environmental performance, while the tax led to economic losses but was beneficial for the landscape. Based on these results, we identified three conditions for sustainable ES governance based on communication between stakeholders and incentives: (i) strong mutual interdependency (i.e. few alternatives exist for stakeholders), (ii) the benefits of communication outweigh the costs, and (iii) the incentivized ES drivers are not detrimental to other ES. Further research is needed to systematize which combination of individual payments and collaboration are sustainable in which conditions.
    Date: 2021–04
  8. By: Nicolás de Roux; Luis Roberto Martínez
    Abstract: Do agricultural producers forgo otherwise profitable investments due to civil conflict? Answering this question is crucial to our understanding of the costs of violence, but requires the ability to measure farmers’ willingness to invest and access to exogenous variation in conflict intensity. We exploit a unique administrative dataset from Colombia’s largest agricultural bank and the 2016 demobilization agreement between the Colombian government and insurgent group FARC to overcome these challenges. A difference-in-difference analysis yields three main findings: First, credit to small producers increases after the agreement in municipalities with high FARC exposure (17% over sample mean). Higher loan applications drive this increase, with no change in supply-side variables. Second, a simple theoretical framework combined with rich information on characteristics of loan applicants and projects (including credit scores and loan outcomes) suggests that changes in project returns, but not in risk, underlie the increase in credit demand. Third, conflict is not the binding constraint on investment in areas with low access to markets. Higher investment, unchanged default rates and additional evidence of increased nighttime luminosity after the end of conflict imply an overall positive economic impact
    Keywords: Conflict, Investment, Credit, Agriculture, FARC
    JEL: D74 G21 O13 O16
    Date: 2021–04–19
  9. By: Suesse, Marvin (Trinity College Dublin); Wolf, Nikolaus (HU Berlin and CEPR)
    Abstract: What determines the development of rural financial markets? Starting from a simple theoretical framework, we derive the factors shaping the market entry of rural microfinance institutions across time and space. We provide empirical evidence for these determinants using the expansion of credit cooperatives in the 236 eastern counties of Prussia between 1852 and 1913. This setting is attractive as it provides a free market benchmark scenario without public ownership, subsidization, or direct regulatory intervention. Furthermore, we exploit features of our historical set-up to identify causal effects. The results show that declining agricultural staple prices, as a feature of structural transformation, leads to the emergence of credit cooperatives. Similarly, declining bank lending rates contribute to their rise. Low asset sizes and land inequality inhibit the regional spread of cooperatives, while ethnic heterogeneity has ambiguous effects. We also offer empirical evidence suggesting that credit cooperatives accelerated rural transformation by diversifying farm outputs.
    Keywords: microfinance; credit cooperatives; rural transformation; land inequality; prussia;
    JEL: G21 N23 O16 Q15
    Date: 2019–12–04
  10. By: Anthony N. Rezitis; Gregor Kastner
    Abstract: The present study investigates the price (co)volatility of four dairy commodities -- skim milk powder, whole milk powder, butter and cheddar cheese -- in three major dairy markets. It uses a multivariate factor stochastic volatility model for estimating the time-varying covariance and correlation matrices by imposing a low-dimensional latent dynamic factor structure. The empirical results support four factors representing the European Union and Oceania dairy sectors as well as the milk powder markets. Factor volatilities and marginal posterior volatilities of each dairy commodity increase after the 2006/07 global (food) crisis, which also coincides with the free trade agreements enacted from 2007 onwards and EU and US liberalization policy changes. The model-implied correlation matrices show increasing dependence during the second half of 2006, throughout the first half of 2007, as well as during 2008 and 2014, which can be attributed to various regional agricultural dairy policies. Furthermore, in-sample value at risk measures (VaRs and CoVaRs) are provided for each dairy commodity under consideration.
    Date: 2021–04
  11. By: Loretta Mastroeni; Greta Quaresima; Pierluigi Vellucci
    Abstract: In this article we analyse the oil-food price co-movement and its determinants in both time and frequency domains, using the wavelet analysis approach. Our results show that the significant local correlation between food and oil is only apparent. This is mainly due to the activity of commodity index investments and, to a lower extent, to the increasing demand from emerging economies. Furthermore, we employ the wavelet entropy to assess the predictability of the time series under consideration. We find that some variables share with both food and oil a similar predictability structure. These variables are those that mostly co-move with both oil and food. Some policy implications can be derived from our results, the most relevant being that the activity of commodity index investments is able to increase correlation between food and oil. This activity generates highly integrated markets and an increasing risk of joint price movements which is potentially dangerous in periods of economic downturn and financial stress. In our work we suggest that governments should also provide subsidy packages based on the commodity traded in commodity indices to protect producers and consumers from adverse price movements due to financial activity rather than lack of supply or demand.
    Date: 2021–04
  12. By: Fiona Burlig; Louis Preonas; Matt Woerman
    Abstract: Groundwater is a key resource for agricultural production globally. Increasingly rapid aquifer drawdowns—as well as the policies intended to increase their sustainability—increase costs to agricultural producers, with unknown consequences. This paper provides the first large-scale empirical estimates of how farmers respond to changes in groundwater costs in one of the world's most valuable agricultural areas: California. Using rich administrative data and exogenous variation in the price of electricity, a key input into groundwater extraction, we find that farmers are very price responsive: we estimate large price elasticities of demand for electricity (-1.17) and groundwater (-1.12). We demonstrate that crop switching and fallowing are the main channel through which farmers respond to increases in groundwater costs. Using a static discrete choice model, we estimate that a counterfactual $10 per-acre-foot groundwater tax—a level consistent with California's sustainability targets—would lead farmers to reallocate 3.9 percent of cropland, with increases in fallowing and high-value fruit and nut perennials, and decreases in annual crops and low-value perennials.
    JEL: Q15 Q25 Q41
    Date: 2021–04
  13. By: Stéphanie Leyronas (AFD - Agence française de développement); Olivier Petit (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique, UA - Université d'Artois)
    Date: 2020–12–15
  14. By: Howard, Greg (University of Illinois); Ornaghi, Arianna (University of Warwick)
    Abstract: How do different local policies in a federal system affect local land values, production, and sorting? We study the question exploiting a large historical policy change : U.S. Alcohol Prohibition in the early twentieth century. Comparing same-state early and late adopters of county dry laws in a difference-in-differences design, we find that early Prohibition adoption increased population and farm real estate values. Moreover, we find strong effects on farm productivity consistent with increased investment due to a land price channel. In equilibrium, the policy change disproportionately attracted immigrants and African-Americans.
    Keywords: Tiebout sorting ; migration ; land values ; productivity ; amenities ; credit JEL Classification: N91 ; R13 ; E22
    Date: 2021

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