Most recent papers:

• Nonfarm employment, agricultural intensification, and productivity change: empirical findings from uganda.
  Mulubrhan Amare, Bekele Shiferaw.
  Agricultural Economics. October 05, 2017
  This paper uses panel data from the Living Standards Measurement Study ‐ Integrated Surveys on Agriculture (LSMS‐ISA) for Uganda to assess the farm‐level effects of non‐farm employment on agricultural intensification and productivity change. A sample selection model is used to account for both unobserved heterogeneity and potential simultaneity between agricultural production and non‐farm income. Results show that non‐farm employment can have differential impacts on farm technology intensity and productivity. Non‐farm income is found to have a positive impact on farm hired labor and improved seed intensity; a negative effect on on‐farm family labor use; and no significant impact on fertilizer, soil water management, and joint use of farm technologies. The econometric evidence also indicates that agricultural productivity declines as non‐farm income increases. Taken together, our findings reveal important tradeoffs between non‐farm employment and income and farm productivity growth under smallholder agriculture. The results indicated that targeted policies are required to reduce these potential tradeoffs between non‐farm employment and agricultural intensification and productivity change. This article is protected by copyright. All rights reserved

  October 05, 2017   doi: 10.1111/agec.12386   open full text
• Human health and pesticide use in Sub‐Saharan Africa.
  Megan Sheahan, Christopher B. Barrett, Casey Goldvale.
  Agricultural Economics. October 04, 2017
  While pesticides – such as insecticides, fungicides, and herbicides – are often promoted as inputs that increase agricultural productivity by limiting a range of pre‐harvest losses, their use may have negative human health and labor productivity implications. We explore the relationship between pesticide use and the value of crop output at the plot level and a range of human health outcomes at the household level using large‐scale, nationally representative panel survey data from four Sub‐Saharan African countries where more than ten percent of main season cultivators use pesticides. We find that pesticide use is strongly correlated with increased value of harvest, but is also correlated with higher costs associated with human illness, including increased health expenditures and time lost from work due to sickness in the recent past. We take these results as suggestive that the findings of more targeted studies are indeed generalizable beyond their original, purposively chosen samples. This article is protected by copyright. All rights reserved

  October 04, 2017   doi: 10.1111/agec.12384   open full text
• Diet transformation in africa: the case of ethiopia.
  Ibrahim Worku Hassen, Mekdim Dereje, Bart Minten, Kalle Hirvonen.
  Agricultural Economics. September 29, 2017
  Africa's food systems are changing fast amid rapid economic growth, emerging urbanization and structural transformation. In this study, we use four rounds of nationally representative data from Ethiopia to document changes in household food consumption patterns over a period of unprecedented economic growth. We find that while the share of food in the total consumption basket is declining, food quantities and calorie intakes have considerably increased between 1996 and 2011. A decomposition analysis suggests that this was mostly driven by improvements in household incomes – a finding that is consistent across the calorie distribution. Also the content of the food basket is changing with a gradual shift toward high‐value foods such as animal products, fruits and vegetables and processed foods. Overall, this diet transformation has important implications for the food security debate and for agricultural and food policy in the country. This article is protected by copyright. All rights reserved

  September 29, 2017   doi: 10.1111/agec.12387   open full text
• Information sharing as a safeguard against the opportunistic behavior of South African Karoo Lamb farmers.
  Melissa der Merwe, Johann F. Kirsten, Jacques H. Trienekens.
  Agricultural Economics. September 21, 2017
  Misconduct in global meat supply chains are omnipresent and even more so in differentiated chains where credence attributes such as origin and taste are used to differentiate the product. By definition, these attributes signal asymmetric information which implies that in the presence of bounded rational individuals with conflicting interests, misconduct in the form of opportunistic behavior is bound to prevail. Increased information exchange through farmer networks is, however, expected to reduce opportunistic behavior. In the case of a differentiated meat product, such as Karoo Lamb, the paper studies the farmer‐abattoir transaction with the purpose of recommending strategies that can be implemented to reduce the farmer's tendency to behave opportunistically. The paper employs the PLS approach to SEM and reveals a significant negative relationship between information shared and opportunistic behavior. The results indicate significant positive relationships between trust in the abattoir and information shared as well as between farmer networks and information shared. These results are indicative of the support provided to the information shared construct by higher levels of trust between farmers and abattoirs and established farmer networks. It is, therefore, recommended that differentiated meat supply chains, through their various associations, concentrate their efforts to promote information sharing by building stronger, trust centered relationships and by supporting farmer networks. This article is protected by copyright. All rights reserved

  September 21, 2017   doi: 10.1111/agec.12389   open full text
• Designing and evaluating sustainable development pathways for semi‐subsistence crop‐livestock systems: lessons from kenya.
  Roberto O. Valdivia, John M. Antle, Jetse J. Stoorvogel.
  Agricultural Economics. September 21, 2017
  Achieving the Sustainable Development Goals in African agriculture require a better understanding why high levels of poverty and resource degradation persist in African agriculture despite decades of policy interventions and development projects. In this article, we hypothesize that policies need to account for the key features of the semi‐subsistence crop‐livestock systems in the region to become effective. The semi‐subsistence crop‐livestock systems are characterized by a high degree of bio‐physical and economic heterogeneity and a complex, diversified production system involving a combination of subsistence and cash crops with livestock. We investigated the potential for interventions proposed by the Government of Kenya to meet the Sustainable Development Goals (SDGs) by 2030. The analysis uses an integrated modeling approach designed to deal with the key features of these systems. A strategy that stimulates rural development, increases farm size to a sustainable level, and reduces distortions and inefficiencies in input and output markets could lead to a sustainable development pathway and achieve the SDGs for rural households dependent on crop‐livestock systems. This article is protected by copyright. All rights reserved

  September 21, 2017   doi: 10.1111/agec.12383   open full text
• Finding default? Understanding the drivers of default on contracts with farmers’ organizations under the World Food Programme Purchase for progress pilot.
  Joanna Upton, Erin Lentz.
  Agricultural Economics. September 20, 2017
  During the past two decades, food assistance policy has shifted toward local or regional food purchases and away from purchases from donor countries. While most local and regional procurement occurs through hard tendering processes open to large‐scale firms and farms, there is growing interest in identifying how and whether to procure from smallholder farmer organizations. To date, little is known about the drivers of successful contracting with farmers’ organizations (FOs). We utilize data from the United Nations World Food Programme Purchase for Progress pilot in three East African countries to predict defaults on contracts. We examine four possible explanations: country contexts, FO characteristics, prior experience with contracts, and contract modalities and their relationship to local spot market prices. The single most important predictor of default is the increase in market prices between contract approval and delivery. Yet, while increases in market prices are linked to increases in default, this relationship is decreasing in contract size, indicating search costs associated with breaking contracts. Our findings yield both generalizable and context‐specific insights about whether – and when – procuring from smallholder farmers can be successfully integrated into the food assistance toolkit. This article is protected by copyright. All rights reserved

  September 20, 2017   doi: 10.1111/agec.12385   open full text
• The fourth industrial revolution, agricultural and rural innovation, and implications for public policy and investments: a case of India.
  Uma Lele, Sambuddha Goswami.
  Agricultural Economics. September 20, 2017
  The Indian Government and public–private partnerships are developing and disseminating a dizzying number of innovative, networked solutions, broadly known as the Digital India initiative, to increase the efficiency of safety nets and worker productivity and to improve life. Yet, challenges to turn the power of information and other technologies into a farmer‐friendly technological revolution for India's 156 million rural households are considerable, including: (1) reliable, up‐to‐date, location‐specific message content for a diverse agriculture to help stratified households shift to productive, knowledge‐intensive agriculture as a business—government, private sector, and civil society have big roles to play; (2) digital literacy, i.e., teaching farmers how to choose and use apps, even where the digital divide is absent; apps are, or soon to be, in regional languages; and (3) monitoring actual use and impacts on users’ lives by understanding the adoption and adaptation processes. These challenges call for bottom‐up, complementary investments in physical, human, and institutional capital, and farmer‐friendly e‐platforms, while forging ahead with many top‐down policy and institutional reforms currently underway, in which progress is real and constraints holding back greater success are better understood. This article is protected by copyright. All rights reserved

  September 20, 2017   doi: 10.1111/agec.12388   open full text
• The structural transformation of african agriculture and rural spaces: introduction to a special section†.
  Christopher B. Barrett, Paul Christian, Bekele A. Shiferaw.
  Agricultural Economics. September 20, 2017
  This paper briefly introduces a special section on the structural transformation of African agriculture and rural spaces. The five papers that comprise this special section all draw on household‐level micro data to explore important aspects of the salient changes taking place in the world's most agrarian and poorest continent. This article is protected by copyright. All rights reserved

  September 20, 2017   doi: 10.1111/agec.12382   open full text
• The declining price anomaly in sequential auctions of identical commodities with asymmetric bidders: empirical evidence from the Nephrops norvegicus market in France.
  Frédéric Salladarré, Patrice Guillotreau, Patrice Loisel, Pierrick Ollivier.
  Agricultural Economics. August 23, 2017
  The declining price anomaly for sequential sales of identical commodities challenges auction theory which predicts constant prices within a day. Among other hypotheses explaining the phenomenon stands the dual value of goods including a risk premium in early transactions. We consider that asymmetric bidder groups (primary processors, fishmongers, supermarket buyers) and seasonal landings may also affect the daily price pattern. On the basis of stylized facts and several panel data models, this hypothesis is tested on a Redundant French fish market of homogenous goods (live Nephrops norvegicus) when the time effects (high and low seasons, weekday effect) affecting the demand and supply conditions are taken into consideration. All models support the evidence of a daily declining pattern, but not to the same extent for all days and seasons, and all categories of buyers. Our results also show an earlier and steeper decline on periods of lower supply (or higher demand), supporting the theoretical hypothesis of risk‐averse behaviors of bidders, especially fishmongers with respect to primary processors and supermarkets.

  August 23, 2017   doi: 10.1111/agec.12370   open full text
• The effects of Mongolia's booming mining industry on its agricultural sector: A test for Dutch disease.
  Wei Ge, Henry W. Kinnucan.
  Agricultural Economics. August 04, 2017
  Dutch disease occurs when currency strengthening associated with a booming sector of an economy crowds out a lagging trade‐dependent sector. In this study, a Keynesian‐style model is specified to deduce hypotheses about how increased foreign direct investment (FDI) aimed at Mongolia's mining sector affects its agricultural sector. A key finding is that while econometric results suggest the increased FDI strengthened Mongolia's currency, its adverse effect on Mongolia's trade‐sensitive agricultural sector is not sufficiently strong to cause the sector to decline. Although Dutch disease was not detected, the posited mechanism clearly is important. Specifically, when currency strengthening is ignored the reduced‐form elasticity of agricultural value‐added with respect to FDI is 2.7 times larger than when currency strengthening is taken into account (0.103 vs. 0.038). Also, FDI‐induced currency strengthening causes the Keynesian multiplier ∂Y/∂G¯ to drop from 2.40 to 2.00 and the FDI multiplier ∂Y/∂FDI¯ to drop from 3.05 to 1.89.

  August 04, 2017   doi: 10.1111/agec.12374   open full text
• Modeling regime‐dependent agricultural commodity price volatilities.
  Na Li, Alan Ker, Abdoul G. Sam, Satheesh Aradhyula.
  Agricultural Economics. July 25, 2017
  In stark contrast to financial markets, relatively little attention has been given to modeling agricultural commodity price volatility. In recent years, numerous methodologies with various strengths have been proposed for modeling price volatility in financial markets. We propose using a mixture of normals with unique GARCH processes in each component for modeling agricultural commodity prices. While a normal mixture model is quite flexible and allows for time varying skewness and kurtosis, its biggest strength is that each component can be viewed as a different market regime and thus estimated parameters are more readily interpreted. We apply the proposed model to ten different agricultural commodity weekly cash prices. Both in‐sample fit and out‐of‐sample forecasting tests confirm that the two‐state NM‐GARCH approach performs better than the traditional normal GARCH model. A significant and state‐dependent inverse leverage effect is detected only for pork in the regime where the price is expected to drop, indicating the volatility in this regime tends to increase more following a realized price rise than a realized price drop.

  July 25, 2017   doi: 10.1111/agec.12366   open full text
• Demand for collective food‐safety standards.
  John Bovay.
  Agricultural Economics. July 19, 2017
  In 2007, leading members of the U.S. fresh‐tomato industry responded to pressure from the U.S. Food and Drug Administration regarding the industry's long history of poor food‐safety outcomes and adopted a set of standards for production practices related to food safety at all levels of the fresh‐tomato supply chain. Adherence to these standards was required under a federal marketing order that applied to essentially all tomatoes grown in Florida. The California Tomato Farmers cooperative, whose members produced the vast majority of fresh tomatoes grown in California, also required that its members adopt these standards. The collective food‐safety standards for fresh tomatoes closely resemble the requirements of the U.S. Food Safety Modernization Act (FSMA) Produce Safety Rule, so the collective adoption of these standards provides an excellent case study to illustrate the possible effects of FSMA implementation on demand. I assess the hypothesis that demand for tomatoes from Florida and California increased following the adoption of standards for food‐safety practices by growers in those states, relative to demand for tomatoes from other regions. My analysis demonstrates essentially no evidence that demand for fresh tomatoes responded positively to the implementation of collective food‐safety practices.

  July 19, 2017   doi: 10.1111/agec.12375   open full text
• Commodity price bubbles and macroeconomics: evidence from the Chinese agricultural markets.
  Jian Li, Jean‐Paul Chavas, Xiaoli L. Etienne, Chongguang Li.
  Agricultural Economics. July 19, 2017
  This article investigates the links between commodity price bubbles and macroeconomic factors, with an application to the agricultural commodity markets in China from 2006 to 2014. Price bubbles are identified using a newly developed, recursive right‐tailed unit root test. A Zero‐inflated Poisson model is used to analyze the factors contributing to bubbles. Results show that (a) there were speculative bubbles in most Chinese agricultural commodity futures markets during the sample period, though their presence was infrequent; (b) economic growth, money supply, and inflation have positive effects on bubble occurrences, while interest rates have a negative effect; and (c) among all macroeconomic factors considered, economic growth and money supply have the greatest impact in triggering bubbles. Our findings shed new light on the nature and formation of bubbles in the Chinese agricultural commodity markets.

  July 19, 2017   doi: 10.1111/agec.12372   open full text
• Testing for spatial market integration: evidence for Colombia using a pairwise approach.
  Ana María Iregui, Jesús Otero.
  Agricultural Economics. July 19, 2017
  We examine the extent of spatial market integration in Colombia using consumer price index data for 153 consumer goods in 13 cities. An econometric analysis of the time‐series properties of all the possible city price differentials reveals that market integration tends to occur more frequently in unprocessed food products, as opposed to processed foods, other traded and nontraded products. The results also support the view that, except for nontraded products, the speed at which prices adjust to the long‐run equilibrium is slower for cities that are farther apart.

  July 19, 2017   doi: 10.1111/agec.12371   open full text
• Can smallholder farmers adapt to climate variability, and how effective are policy interventions? Agent‐based simulation results for Ethiopia.
  Thomas Berger, Christian Troost, Tesfamicheal Wossen, Evgeny Latynskiy, Kindie Tesfaye, Sika Gbegbelegbe.
  Agricultural Economics. July 18, 2017
  Climate variability with unexpected droughts and floods causes serious production losses and worsens food security, especially in Sub‐Saharan Africa. This study applies stochastic bioeconomic modeling to analyze smallholder adaptation to climate and price variability in Ethiopia. It uses the agent‐based simulation package Mathematical Programming‐based Multi‐Agent Systems (MPMAS) to capture nonseparable production and consumption decisions at household level, considering livestock and eucalyptus sales for consumption smoothing, as well as farmer responses to policy interventions. We find the promotion of new maize and wheat varieties to be an effective adaptation option, on average, especially when accompanied by policy interventions such as credit and fertilizer subsidy. We also find that the effectiveness of available adaptation options is quite different across the heterogeneous smallholder population in Ethiopia. This implies that policy assessments based on average farm households may mislead policy makers to adhere to interventions that are beneficial on average albeit ineffective in addressing the particular needs of poor and food insecure farmers.

  July 18, 2017   doi: 10.1111/agec.12367   open full text
• International research on vegetable improvement in East and Southern Africa: adoption, impact, and returns.
  Pepijn Schreinemachers, Teresa Sequeros, Philipo Joseph Lukumay.
  Agricultural Economics. July 18, 2017
  There is a lack of evidence for impact at scale of vegetable research and development, although the importance of vegetables for human nutrition and smallholder incomes is generally understood. We therefore study adoption and impact of improved tomato and African eggplant varieties developed through international agricultural research, released by national agricultural research and extension systems, and supplied to farmers by private seed companies in East and Southern Africa from 1990 to 2014. The study finds that in 2014, varieties developed by the World Vegetable Center accounted for 50% of tomato and 98% of African eggplant commercial seed production in East and Southern Africa. For Tanzania alone, investment in crop improvement generated economic gains of US$ 255 million for tomato and US$ 5 million for African eggplant up to 2014. The internal rate of return is 26% for tomato and 12% for African eggplant, though we project the latter to increase to 26% by 2024 as the variety was released only in 2007. These findings support the view that agricultural policy and investment reoriented towards contemporary nutritional challenges will give high returns to investment.

  July 18, 2017   doi: 10.1111/agec.12368   open full text
• Cereal price shocks and volatility in sub‐Saharan Africa: what really matters for farmers’ welfare?
  Emiliano Magrini, Jean Balié, Cristian Morales‐Opazo.
  Agricultural Economics. July 11, 2017
  The lack of information as well as some misperceptions about the distinction between the welfare consequences of higher versus more volatile cereal prices has limited the effectiveness of policy interventions during the recent food crises in many developing countries. This article proposes an integrated empirical strategy to investigate and compare the different effects of these two phenomena and tests it using nationally representative household survey data from four sub‐Saharan countries. Results show that the negative impacts of a cereal price increase substantially outweigh the effects of price volatility on household welfare across the entire income distribution. The amplitude and the distribution of those effects depend heavily on specific factors, such as: the weight of food consumption over total expenditure; the budget share devoted to cereals; the substitution effect among food groups; and the relative number of net sellers versus net buyers accessing the market. We also show that volatility mainly harms the poorest quintile of the population.

  July 11, 2017   doi: 10.1111/agec.12369   open full text
• Incentives and moral hazard: plot level productivity of factory‐operated and outgrower‐operated sugarcane production in Ethiopia.
  Mengistu Assefa Wendimu, Arne Henningsen, Tomasz Gerard Czekaj.
  Agricultural Economics. July 05, 2017
  We investigate the unique contractual arrangement between a large Ethiopian sugar factory and its adjacent outgrower associations. The only significant difference between the sugarcane production on the factory‐operated sugarcane plantation and on the outgrower‐operated plots is the remuneration system and thus, the incentives to the workers. We compare the productivity of these two production schemes using a cross‐sectional plot‐level data set. As sugarcane production depends on various exogenous factors that are measured as categorical variables (e.g., soil type, cane variety, etc.), we estimate the production function by a nonparametric kernel regression method that takes into account both continuous and categorical explanatory variables without assuming a functional form and without imposing restrictions on interactions between the explanatory variables. Our results show that outgrower‐operated plots have—ceteris paribus—a statistically and economically significantly higher productivity than factory‐operated plots, which can be explained by outgrowers having stronger incentives to put more effort into their work than the employees of the sugar factory.

  July 05, 2017   doi: 10.1111/agec.12356   open full text
• Differential livelihood impacts of oil palm expansion in Indonesia.
  Vijesh Krishna, Michael Euler, Hermanto Siregar, Matin Qaim.
  Agricultural Economics. June 28, 2017
  In this article, the impacts of oil palm adoption on livelihoods of smallholder farm households are analyzed. The study builds on survey data from Sumatra, Indonesia. Treatment‐effects and endogenous switching regression models suggest that smallholder households benefit from oil palm adoption on average. Part of the benefit stems from the fact that oil palm requires less labor than rubber, the main alternative crop. This allows oil palm adopters to allocate more labor to off‐farm activities and/or to expand their farmland. For households with a low land‐to‐labor ratio, rubber is typically a more lucrative crop than oil palm. Depending on various social and institutional factors, households’ access to land, labor, and capital varies, contributing to impact heterogeneity. Welfare gains associated with oil palm are more pronounced among households that have formal land titles and access to additional land to expand their farm size during the process of adoption.

  June 28, 2017   doi: 10.1111/agec.12363   open full text
• Valuation of ecosystem services provided by irrigated rice agriculture in Thailand: a choice experiment considering attribute nonattendance.
  Damien Jourdain, Somsak Vivithkeyoonvong.
  Agricultural Economics. June 28, 2017
  This research investigates how the public of a middle‐income country, Thailand, values ecosystem services associated with irrigated rice agriculture using a choice experiment. The results show a significant willingness to pay for services such as drought mitigation, water quality and the environment and maintenance of rural lifestyles and rice landscapes. The iterative procedure developed to fully analyze the incidence of attribute nonattendance (ANA) improved the model fit when compared with a multinomial logit model or an ANA model with potentially only one attribute ignored at a time (ANA‐1). Moreover, the inferred probability of the class of respondents having attended all attributes was 45%, compared to 9% with ANA‐1 model. However, it also suggests that 55% of the respondents made their choices by considering only two of the five attributes. Finally, this research also suggests that failing to consider ANA does not change the public ranking of scenarios contrasted by the services they would provide but would overestimate the WTP for these scenarios.

  June 28, 2017   doi: 10.1111/agec.12364   open full text
• Decent rural employment and farm production efficiency: empirical evidence from Tanzania and Ethiopia.
  Habtamu Yesigat Ayenew, Elisenda Estruch, Johannes Sauer, Getachew Abate‐Kassa, Lena Schickramm, Peter Wobst.
  Agricultural Economics. June 28, 2017
  Promoting decent rural employment, by creating new jobs in rural areas and upgrading the existing ones, could be one of the most efficient pathways to reduce rural poverty. This article systematically investigates the impact of decent rural employment on agricultural production efficiency in Ethiopia and Tanzania. The analysis applies an output‐oriented distance function approach with an estimation procedure that accounts for different technological, demographic, socioeconomic, institutional, and decent rural employment indicators. Data of the 2011 round of Living Standards Measurement Study‐Integrated Surveys on Agriculture for the two countries are used, and a set of indicators is derived to proxy core dimensions of decent rural employment. The findings of our analysis show that decent rural employment contributes to agricultural production efficiency.

  June 28, 2017   doi: 10.1111/agec.12359   open full text
• The linkage between the U.S. ethanol market and developing countries’ maize prices: a panel SVAR analysis.
  Na Hao, Peter Pedroni, Gregory Colson, Michael Wetzstein.
  Agricultural Economics. June 20, 2017
  The major expansion of U.S. ethanol production raises concerns about the potential detrimental impacts on developing countries’ agricultural prices, farm income, and food security. To assess the sensitivity of maize prices to ethanol production, this study explores the linkage between the U.S. ethanol market and developing countries’ maize prices. The econometric approach, based on a panel structural vector autoregression model, captures market interdependencies and the likelihood that developing countries’ responses are both heterogeneous and dynamic. The results indicate that the U.S. ethanol market's impacts on maize prices in developing countries are heterogeneous and that coastal countries are more susceptible to U.S. economic shocks. The estimates also suggest that countries more dependent on food imports and/or receiving U.S. food aid are at a higher risk of being affected by such shocks. Overall, the results indicate that those countries with the greatest sensitivity and exposure to global agricultural commodity markets could benefit from domestic policies and international assistance, which reduce their exposure to impacts from the U.S. maize market.

  June 20, 2017   doi: 10.1111/agec.12362   open full text
• Determinants and impact of sustainable land management (SLM) investments: A systems evaluation in the Blue Nile Basin, Ethiopia.
  Emily Schmidt, Paul Chinowsky, Sherman Robinson, Kenneth Strzepek.
  Agricultural Economics. June 16, 2017
  Ongoing debate over water management along the Blue Nile and land degradation in Ethiopia emphasizes the need for efficiency gains in agricultural production through sustainable land management (SLM). However, previous SLM studies overlook the tradeoffs involved in maintaining SLM investments over time. We address this limitation by combining a household survey that evaluates the economic impacts of SLM investments and maintenance, with a hydrological model that explores location‐specific infrastructure effects. We then use a multi‐market model to evaluate the impacts of alternative SLM investments on agricultural production, prices, and incomes over time. Analysis suggests SLM investments must be maintained for at least seven years to show significant increases in value of production, and that terraces on moderate and steep slopes are most effective in increasing agricultural yields. However, the benefits of terracing do not outweigh the cost of foregone off‐farm labor opportunities, nor compensate for lower agricultural prices from increased supply. Thus, SLM investments must be paired with other input and infrastructure investments, as well as subsidies for initial labor costs, in order to incentivize adoption and long‐term SLM maintenance.

  June 16, 2017   doi: 10.1111/agec.12361   open full text
• The impact of the 2008 financial crisis on dynamic productivity growth of the Spanish food manufacturing industry. An impulse response analysis.
  Magdalena Kapelko, Alfons Oude Lansink, Spiro E. Stefanou.
  Agricultural Economics. June 16, 2017
  The emergence of a financial crisis is an event that can impact the fortunes of nearly all economic agents. The focus here is on the 2008 financial crisis and how firms’ productivity growth was impacted by this crisis in the years that followed. This article focuses on dynamic productivity growth and its components using a firm‐level data set of Spanish meat processing, dairy processing, and oils and fats firms. The impulse response analysis shows that the impact of the crisis on dynamic productivity growth is negative and persistent in the oils and fats industry, initially positive but then negative in the meat processing industry, and positive in the dairy processing industry. The observed magnitudes of change in indicator are between 2% and 5% for oils and fats industries, and of 1% in both dairy and meat industries. Our analysis further confirms that firms’ size is an important factor in explaining how crisis impacts dynamic productivity growth and its components, while we find only slight evidence regarding the firms’ experience in the market.

  June 16, 2017   doi: 10.1111/agec.12357   open full text
• Agricultural technology adoption and child nutrition enhancement: improved maize varieties in rural Ethiopia.
  Di Zeng, Jeffrey Alwang, George W. Norton, Bekele Shiferaw, Moti Jaleta, Chilot Yirga.
  Agricultural Economics. June 15, 2017
  Adoption of improved crop varieties can lead to multiple benefits to farm households, including increased productivity, incomes, and food consumption. However, possible impacts of adoption on child nutrition outcomes are rarely explored in the literature. This article helps bridge this gap through an impact assessment of the adoption of improved maize varieties (IMVs) on child nutrition outcomes using a recent household survey from rural Ethiopia. The conceptual linkage between IMV adoption and child nutrition is first established using an agricultural household model. Instrumental variable estimation suggests the overall impacts of adoption on child height‐for‐age and weight‐for‐age z‐scores to be positive and significant. Quantile instrumental variable regressions further reveal that such impacts are largest among children with poorest nutrition outcomes. Finally, by combining a decomposition procedure with system of equations estimation, it is found that the increase in own‐produced maize consumption is the major channel through which IMV adoption affects child nutrition.

  June 15, 2017   doi: 10.1111/agec.12358   open full text
• Can flexible agricultural microfinance loans limit the repayment risk of low diversified farmers?
  Ron Weber, Oliver Musshoff.
  Agricultural Economics. June 15, 2017
  Using a unique data set from a commercial microfinance institution in Madagascar, this article investigates the credit risk of microfinance loans with flexible repayment schedules for crop farmers. Flexible repayment schedules allow a redistribution of principal payments during periods with low agricultural returns to periods when agricultural returns are high through predefined grace periods. We apply propensity score matching to investigate how different numbers of grace periods reflecting different levels of production diversification affect the credit risk of crop farmers. In this attempt, three delinquency categories reflecting various levels of credit risk are assessed. Moreover, we consider the specifics of the regions where loans were disbursed. Our results reveal that loans with predefined grace periods show significantly higher delinquencies. This effect is significant over all three delinquency categories for loans disbursed to low diversified crop farmers. For the more diversified farmers, this effect is only significant for the lowest delinquency category. Hence, predefined grace periods might bridge periods with low agricultural returns but come at the cost of higher credit risk for the lender. The magnitude of these effects is, however, small.

  June 15, 2017   doi: 10.1111/agec.12355   open full text
• Mobile money, agricultural marketing, and off‐farm income in Uganda.
  Haruna Sekabira, Matin Qaim.
  Agricultural Economics. May 15, 2017
  Mobile money (MM) services can contribute to welfare gains in smallholder farm households. Previous research showed that one important pathway for these MM‐related welfare gains is through higher remittances received from relatives and friends. Here, the role of other impact pathways is examined, especially focusing on agricultural marketing and off‐farm economic activities. The analysis builds on panel data from smallholder coffee farmers in Uganda. Regression models show that the adoption of MM technology has contributed to higher household incomes and consumption levels. Off‐farm income gains are identified to be an important pathway, also beyond remittances. Typical off‐farm income sources are small businesses in trade, transport, and handicrafts, which benefit from novel savings and money transfer opportunities through MM. In terms of agricultural marketing, MM users sell a larger proportion of their coffee as shelled beans to buyers in high‐value markets, instead of selling to local traders immediately after harvest. MM services help to reduce cash constraints and facilitate transactions with buyers from outside local regions. In conclusion, MM can contribute to rural development through various important pathways. Analysis of adoption patterns suggests that MM services are socially inclusive.

  May 15, 2017   doi: 10.1111/agec.12360   open full text
• Impacts of terrain attributes on economics and the environment: costs of reducing potential nitrogen pollution in wheat production.
  Cory G. Walters, C. Richard Shumway, David R. Huggins.
  Agricultural Economics. March 07, 2017
  The economic cost of achieving desired environmental outcomes from uniform and variable rate fertilizer application technologies depends both on market forces and agronomic properties. Using spatial econometric methods, we analyze the impact of nitrogen fertilizer supply by terrain attribute on the yield and protein content of hard red spring wheat grown in Eastern Washington as well as the impact on residual nitrogen. We find significant association with all three. The economic impact of nitrogen restrictions depends critically on both prices and level of the restriction. Uniform application of nitrogen was found to economically outperform variable rate application, but variable rate application provided positive environmental benefits due to less residual nitrogen.

  March 07, 2017   doi: 10.1111/agec.12321   open full text
• Women's empowerment in agriculture: Implications for technical efficiency in rural Bangladesh.
  Greg Seymour.
  Agricultural Economics. January 25, 2017
  Although a great deal of research exists on gender and agriculture, few studies investigate the implications of reduced gender disparities in households for technical efficiency. In this article, I compare the levels of technical efficiency achieved on plots operated by households with different levels of gender disparities. Using plot‐level data from the 2011–2012 Bangladesh Integrated Household Survey and drawing on indicators derived from the Women's Empowerment in Agriculture Index, I estimate a stochastic frontier production function model, which includes women's empowerment in agriculture as an exogenous determinant of technical inefficiency. I find that reduced gender disparities within households (measured in terms of the empowerment gap between spouses) are associated with higher levels of technical efficiency. This result extends to plots that women jointly manage with their spouses, as well as those that women do not actively manage.

  January 25, 2017   doi: 10.1111/agec.12352   open full text
• The impact of TPP and RCEP on tea exports from Vietnam: the case of tariff elimination and pesticide policy cooperation.
  Bo Xiong.
  Agricultural Economics. January 24, 2017
  Regional trade agreements are the dominant arrangement for economic integration. What does a dual membership mean for countries participating in multiple regional negotiations? We address the question from the perspective of tea exporters in Vietnam, a member of both the Trans‐Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). Focusing on the removal of tariffs and the cooperation on pesticide residue standards, we find that the TPP agreement will raise Vietnam's tea exports by about $4 million a year if TPP endorses Codex standards. However, Vietnamese tea exports will decline if TPP endorses American standards, unless sufficient technical assistance is provided. After the RCEP agreement takes effect, tea exporters from China and India will further penetrate the TPP markets by re‐exporting from Vietnam.

  January 24, 2017   doi: 10.1111/agec.12343   open full text
• The Swiss payment for milk processed into cheese: ex post and ex ante analysis.
  Robert Finger, Giulia Listorti, Axel Tonini.
  Agricultural Economics. January 24, 2017
  We make use of both an ex post and an ex ante evaluation to analyze the Swiss payment for milk processed into cheese. This payment for each kilogram of raw milk processed into cheese is issued to milk producers through dairy processors. In the ex post evaluation, by applying a vector autoregressive model, we estimate the effects of reductions of the payment for prices of raw milk used to produce Emmentaler, Gruyère, and industrial cheese. Past declines in the payment have only been partially transmitted to raw milk prices. The rate of transmission is higher for milk used for the production of industrial cheese than for artisan cheeses. In the ex ante impact evaluation, we use a partial equilibrium model and develop a counterfactual scenario in which the payment is removed. The payment for milk processed into cheese is found to have effects on cheese production and exports but also has important indirect effects on other dairy products. Our findings suggest that about two‐thirds of the payment are benefiting milk producers. At the same time, the overall welfare losses resulting from the elimination of the aid are smaller than the budget allocated to this measure, suggesting a net welfare gain from elimination.

  January 24, 2017   doi: 10.1111/agec.12345   open full text
• Food versus fuel: examining tradeoffs in the allocation of biomass energy sources to domestic and productive uses in Ethiopia.
  Dawit Mekonnen, Elizabeth Bryan, Tekie Alemu, Claudia Ringler.
  Agricultural Economics. January 24, 2017
  Rural households in Ethiopia have limited options to meet their domestic energy needs because they lack access to modern fuels and technologies. Domestic use of certain fuel sources, such as cow dung, can hinder agricultural outcomes and productivity. This article explores the tradeoffs between domestic and productive uses of biomass energy sources in the Nile Basin of Ethiopia using a nonseparable farm household model where labor allocation to energy collection and farming are analyzed simultaneously. We estimate a system of five structural equations using three‐stage least squares and find that the use of dung as a domestic fuel source has negative implications for the value of harvested crops, while use of on‐farm fuelwood is associated with increased value of agricultural output. On‐farm production of fuelwood appears to increase the value of crop output and provide labor savings, by making fuelwood collection more convenient for households. Policy interventions to support the expansion of agroforestry and increase access to new energy‐efficient technologies are needed to ensure that agricultural productivity can be both increased and sustained.

  January 24, 2017   doi: 10.1111/agec.12344   open full text
• Do the EU countries import at the same price? The case of coffee.
  Andrea Cerasa, Daniela Buscaglia.
  Agricultural Economics. January 20, 2017
  The establishment of the Economic and Monetary Union was expected to determine price convergence in the market of the European Union, leading to the equilibrium theorized by the law of one price. This article investigates prices convergence in the coffee market among European importers. Coffee is not only a tradable and traded good, but also one of the most valuable traded commodities. We account for different qualities of coffee in a hedonic regression model, which isolate and remove the effects of factors that might affect price dispersion. Adjusted import prices result to be significantly different between European Member States, and do not support the hypothesis of a deepening European market integration.

  January 20, 2017   doi: 10.1111/agec.12342   open full text
• Decompositions of corn price effects: implications for feed grain demand and livestock supply.
  Dong Hee Suh, Charles B. Moss.
  Agricultural Economics. January 19, 2017
  This article examines how corn prices affect the demand for feed grains and the supply of livestock outputs. The differential approach to the theory of the multiproduct firm is employed to examine ex ante decisions about feed grain demand and livestock supply. The estimation results suggest that livestock producers have little flexibility in adjusting the demand for corn in response to an increase in corn prices. The substitutable relationship between corn and distillers’ grains contributes to alleviating pressures on feed costs in response to high corn prices. In addition, the estimation results highlight that the composition of livestock supply can be altered by changes in livestock prices. On the basis of the estimated elasticities, the decompositions of profit‐maximizing input demand are conducted to examine the effects of changes in corn prices on feed grain demand and livestock supply. The decomposition results reveal that an increase in corn prices reduces corn demand but raises the demand for distillers’ grains mainly due to the substitution effects of corn price changes. The decomposition results also show that an increase in the price of corn reduces cattle supply but raises the supply of chicken and pork due to the output relationships in supply.

  January 19, 2017   doi: 10.1111/agec.12350   open full text
• The influence of proximity to market on bean producer prices in Nicaragua.
  Ayako Ebata, Pamela Alejandra Velasco Pacheco, Stephan Cramon‐Taubadel.
  Agricultural Economics. January 19, 2017
  Transport costs are an important determinant of smallholder welfare in developing countries. In particular, transport costs influence the prices that smallholders receive for their produce. We propose a simple way of quantifying this influence. Taking the example of bean producers in Nicaragua, we employ a hedonic price model to estimate the effects of a smallholder's proximity to markets on the prices that he/she receives, while controlling for other factors such as the volume and quality of beans sold. We find that on average each additional minute of travel time reduces farm gate prices by 2.5 cents per quintal. Based on these results, the annual income from bean sales of the average smallholder in our sample would increase by between 24 and 110 USD if travel time to markets were reduced by 25%. Estimates of this nature can make an important contribution to cost–benefit assessments of infrastructure investments.

  January 19, 2017   doi: 10.1111/agec.12347   open full text
• You get what you pay for: the link between price and food safety in Kenya.
  Vivian Hoffmann, Christine Moser.
  Agricultural Economics. January 19, 2017
  The lack of a reliably safe food supply in developing countries imposes both health and economic costs. Food safety is one of several dimensions of food quality that are typically unobservable at the time of purchase. Branding can overcome this information problem by allowing firms to build reputations based on the quality of their products. If a reputation for food safety is valued directly by consumers, or if food safety is correlated with other valued attributes, firms producing safer food should be able to use their brand equity to charge higher prices. In addition, firms with stronger brand equity have stronger incentives to meet food safety standards in order to maintain that equity. Using data from more than 900 maize flour samples representing 23 distinct brands in eastern and central Kenya, we explore the relationship between price and contamination with aflatoxin. Aflatoxin is a fungal toxin common in maize, groundnuts, and other crops around the world. We find a strong negative correlation between price and contamination at the brand level, consistent with the hypothesized positive relationship between brand equity and food quality.

  January 19, 2017   doi: 10.1111/agec.12346   open full text
• “Resistance is futile”: estimating the costs of managing herbicide resistance as a first‐order Markov process and the case of U.S. upland cotton producers.
  Dayton M. Lambert, James A. Larson, Roland K. Roberts, Burton C. English, Xia “Vivian” Zhou, Lawrence L. Falconer, Robert J. Hogan, Jason L. Johnson, Jeanne M. Reeves.
  Agricultural Economics. January 13, 2017
  A 2012 survey of upland U.S. cotton producers was analyzed to determine the factors contributing to changes in weed management costs (WMCs) after the identification of herbicide‐resistant weeds. An ordered probit regression estimated changes in WMC as a first‐order Markov process. The most important determinants of post‐resistance cost increases were initial WMCs, adoption of labor‐intensive remedial practices, and wick application of herbicides. Cultivation and mechanical/chemical‐intensive practices did not increase WMCs. Post‐resistance changes in WMC ranged between $85 and $138 ha−1, depending on the practices adopted. WMCs increased by $88 ha−1 when cost‐neutral practices were adopted. The in‐sample aggregate costs of managing herbicide resistance ranged between $25 and $53 million, depending on the types of adopted practices.

  January 13, 2017   doi: 10.1111/agec.12341   open full text
• Estimating product‐specific and multiproduct economies of scale with data envelopment analysis.
  Bryon J. Parman, Allen M. Featherstone, Brian K. Coffey.
  Agricultural Economics. January 10, 2017
  Nonparametric cost frontier estimation and subsequent analysis of the relative efficiency of firms has historically been conducted without critically examining the shape of the cost frontier. The shape of the cost frontier has been examined using additional parametric estimation methods to recover potential cost savings from multiproduct and product‐specific economies of scale. This paper presents and tests an approach to estimate multiproduct and product‐specific economies of scale using data envelopment analysis. Data for the study are simulated assuming an underlying production technology. Nonparametric estimates of efficiency, multiproduct scale, product specific scale, and scope economies are compared to those of the assumed production technology. Results show that the nonparametric approach accurately estimates multiproduct economies of scale and product‐specific economies of scale under alternative inefficiency distributional assumptions.

  January 10, 2017   doi: 10.1111/agec.12353   open full text
• Motivations to grow energy crops: the role of crop and contract attributes.
  Madhu Khanna, Jordan Louviere, Xi Yang.
  Agricultural Economics. January 10, 2017
  Perennial energy crops are a promising source of bioenergy whose production involves production risks, long‐term commitment of land and need for crop‐specific investments without the coverage of crop insurance potentially available for conventional crops. We conduct a choice experiment in five states in the Midwestern and South‐central regions of the U.S. to examine the effect of crop‐contract attributes on the joint discrete‐continuous choice decisions to adopt an energy crop and convert acres to it from a status quo use, while controlling for the effect of various farmers’ risk and time preferences, sociodemographic characteristics, and availability of crop insurance for conventional crops. We find robust evidence that high discount rates, high upfront establishment costs and need for crop‐specific investments create disincentives for adoption and allocation of land to energy crop production. The effects of riskiness of returns and risk aversion are less robust across specifications. The effect of conventional crop insurance on the energy crop adoption decision differs across types of insurance; in particular, farmers with revenue insurance are statistically significantly less likely to adopt an energy crop. Our results have implications for the design of effective contracts and policy incentives to induce the production of energy crops.

  January 10, 2017   doi: 10.1111/agec.12332   open full text
• Leveling the field for biofuels: comparing the economic and environmental impacts of biofuel and other export crops in Malawi.
  Franziska Schuenemann, James Thurlow, Manfred Zeller.
  Agricultural Economics. December 29, 2016
  Biofuels often raise the specter of food insecurity, water resource depletion, and greenhouse gas emissions from land clearing. These concerns underpin the “sustainability criteria” governing access to European biofuel markets. However, it is unclear if producing biofuels in low‐income countries does exacerbate poverty and food insecurity, and moreover, whether the sustainability criteria should apply to all agricultural exports entering European markets. We develop an integrated modeling framework to simultaneously assess the economic and environmental impacts of producing biofuels in Malawi. We incorporate the effects of land use change on crop water use, and the opportunity costs of using scarce resources for biofuels instead of other crops. We find that biofuel production reduces poverty and food insecurity by raising household incomes. Irrigated outgrower schemes, rather than estate farms, lead to better economic outcomes, fewer emissions, and similar water requirements. Nevertheless, to gain access to European markets, Malawi would need to reduce emissions from ethanol plants. We find that biofuels’ economic and emissions outcomes are generally preferable to tobacco or soybeans. We conclude that the sustainability criteria encourage more sustainable biofuel production in countries like Malawi, but are perhaps overly biased against biofuels since other export crops raise similar concerns about food security and environmental impacts.

  December 29, 2016   doi: 10.1111/agec.12335   open full text
• Rice demand in Tanzania: an empirical analysis.
  Edith Lazaro, Abdoul G. Sam, Stanley R. Thompson.
  Agricultural Economics. December 29, 2016
  We investigate the consumer side of the Tanzania rice market with the primary objective of estimating price elasticities of imported and domestically produced rice. Previous studies of the rice market in Tanzania claim that domestic rice is implicitly protected by consumer preference of its perceived better quality. However, rice producers increasingly complain that imported rice adversely impacts the price of domestic rice. Using household consumer survey data, we estimate price and expenditure elasticities of imported rice, domestic rice, and maize to assess their substitutability in the Tanzanian diet. Our results show that Tanzanian consumers have a preference for domestic rice varieties with weak substitutability between domestic and imported rice varieties.

  December 29, 2016   doi: 10.1111/agec.12325   open full text
• Targeting, bias, and expected impact of complex innovations on developing‐country agriculture: evidence from Malawi.
  Beliyou Haile, Carlo Azzarri, Cleo Roberts, David J. Spielman.
  Agricultural Economics. December 29, 2016
  Agronomic analyses of new technologies are often conducted under carefully controlled research station programs or trials managed by self‐selected farmers. Oftentimes, the technologies are then scaled up with minimal evaluation under real‐world conditions. Yet, the interim step between agronomic trials and large‐scale promotion is crucial to generate evidence on the social and economic impact of technologies that is both internally valid and generalizable. The article focuses on a participatory action research program in Malawi designed to test and identify scalable technology options to intensify the smallholder sector and contribute to poverty reduction and food and nutrition security. We examine the socioeconomic characteristics of farmers testing technologies and find evidence of systematic targeting of better‐endowed farmers. After controlling for observable differences using matching and a doubly robust estimator, we find evidence of early positive effects on maize yield and harvest value, although placebo tests suggest possible selection on unobservables. We note that attention should be given to program design and household characterization to better define and improve targeting criteria, technology selection, and external validity.

  December 29, 2016   doi: 10.1111/agec.12336   open full text
• The effect of intellectual property rights on agricultural productivity.
  Mercedes Campi.
  Agricultural Economics. December 29, 2016
  This article explores how the strengthening of intellectual property (IP) protection affects agricultural productivity in a panel of countries for the period 1961–2011. Using an index of IP protection for plant varieties, we study the effect of stronger intellectual property rights (IPRs) on cereal yields and two different types of cereals: Open‐pollinated (wheat) and hybrid (maize). We found that the strengthening of IPRs has a positive effect on productivity of cereals for high‐ and low‐income countries. However, we found no significant effect for middle‐income countries. In addition, we found that becoming a member of the Trade Related Aspects of Intellectual Property Rights negatively affects cereal yields. Finally, we found evidence of the existence of nonlinearities in the effect of IPRs on agricultural yields, which confirms a threshold effect of IPRs that also varies for countries of different income level. The findings support the hypothesis that country specificities are important in determining the effect of IPRs and imply that there is no unique system that fits all.

  December 29, 2016   doi: 10.1111/agec.12337   open full text
• Modeling farmers’ decisions on tea varieties in Vietnam: a multinomial logit analysis.
  Phu Nguyen‐Van, Cyrielle Poiraud, Nguyen To‐The.
  Agricultural Economics. December 29, 2016
  This article analyzes households’ choice on tea varieties in Vietnam by using a multinomial logit model. The modeling takes into account the issue of unobserved individual heterogeneity and the endogeneity of some explanatory variables (use of chemical and organic fertilizers). The results show that important factors influencing the decision to adopt one type of tea varieties include income, age, household size, farming contract, and use of organic fertilizers, but also membership of professional associations such as the Tea Association and the Farmers Union.

  December 29, 2016   doi: 10.1111/agec.12334   open full text
• Demand for a labor‐based drought insurance scheme in Ethiopia: a stated choice experiment approach.
  Million A. Tadesse, Frode Alfnes, Olaf Erenstein, Stein T. Holden.
  Agricultural Economics. December 29, 2016
  Index‐based weather insurance is increasingly used to manage weather‐related risks in smallholder agriculture. However, cash‐constrained smallholders often lack the resources to pay an insurance premium, which may undermine its wider adoption. This article investigates alternative insurance payment methods that may help to enhance the adoption of index‐based weather insurance. We use a choice experiment to elicit smallholders’ willingness to pay in cash or labor for index‐based weather insurance in four districts in the south‐central highlands of Ethiopia. The insurance schemes were created using a fractional factorial design with three factors: work, cash, and payout rate. We analyze the choice data using a random parameter mixed logit model. We find that the average participants need a subsidy to pay cash for insurance because their willingness to pay is less than the expected cost of the insurance. On average, they are willing to pay only 0.81 ETB (Ethiopian currency) to get an expected yearly payout of 1 ETB. However, most are willing to participate in work‐for‐insurance programs at lower daily wage rates than is common for other work programs in Ethiopia.

  December 29, 2016   doi: 10.1111/agec.12351   open full text
• The heterogeneous farm‐level impact of the 2005 CAP‐first pillar reform: A multivalued treatment effect estimation.
  Roberto Esposti.
  Agricultural Economics. December 29, 2016
  This article aims to evaluate the impact of the 2005 reform of the Common Agricultural Policy (CAP) on farm production choices as a treatment effect (TE). This impact is measured through alternative metrics of the short‐term changes of the output vector. The heterogeneity of the response to the reform is assessed by estimating both average and quantile TE. As this heterogeneous response may depend on the different farm‐level CAP support, a multivalued treatment approach is adopted and applied to treated units (i.e., supported farms). This approach is applied to a balanced panel of Italian FADN farms observed over years 2003–2007. Results show that the 2005 reform of the first pillar of the CAP actually had an impact in (re)orienting short‐term farm production choices but this response is largely heterogeneous and concentrated in the lower levels of support.

  December 29, 2016   doi: 10.1111/agec.12340   open full text
• Custom‐hired tractor services and returns to scale in smallholder agriculture: a production function approach.
  Hiroyuki Takeshima.
  Agricultural Economics. December 29, 2016
  Historically, agricultural transformation has often accompanied the increase in the returns to scale. Little direct evidence exists, however, on what actually causes such increase, despite the knowledge of many factors that are associated with this increase. We fill this knowledge gap by testing whether hiring in tractor services has raised returns to scale in agriculture at the household level in Nepal Terai that has undergone rapid growth in the tractor use through custom‐hiring services. Using Switching Regression and Inverse‐Probability‐Weighted Generalized Method of Moments, we address two sources of endogeneity involved with the estimation of returns to scale; (1) farmers’ self‐selection on whether to hire in tractor services and (2) use of inputs in the production function. For both Cobb‐Douglas and Translog production function specifications, we find that hiring in tractor services significantly increased the returns to scale in agricultural production by about 0.2 ∼ 0.3 among farm households not owning tractors, for which suitable control groups are found. Findings are robust under various alternative specifications.

  December 29, 2016   doi: 10.1111/agec.12339   open full text
• Cocoa pricing options and their implications for poverty and industrialization in Ghana.
  Francis M. Mulangu, Mario J. Miranda, Eugenie W.H. Maïga.
  Agricultural Economics. December 29, 2016
  This study establishes the cocoa pricing subsidization options that will stabilize processors’ throughput while meeting the multiple, but possibly conflicting, public policy objectives of maximizing government revenue and reducing poverty among Ghanaian cocoa beans producers. To evaluate these options, we construct and numerically simulate a structural dynamic stochastic model of a representative cocoa processor who maximizes the present value of current and expected future profits, given prevailing market conditions and cocoa pricing policies. Our results indicate that, given current processing capacity, the Ghana Cocoa Board would have to offer a 92% discount to processors on main‐crop beans in order to achieve the industrial goal of locally processing 40% of annual production. This would cause light‐crop beans used in processing to be completely displaced by main‐crop beans carried over as inventory. It would also increase mean processor revenues by 167%, but cause the Ghana Cocoa Board to operate at a significant deficit, implying that the stated goal could only be achieved through massive government subsidies.

  December 29, 2016   doi: 10.1111/agec.12349   open full text
• Agricultural production and children's diets: evidence from rural Ethiopia.
  Kalle Hirvonen, John Hoddinott.
  Agricultural Economics. December 29, 2016
  We study the relationship between pre‐school children's food consumption and household agricultural production. Using a large household survey from rural Ethiopia, we find that increasing household production diversity leads to considerable improvements in children's dietary diversity. However, we also document how this nonseparability of consumption and production does not hold for households that have access to food markets. These findings imply that nutrition‐sensitive agricultural interventions that push for market integration are likely to be more effective in reducing under‐nutrition than those promoting production diversity.

  December 29, 2016   doi: 10.1111/agec.12348   open full text
• Erosion mitigation in the Waikato District, New Zealand: economic implications for agriculture.
  Mario Andres Fernandez, Adam Daigneault.
  Agricultural Economics. December 27, 2016
  Soil erosion, in its various forms, is caused or aggravated by agricultural activities. Mitigation of surface erosion comprises the construction of shelterbelts, fencing, riparian buffering, and stock reduction. Mitigation of mass‐movement erosion, in turn, takes the form of spaced planting of trees to maintain a persistent, healthy, and complete ground cover. In this article, we assess the economic implications to agriculture of the adoption of mitigation alternatives for erosion control in the Waikato District, New Zealand. The Waikato District presents a spatial pattern of erosion that affects profitability of dairy, and sheep and beef enterprises. We use the Universal Soil Loss Equation and the New Zealand Empirical Erosion Model to estimate erosion figures that are then fed into an economic‐focused, nonlinear, partial equilibrium mathematical programming model of New Zealand land use. Different scenarios are constructed for surface and mass‐movement soil erosion targets ranging from 0% to 50% below baseline levels. We find that achieving surface erosion targets is more expensive than mass‐movement targets, and results in different responses in regional‐level costs, land use, enterprise net revenue, and adoption of mitigation alternatives.

  December 27, 2016   doi: 10.1111/agec.12338   open full text
• Revisiting the determinants of futures contracts success: the role of market participants.
  Anton Bekkerman, Hernan A. Tejeda.
  Agricultural Economics. December 18, 2016
  The Chicago Mercantile Exchange introduced a futures contract for distillers’ dried grains (DDGs) in early 2010, but the market became inactive only four months after its inception. While many new futures contracts do not develop into high‐volume traders, interest from DDG cash market participants indicated that this contract could be successful. Prompted by the unexpected lack of trading activity in this new futures market, we empirically revisit the question of what factors contribute to a futures contract's success and extend the literature by investigating the roles of market participants and the significance of supporting futures markets. Estimation results indicate that the market participant type—hedger or speculator—affects futures contract trade volume. More importantly, we find that the viability of new futures contracts for commodities that are jointly produced with other commodities is impacted by hedgers’ trade volume of the related futures contract. These results provide important additions into the portfolio of indicators used by commodity exchanges to more cost‐effectively evaluate new futures contract products.

  December 18, 2016   doi: 10.1111/agec.12324   open full text
• Is late really better than never? The farmer welfare effects of pineapple adoption in Ghana.
  Aurélie P. Harou, Thomas F. Walker, Christopher B. Barrett.
  Agricultural Economics. December 06, 2016
  Export agriculture offers potentially high returns to smallholder farmers in developing countries, but also carries substantial market risk. In this article we examine the intertemporal welfare impact of the timing of a farmer's entry into the export pineapple market in southern Ghana. We examine whether farmers who never cultivated pineapple are better or worse off than farmers who decided to adopt pineapple earlier or later relative to their peers and experienced a significant adverse market shock several years prior to our endline survey. We use a two‐stage least squares model to estimate the causal effect of duration of pineapple farming on farmer welfare. Consistent with economic theory, we find that earlier adoption of the new crop brings greater welfare gains than does later uptake. But we find that the gains to later uptake of pineapple—just before the market shock—are small in magnitude, just 0.1 standard deviations of a comprehensive asset index, indicating that the gains to adoption may be precarious and depend on the context, in particular on the severity of prospective market shocks.

  December 06, 2016   doi: 10.1111/agec.12322   open full text
• Quota prices as indicators of comparative advantage in supply‐managed industries.
  Predrag Rajsic, Glenn Fox.
  Agricultural Economics. December 06, 2016
  The Canadian dairy, egg, broiler, and turkey industries operate under supply management, a policy regime that sets product prices and allocates production among provinces and ultimately among farms through quotas. The Canadian Farm Products Agencies Act requires that comparative advantage be used to guide the allocation of new quota when increases in consumer demand necessitate increased production. This requirement, however, has not been met in practice. We develop a proposal by Meilke to use quota prices as measures of comparative advantage. We evaluate the quota price approach and other proposed methods, from a Hayekian and Coasean market process perspective. We conclude that quota prices offer an economically justifiable indicator of provincial comparative advantage. We develop an individual‐level general equilibrium model of quota exchange to illustrate the informational content of quota prices as indicators of comparative advantage. We also discuss potential practical challenges of using quota prices as indicators of comparative advantage.

  December 06, 2016   doi: 10.1111/agec.12323   open full text
• Are local market relationships undermining organic fruit and vegetable certification? A bivariate probit analysis.
  Ariana P. Torres, Maria I. Marshall, Corinne E. Alexander, Michael S. Delgado.
  Agricultural Economics. December 06, 2016
  This article investigates how an organic fruit and vegetable farmer's choice to use direct‐to‐consumer market channels impacts his/her decision to be certified organic. First, we model the decision to be certified organic as a conditionally independent decision from the farmer's chosen market channels. Second, we estimate the probability of certifying organic as an endogenously determined marketing decision to the choice of market channels, and use a bivariate probit specification to model this decision. Empirical evidence indicates that the decision to certify is endogenous to the chosen market channels. We show that farmers selling direct to consumers are less likely to certify organic.

  December 06, 2016   doi: 10.1111/agec.12326   open full text
• Wheat variety yield data: Do commercial and public performance tests provide the same information?
  Frank Kyekyeku Nti, Andrew Barkley.
  Agricultural Economics. December 06, 2016
  Wheat yields from reported performance test results are of economic importance to wheat producers, since their profits depend on selecting the optimal variety for their location. However, our data shows differences in absolute and relative wheat yields between commercial and public wheat breeding program's performance test data in Kansas. Newly available data are used to test if the difference in yields arose from potential selectivity bias, and to determine the contribution of private and public wheat breeding programs to varietal yield improvement during 2007–2012. Both Heckman selection models and multiple regression showed no statistical evidence of the potential presence of selectivity bias rather, managerial practices, agronomic conditions, field location, and inherent genetic traits of the seed variety were identify as the source of yield differences.

  December 06, 2016   doi: 10.1111/agec.12333   open full text
• Improving the speed of adoption of agricultural technologies and farm performance through farmer groups: evidence from the Great Lakes region of Africa.
  John Herbert Ainembabazi, Piet Asten, Bernard Vanlauwe, Emily Ouma, Guy Blomme, Eliud Abucheli Birachi, Paul Martin Dontsop Nguezet, Djana Babatima Mignouna, Victor M. Manyong.
  Agricultural Economics. December 02, 2016
  The article examines the effect of membership in farmer groups (MFG) on adoption lag of agricultural technologies and farm performance in Burundi, the Democratic Republic of Congo and Rwanda. We use duration and stochastic production frontier models on farm household data. We find that the longer the duration of MFG, the shorter the adoption lag and much more so if combined with extension service delivery. Farmer groups function as an important mechanism for improving farm productivity through reduced technical inefficiency in input use. We discuss policy implications under which farmer groups are a useful channel to reduce adoption lag, and the means through which improved farm performance can be achieved.

  December 02, 2016   doi: 10.1111/agec.12329   open full text
• Effect of off‐farm income on smallholder commercialization: panel evidence from rural households in Ethiopia.
  Tesfaye Woldeyohanes, Thomas Heckelei, Yves Surry.
  Agricultural Economics. December 01, 2016
  This article investigates how off‐farm income affects crop output market participation decisions and marketed surplus of smallholder farmers in Ethiopia. A double‐hurdle model is estimated using three waves of panel data from the Ethiopian Rural Household Survey. Unobserved heterogeneity is controlled for using a correlated random effect procedure and potential endogeneity of explanatory variables using a control function approach. The results show that off‐farm income has no significant influence on household crop output market participation. However, conditional on market participation, additional off‐farm earnings negatively affect the marketed surplus. This indicates that farmers use off‐farm earnings for consumption rather than for investment in agricultural production. Policy measures that promote rural investment may help increase returns to labor for land‐poor households participating in off‐farm work in the process of agricultural commercialization.

  December 01, 2016   doi: 10.1111/agec.12327   open full text
• Asset‐based poverty transition and persistence in rural China.
  Jing You.
  Agricultural Economics. December 01, 2016
  This article tests empirically for transition and persistence of poverty in rural China based on the theory of asset‐based poverty traps. It proposes an analytical framework mitigating the problem of endogenous switching between accumulation regimes and disentangling the true state‐dependence of poverty. Specifically, a dynamic asset threshold separating households into downward and upward mobility regimes is identified after taking households’ unobserved characteristics and observed regime‐differentiated accumulation strategies into account. The static analysis identifies causality running from settling into a downward mobility regime to the probability of poverty measured by consumption. Furthermore, allowing for endogenous initial poverty status, the dynamic analysis finds strong true state‐dependence in poverty. Households with the same characteristics are nearly twice as likely to be poor as if they had not previously switched to the accumulation regime. Assets below the dynamic threshold serve as a conduit through which poverty propagates itself. Factors that help to break this vicious circle are identified.

  December 01, 2016   doi: 10.1111/agec.12328   open full text
• The importance of the savings device in precautionary savings: Empirical evidence from rural Bangladesh.
  Jeffrey D. Michler, Joseph V. Balagtas.
  Agricultural Economics. November 30, 2016
  We test if precautionary behavior in the consumption decisions of rural households differs across the forms of savings. Using monthly panel data from Bangladesh, we find that, on average, the savings device does not matter but that the effect of income on savings indeed depends on the savings device. Precautionary savings in the form of staple grain are relatively constant across income quartiles, while nongrain precautionary savings vary across income quartiles. Previous studies, which treat these two types of savings devices as fungible, misdiagnose the reasons for, and by extension the market failures behind, a large percentage of the precautionary savings held by rural households.

  November 30, 2016   doi: 10.1111/agec.12320   open full text
• Monetary policy shocks and the dynamics of agricultural commodity prices: evidence from structural and factor‐augmented VAR analyses.
  Md Rafayet Alam, Scott Gilbert.
  Agricultural Economics. November 08, 2016
  Fluctuation in commodity prices is a significant and timely issue to be studied. This study is to examine the impact of monetary policy and other macroeconomic shocks on the dynamics of agricultural commodity prices. The major contributions of this study are twofold. First, unlike other studies that use indexes, this study analyzes the commodities individually, affording the inclusion of commodity‐specific fundamentals such as the level of inventory—an important determinant of commodity price—in a structural VAR framework. Second, it exploits a rich data set of agricultural commodity prices which includes commodities that are usually overlooked in the literature, and extracts a common factor using the dynamic factor model to understand the extent of comovement of the prices and to gauge the extent to which macroeconomic shocks drive the “comovement” in a factor‐augmented VAR (FAVAR) framework. The findings show that monetary policy, global economic conditions, and the U.S. dollar exchange rates play an important role in the dynamics of agricultural commodity prices.

  November 08, 2016   doi: 10.1111/agec.12291   open full text
• Using a functional approach to test trending volatility in the price of Mexican and international agricultural products.
  Santiago Guerrero, Gerardo Hernández‐del‐Valle, Miriam Juárez‐Torres.
  Agricultural Economics. November 03, 2016
  In this article, we extend the traditional GARCH(1,1) model by including a functional trend term in the conditional volatility of a time series. We derive the main properties of the model and apply it to all agricultural commodities in the Mexican CPI basket, as well as to the international prices of maize, wheat, swine, poultry, and beef products for three different time periods that implied changes in price regulations and behavior: before the North American Free Trade Agreement (NAFTA; 1987–1993), post‐NAFTA (1994–2005), and commodity supercycle (2006–2014). The proposed model seems to adequately fit the volatility process and, according to heteroscedasticity tests, also outperforms the ARCH(1) and GARCH(1,1) models, some of the most popular approaches used in the literature to analyze price volatility. Our results show that, consistent with anecdotal evidence, price volatility trends increased from the period 1987–1993 to 1994–2005. From 1994–2005 to 2006–2014, trends decreased but the persistence of volatility increased for most products, especially for international commodities. In addition, we identify some agricultural products such as avocado, beans, and chicken that, due to their increasing price volatility trends in the 2006–2014 period, may present a risk for food inflation in the short run.

  November 03, 2016   doi: 10.1111/agec.12290   open full text
• Occupational diversification as an adaptation to rainfall variability in rural India.
  Emmanuel Skoufias, Sushenjit Bandyopadhyay, Sergio Olivieri.
  Agricultural Economics. October 14, 2016
  Occupational diversification among household members in rural India is investigated as an adaptation strategy against the risks arising from the variability of local rainfall. Nationally representative household‐level survey data are combined with the coefficient of variation of rainfall constructed based on historical rainfall data at the district level. The analysis finds that high rainfall variability has significant negative effects on the agricultural specialization of within‐household occupational choices. This result is reinforced by the finding that improved access to irrigation, education, credit, roads, and postal services, is associated with a lower occupational diversification within families and a greater specialization of household members in agricultural‐related employment.

  October 14, 2016   doi: 10.1111/agec.12296   open full text
• Factors explaining the low and variable profitability of fertilizer application to maize in Zambia.
  William J. Burke, Thom. S. Jayne, J. Roy Black.
  Agricultural Economics. October 11, 2016
  It is widely recognized that an “African green revolution” will require greater use of inorganic fertilizers. Often‐made comparisons note that fertilizer use rates in Africa are just 10–20% of those in Asia, Europe and the Americas. Most attempts to explain relatively low‐adoption of fertilizer assume yield responses to inorganic fertilization warrant higher application rates and hypothesize that observed use rates are limited by market‐based factors. Another explanation may be that application rates are low because African yields are less responsive to inorganic fertilizer than yields in other regions, and less responsive than analysts perceive. Examining the case of Zambia, we evaluate whether yield response to fertilizers could explain adoption and application rates. A model of yield response is constructed and a combination of estimators is employed to mitigate potential biases related to correlation between fertilizer use and unobserved heterogeneity as well as stochastic shocks. Results indicate higher fertilization rates would be marginally profitable or unprofitable in many cases given commercial fertilizer and maize prices. Phosphoric fertilizer is particularly unprofitable on acidic soils, which are common in Zambia and other areas of sub‐Saharan Africa. We propose feasible recommendations for diversifying the current government strategy to enhance crop productivity.

  October 11, 2016   doi: 10.1111/agec.12299   open full text
• An evaluation of extension services in Sweden.
  Martin Nordin, Sören Höjgård.
  Agricultural Economics. October 11, 2016
  This article analyzes the effects of extension services regarding the use of nutrients in Swedish agriculture on nutrient balances and farms’ finances. The key to our research design is that extension visits vary between agents (some agents give more consultation than others), which leads to random variation in “treatment.” We find that the service affects nutrient utilization, which possibly reduces leakages and eutrophication in the Baltic Sea. A large and positive impact on farms value added implies that the net benefit from the extension services is positive. The improvements are mainly due to better land management practices so that more efficient use of fertilizers increases crop production and thereby decreases the nitrogen balance.

  October 11, 2016   doi: 10.1111/agec.12294   open full text
• Estimating the environmental effects and recreational benefits of cultivated flower land for environmental quality improvement in Taiwan.
  Chin‐Huang Huang.
  Agricultural Economics. October 10, 2016
  The main purpose of this study is to measure environmental effects and recreational benefits under different hypothetical scenarios program, involving quality improvement in Tien‐Wei Highway Garden, which is the biggest cultivated flower land in Taiwan. The contingent behavior model was adopted. The data combined actual number of trips under current quality of environment combined and the intended number of trips for expected scenarios of environmental quality improvement and congestion mitigation. For the empirical model, on‐site Poisson model was performed to correct truncated and endogenous stratification issues from on‐site surveys. The results show that the estimated average consumer surplus is greater in contingent behavior method than the one in the traditional travel cost model. Also, the estimated recreational benefits in contingent behavior method are more precise than those in the traditional travel cost method. The environment benefits to consumers are communicated with the programs that changes in environment quality. Meanwhile, the incremental economic benefits comprise the gain associated with the improvement of environmental quality.

  October 10, 2016   doi: 10.1111/agec.12292   open full text
• Internal and contextual drivers of dairy restructuring: evidence from French mountainous areas and post‐quota prospects.
  Marie Dervillé, Gilles Allaire, Élise Maigné, Éric Cahuzac.
  Agricultural Economics. October 10, 2016
  The end of the milk quota system in Europe has resulted in substantial structural changes to the dairy industry, calling its future into question, especially in mountainous areas. This study analyzes the internal and contextual factors that influence dairy restructuring in French mountainous areas. Three complementary logit models are used to specify farmer decisions (e.g., dairy production exit, stability, and growth). Original and exhaustive geo‐located administrative datasets are combined to create a farm longitudinal dataset and characterize farm‐restructuring patterns on a fine geographical scale. Farm size, corporate legal status, and specialization are positively associated with farm growth. Viable diversification strategies through either farm processing or agro‐environmental scheme contracting are also highlighted. Farm sustainability is supported by the economic success of the local industry and the propensity to adopt extensive practices. With respect to public policy, dairy policy appears to have the strongest impact. Thus, the liberalization of dairy policy threatens the future of dairy farming, particularly in areas with low milk density and no production under labels. This work calls for a policy that promotes the collective dimension of dairy farm performance. The current rural development policy alone may be insufficient to support farms’ long‐term sustainability.

  October 10, 2016   doi: 10.1111/agec.12297   open full text
• Self‐protection from weather risk using improved maize varieties or off‐farm income and the propensity for insurance.
  Sebastain N. Awondo, Octavio A. Ramirez, Gregory J. Colson, Esendugue G. Fonsah, Genti Kostandini.
  Agricultural Economics. October 10, 2016
  We investigate how self‐protection from the adoption of Improved Maize Varieties (IMV) and off‐farm income affects risk premiums for smallholder maize producers in Uganda. To unbundle these effects, we specify the cost of risk to explicitly capture four risk components—mean, variance, skewness, and kurtosis. Using unique plot‐level panel data for Uganda, we estimate and test moments of a flexible production function based on an expanded form of the Johnson SU family distribution and proceed to simulate the degree of responsiveness of risk premiums and welfare estimates to marginal changes in the share of land under IMV and off‐farm income. Scenarios of joint adoption of IMV accompanied with low and high application of inorganic fertilizer, and the effect of off‐farm income when there is high and low supply of farm labor are examined. Results show that the use of IMV and off‐farm income substantially reduces risk premiums and the individual effect is much higher under low fertilizer application and high supply of farm labor, respectively. Thus implying that self‐protection is likely to reduce the propensity for index insurance especially if its design fails to consider the reduction in downside risk.

  October 10, 2016   doi: 10.1111/agec.12295   open full text
• Cotton farmers’ willingness to pay for pest management services in northern Benin.
  Cokou Patrice Kpadé, Edouard Roméo Mensah, Michel Fok, Jupiter Ndjeunga.
  Agricultural Economics. October 10, 2016
  This study was carried out to assess cotton farmers’ willingness to pay (WTP) for pest management services in northern Benin. Targeted staggered control (TSC) has been introduced to reduce pesticide use in cotton cropping and generate an estimated benefit of FCFA48,800 (€74.40) per cotton hectare accruing from increased productivity and reduced pesticide cost. However, TSC application requires extra time for pest identification and scouting, and its adoption remains low due to the lack of funding to boost farmers’ awareness and cover training costs. An interval regression model was used to analyze responses to a double‐bounded contingent valuation survey with data collected from 300 cotton farmers. The results showed that 87.3% of cotton farmers were willing to pay for TSC services. Annual WTP per cotton hectare was estimated at FCFA16,962 (€25.80), revealing an existing demand for TSC adoption. Respondents' WTP was driven by farm and socio‐economic characteristics. Financial mechanisms managed by farmers could thus potentially foster technology adoption, and in turn, generate economic and environmental benefits.

  October 10, 2016   doi: 10.1111/agec.12298   open full text
• Risk attitudes and the structure of decision‐making: evidence from the Illinois hog industry.
  Jason R.V. Franken, Joost M.E. Pennings, Philip Garcia.
  Agricultural Economics. October 04, 2016
  Research offers mixed evidence about the risk management decision‐making process of producers. Whether producers’ characteristics drive behavior directly or through risk attitude remains a puzzle. We assess whether managerial/firm characteristics directly affect choices or if their influence occurs indirectly through impacts on risk attitude. The findings, which support indirect effects, indicate that failure to represent relationships between risk attitude, other characteristics, and behavior appropriately can mask the effect of risk attitude. A more complete understanding of the structure of decision‐making may assist economists, policymakers, and industry stakeholders in designing and targeting mechanisms to manage or transfer risk.

  October 04, 2016   doi: 10.1111/agec.12293   open full text
• Formation and adaptation of reference prices in grain marketing: an experimental study.
  Fabio L. Mattos, Jamie Zinn.
  Agricultural Economics. September 01, 2016
  This study aimed to explore how producers’ reference prices are formed and adapt over time, and how they affect marketing decisions. Results indicate that producers focus on three major variables to form their reference prices: the current market price, the highest price to date, and their expectation about price behavior. Further, they update their reference prices during the marketing season mainly in response to changes in current market prices, their own expectations about price behavior, and the general price trend. Finally, our findings suggest that producers’ marketing decisions are based on the spread between current market price and reference price, the general market trend and price expectation.

  September 01, 2016   doi: 10.1111/agec.12260   open full text
• Out‐of‐sample testing price discovery in commodity markets: the case of soybeans.
  Hildegart Ahumada, Magdalena Cornejo.
  Agricultural Economics. August 29, 2016
  Price discovery, a central function of futures markets, has been usually tested in‐sample by studying the common stochastic trend between spot and futures prices. Instead, to evaluate futures as anticipatory prices, we develop a forecast approach to out‐of‐sample test price discovery in a multivariate framework. We apply it to the soybeans market. Results indicate futures prices as the best available “predictors” of future spot prices, although this finding holds only on average and for certain periods, other models show forecasting gains.

  August 29, 2016   doi: 10.1111/agec.12267   open full text
• The political economy of agriculture for development today: the “small versus large” scale debate revisited.
  Jochen Dürr.
  Agricultural Economics. August 26, 2016
  The role of agriculture in economic development and the development politics of promoting smallholder versus large‐scale agriculture have both been at the center of a long‐lasting and controversial debate. Using an innovative methodology which combines a value chain approach with input‐output‐analysis, the growth multipliers and productivity of both farm types in Guatemala are analyzed. Results show that smallholder agriculture has the same potential to stimulate output growth as large‐scale agriculture. Smallholder value chains include mainly informal sectors and create more jobs than commercial agriculture. Therefore, a reorientation of agricultural and land policies toward small‐scale food producers and within a comprehensive policy of integrated rural development is not only necessary in terms of social equity but also for boosting economic development.

  August 26, 2016   doi: 10.1111/agec.12264   open full text
• Do rice prices follow a random walk? Evidence from Markov switching unit root tests for Asian markets.
  Harold Glenn A. Valera, Jim Lee.
  Agricultural Economics. August 24, 2016
  This study revisits the issue of mean reversion in the import rice prices of six Asian countries over the period between 1995 and 2015. Augmented Dickey Fuller tests with a conventional linear regression model support the presence of a unit root in the levels of the price data. However, when regressions allow for Markov switching in coefficients and variances to capture periodic shifts in levels and volatilities, there is strong evidence against the unit‐root null hypothesis in favor of stationarity over much of the observation period.

  August 24, 2016   doi: 10.1111/agec.12265   open full text
• Impact of conservation agriculture technology on household welfare in Zambia.
  Abdul Nafeo Abdulai.
  Agricultural Economics. August 24, 2016
  This article examines the determinants and impact of conservation agriculture (CA) technology adoption on farm household welfare in Zambia. To account for selection bias from both observable and unobservable factors, an endogenous switching regression model is employed to estimate the impact of the technology on continuous outcomes like farm output, throughput accounting ratio (TAR), poverty gap, and severity of poverty. A recursive bivariate probit model is however used for the estimation of impact of adoption on a binary outcome like poverty headcount. The empirical findings demonstrate that the adoption of CA technology increases maize output, and farm TAR and reduces household poverty. Moreover, the results reveal that farmers’ years of schooling, social networks, access to credit, extension services, and machinery as well as soil quality positively influence adoption of CA technology.

  August 24, 2016   doi: 10.1111/agec.12269   open full text
• Exploring the widening food gap: an international perspective.
  Jakob B. Madsen, Md. Rabiul Islam.
  Agricultural Economics. August 23, 2016
  Using data for a long panel of 90 developed and developing countries, this article explores the effects of research and development (R&D) and fixed capital stock on agricultural land productivity over the period 1961–2012. Instruments are used for R&D to deal with feedback effects and measurement errors. The results show very high social returns to investment in R&D and to fixed capital stock, suggesting that increasing investment in these factors are promising ways of arresting the increasing food prices due to increasing demand for animal protein, population growth, desertification, salinization, soil erosion, climate change, and decreasing growth in land productivity.

  August 23, 2016   doi: 10.1111/agec.12262   open full text
• Disaggregated trade and disaggregated currency unions: a ranking of common currency effects.
  Gregory W. Whitten.
  Agricultural Economics. August 22, 2016
  Andrew Rose has long argued that a common currency has a large effect on increasing trade. Recently, Rose has called into question the reliability of this conclusion, as new techniques have emerged for estimating gravity equations. This article uses the sector‐specific gravity model developed by Anderson and Yotov (2010a) to investigate if disaggregated trade can provide a reliable estimate of a common currency's effect. Disaggregating trade alone is insufficient to obtain a reliable estimate of a currency union, regardless of econometric technique, when the effect of a common currency on trade is uniform across all unions. Disaggregating the universe of currency unions with individual effects provides a reliable ranking of currency unions, independent of estimation method, by the effect that each union's currency has on increasing trade. These rankings differ across sectors.

  August 22, 2016   doi: 10.1111/agec.12263   open full text
• Primary and secondary pest management in agriculture: balancing pesticides and natural enemies in potato production.
  Lianxin Yang, Levan Elbakidze, Thomas Marsh, Christopher McIntosh.
  Agricultural Economics. August 19, 2016
  Natural enemies (NEs) provide an important ecosystem service by preying on variety of pests in agricultural crop production systems. Current management practices of both primary and secondary pests in agricultural production principally rely on the use of pesticides with associated negative social and environmental consequences/externalities. Excessive use of pesticides against primary pets can remove NEs from the agro‐ecosystem and amplify susceptibility of the system to outbreaks of secondary pests. The combined effect of NEs on primary and secondary pests has received limited attention. This study uses an intraseasonal bioeconomic model to explicitly take into account biological interactions among primary pests, secondary pests, and NEs assuming decision makers’ profit maximizing behavior. The model explicitly captures the opportunity cost of injury to NE in terms of both primary and secondary pest suppression by NE. The results show that in the context of the green peach aphid (primary pest) and two‐spotted spider mite (secondary pest) in potato production, inclusion of NE into pest mitigation strategy can increase returns by 2%.

  August 19, 2016   doi: 10.1111/agec.12259   open full text
• Demand for improved fish feed in the presence of a subsidy: a double hurdle application in Kenya.
  Akuffo Amankwah, Kwamena K. Quagrainie, Paul V. Preckel.
  Agricultural Economics. August 19, 2016
  Fish farming households’ demand for improved fish feed from the private market in Kenya is potentially influenced by the government's feed subsidy program. This article applies the double‐hurdle model to a cross‐section of fish farms to analyze demand for improved fish feed from private markets, and whether the government feed subsidy program has an effect on private demand for improved feed. The results indicate that households’ decisions to participate in the improved feed market are affected by the quantity of improved feed received from the government. Once the participation decision has been made, we find evidence of crowding‐in of the private improved feed sector; that is, the government's allocations of subsidized feed appear to increase private sector demand. In addition, the price of improved feed negatively affects the quantity purchased as expected. Education, extension contacts, and ease of marketing matured fish increase household propensity to purchase improved feed commercially. Policies that help reduce the price of improved feed such as reduction in tariffs on imported feeds and feed ingredients will foster demand for the feed, as will policies that facilitate marketing of fish at reasonable prices by households.

  August 19, 2016   doi: 10.1111/agec.12261   open full text
• Consumer preferences for organic production methods and origin promotions on ornamental plants: evidence from eye‐tracking experiments.
  Alicia Rihn, Hayk Khachatryan, Benjamin Campbell, Charles Hall, Bridget Behe.
  Agricultural Economics. August 18, 2016
  The strategic value of organic production and origin promotions may vary based on product end‐use. Conjoint analysis and eye‐tracking technology were used to investigate consumers’ purchase likelihood (PL) and visual search behavior for esthetic and food‐producing ornamental plants. Organic production methods, in‐state, and domestic origins positively impacted participants’ PL. Respondents’ visual attention to the organic production attribute had a strong positive effect on PL for food‐producing plants as did sociodemographic variables. Findings imply that producers and retailers could successfully implement signage emphasizing organic production methods and origin designations to generate consumer interest.

  August 18, 2016   doi: 10.1111/agec.12258   open full text
• Farmer's willingness to participate in wetland restoration: a hurdle model approach.
  Xuan Wei, Zhengfei Guan, Honggen Zhu.
  Agricultural Economics. August 17, 2016
  Due to a severe degradation of the wetland ecosystem in China, great efforts have been devoted to promote farmers’ willingness to participate in wetland restoration. As the decision‐making body, farmer's willingness to participate is critical to wetland restoration. It is thus important to understand factors that will affect farmers’ willingness to participate and their levels of participation. Using a survey sample of 1,009 farmers from the Poyang Lake wetland area in China, this article applies a hurdle model to empirically investigate the factors affecting individual farmers’ sequential decisions on whether or not to participate and how much land to enroll in wetland restoration. Results suggest that farmers’ information and knowledge about wetland restoration compensation policy is crucial in determining whether or not to participate in the first stage. Meanwhile, individual farmer characteristics and household attributes play different roles in influencing farmers’ participation decisions and acreage enrollment decisions. This study provides useful insights to identify effective policy instruments to motivate participation and ensure success of such policies.

  August 17, 2016   doi: 10.1111/agec.12268   open full text
• Enhancing food security in South Sudan: the role of markets and regional trade.
  Paul A. Dorosh, Shahidur Rashid, Joanna Asselt.
  Agricultural Economics. August 14, 2016
  South Sudan faces serious problems of food insecurity due to low levels of domestic food production, periodic droughts, widespread poverty, and since late 2013, renewed armed conflict. This article explores market price behavior using cointegration analysis and estimates the effects of production and trade shocks through multimarket model simulations. We show that market prices in the capital city, Juba, of both maize and sorghum are cointegrated with import parity prices of these cereals sourced from Uganda, consistent with observed trade flows. Model simulations, using econometrically estimated demand parameters, suggest that private sector imports of maize and wheat would greatly mitigate the potential fall in consumption in the case of a decline in domestic cereal production. Other simulations indicate that if total imports of cereals are reduced by one‐third (still more than two times the levels of food aid in 2013) because of disruptions to private market flows, domestic prices of cereals could rise by 45% or more. The article concludes that whatever measures are taken involving national food security reserves, it is crucial that government policy serves to maintain incentives for private sector imports to avoid destabilizing market supplies, domestic prices, and ultimately, food consumption of the poor.

  August 14, 2016   doi: 10.1111/agec.12266   open full text
• Pricing a rural development program: uncertainty, indifference, and protest behaviors.
  Marcos Domínguez‐Torreiro, Mario Soliño.
  Agricultural Economics. July 14, 2016
  This article presents an econometric approach to modeling uncertainty, unwillingness to pay, and protest behavior in contingent valuation studies. For that purpose, a mixture model with sample selection is developed for a multiple‐bounded uncertainty elicitation format. The proposed theoretical framework is applied to evaluate the social welfare impact of implementing a sustainable rural development program. Results show that a “naive” analytical approach that excludes protesters from the analysis would result in significantly higher willingness to pay estimates for those individuals who favor the implementation of the program and agree to reveal their true reservation prices.

  July 14, 2016   doi: 10.1111/agec.12255   open full text
• Vertical coordination and farm performance: evidence from the catfish sector in Vietnam.
  Neda Trifković.
  Agricultural Economics. July 12, 2016
  Using an original dataset from the Vietnamese catfish sector, I analyze the impact of vertical coordination options, namely, contract farming and vertical integration, on farm performance, which is measured in terms of yields and revenue per hectare. The effects of vertical coordination are estimated using a maximum simulated likelihood estimator and a two‐stage least square regression with instrumental variables to account for endogenous farm and household characteristics and selection on unobservable characteristics. The results show that vertically integrated farms have substantially higher yields and revenue per hectare than nonintegrated farms. The levels of gains that can be attributed to integration are large and consistent under different estimation procedures, and there is no difference between nonintegrated and contract farms in terms of farm performance.

  July 12, 2016   doi: 10.1111/agec.12254   open full text
• What drives stock market integration? An analysis using agribusiness stocks.
  Rodrigo Valdes, Stephan Cramon‐Taubadel, Alejandra Engler.
  Agricultural Economics. July 12, 2016
  This article explores the drivers of regional stock market integration with a focus on the agribusiness sector across relevant regional trade blocs around the world. We implement panel cointegration models to analyze the stock indices of agribusiness firms in the Southern Common Market (MERCOSUR), European Union (EU), Asia‐Pacific Economic Cooperation (APEC), and North American Free Trade Agreement (NAFTA). Based on the literature on market integration and stock return pricing, we identify nine possible determinants of stock market integration, which we separate into three categories: individual market performance, macroeconomic conditions, and agricultural trade. In our analysis, we account for agriculture‐specific factors to control for possible structural shifts in financial markets regimes by including the two main commodity price bubbles during last 20 years. Our results show that most of the variables included in our categories have been important factors in promoting regional stock market integration. Moreover, integration among regional stock markets was strengthened by the implementation of trade agreements. This effect is stronger in trade blocs with fewer members, such as NAFTA and MERCOSUR, compared with larger and more heterogeneous blocs, such as the EU and APEC.

  July 12, 2016   doi: 10.1111/agec.12256   open full text
• Using an economic experiment to estimate willingness‐to‐pay for a new maternal nutrient supplement in Ghana.
  Katherine P. Adams, Travis J. Lybbert, Stephen A. Vosti, Emmanuel Ayifah.
  Agricultural Economics. July 12, 2016
  Scaling up access to supplements designed to prevent undernutrition, such as new small‐quantity lipid‐based nutrient supplements (SQ‐LNS), may require distribution via both public channels and retail markets. The viability of SQ‐LNS retail markets will hinge on household‐level demand. We use an economic experiment to characterize initial willingness‐to‐pay (WTP) for a maternal SQ‐LNS product in Ghana. WTP is positive for most participants, though below the estimated cost of production for many. WTP varies depending on income, assets, and parity status. These findings have implications for the design of public health policy and hybrid public–private delivery mechanisms.

  July 12, 2016   doi: 10.1111/agec.12257   open full text
• Technical efficiency, herd size, and exit intentions in U.S. dairy farms.
  Fengxia Dong, David A. Hennessy, Helen H. Jensen, Richard J. Volpe.
  Agricultural Economics. July 11, 2016
  The U.S. dairy industry has seen major restructuring in recent decades. A sharp decline in the number of U.S. dairy farms and an increase in average herd sizes have accompanied exits, which have been concentrated among smaller herds. Given that more productive farms are better positioned to increase operation size and to continue operation, we hypothesize that the more technically efficient farms are better able to expand and also have stronger incentives to continue production. Using data from the USDA's 2010 ARMS Phase III, Dairy Production Practices and Costs and Returns Report, we estimate technical efficiency using stochastic production frontier analysis with endogenous inputs. The efficiency estimate is then incorporated into the analysis of exit intention and herd size. The results confirm our hypotheses that smaller and less efficient farms are more likely to exit and that more efficient dairy farms tend to expand herd size. Moreover, farms without successors but with older and more educated operators are more likely to exit.

  July 11, 2016   doi: 10.1111/agec.12253   open full text
• Resource saving and productivity enhancing impacts of crop management innovation packages in Ethiopia.
  Moti Jaleta, Menale Kassie, Kindie Tesfaye, Tilaye Teklewold, Pradyot Ranjan Jena, Paswel Marenya, Olaf Erenstein.
  Agricultural Economics. July 08, 2016
  Crop management innovations are often not discrete fixed stand‐alone options—and their adoption may imply various combinations and adaptations. This potentially confounds their impact assessment. This article assesses the resource saving and productivity enhancing impacts of a crop management package revolving around minimum tillage in maize‐based farming systems in northwest Ethiopia. An endogenous switching regression model was applied to plot‐ and household‐level survey data collected from 290 rural households operating 590 maize plots during the 2012 production year. Controlling for variations in plot and household characteristics, the average effect of minimum tillage package (minimum tillage package) on maize productivity is 0.44 t/ha. Compared to conventional practice (CP), adoption of the MTP decreased the average male and female labor use in maize production by 14.4 and 8.2 person‐days per ha, respectively. Similarly, MTP adoption decreased draft power use for land preparation by 13.2 pair of oxen‐days per ha. Compared to CP, in general, there is a considerable short‐run maize productivity gain and reduction in labor and draft power use under MTP.

  July 08, 2016   doi: 10.1111/agec.12251   open full text
• Agricultural price transmission elasticity: importance of controlling for unobserved common factors.
  Jagath Dissanayake.
  Agricultural Economics. July 08, 2016
  A voluminous amount of the literature estimates price transmission from world markets to domestic markets ignoring unobserved factors that commonly affect domestic markets. This article reevaluates the long‐run and short‐run transmission elasticity of world food price shocks to domestic markets using a “common factor framework” that takes unobserved common factors that are correlated with regressors into consideration. In the estimation, annual price data for rice, wheat, and maize for a panel of developed and developing countries that are observed over the period of 1960–2007 are used. The results from a common factor framework to those that do not account for common factors are then compared. Our findings suggest that ignorance of common factors is likely to result in upwardly biased elasticity estimates.

  July 08, 2016   doi: 10.1111/agec.12252   open full text
• Information processing strategies and framing effects in developing country choice experiments: results from rice farmers in India.
  David L. Ortega, Patrick S. Ward.
  Agricultural Economics. July 05, 2016
  This study explores the effect of various information processing strategies specifically related to attribute nonattendance in stated choice experiments. Our approach includes two forms of stated choice task nonattendance, each derived from separately framed questions asked immediately following the completion of each choice task. We also evaluate a measure of inferred serial nonattendance based on the posterior distributions of random coefficient estimates. We find that choice task nonattendance question framing statistically impacts marginal utility coefficients and, to a lesser degree, willingness‐to‐pay estimates. While direct questions addressing attribute attendance or nonattendance affect these estimates, inferred indicators of serial nonattendance suggest that many attributes are not likely ignored as often as respondents may indicate. Further research is needed to assess inferred versus stated approaches to modeling respondent information processing strategies.

  July 05, 2016   doi: 10.1111/agec.12249   open full text
• Farm share of the food dollar: an IO approach for the United States and Canada.
  Patrick Canning, Alfons Weersink, Jessica Kelly.
  Agricultural Economics. July 05, 2016
  This article develops a method for using input–output data to calculate a farm share estimate for all food rather than the typical approach of estimating a price spread for an individual product. The farm share of the food dollar is approximately 14% in the United States and 17% in Canada. The farm share increased somewhat during the commodity price boom but has generally fallen steadily by approximately 20% since 1997. While the farm share of expenditures on food for home consumption is approximately 22% across both countries, it is 4% in the United States and 7% in Canada for meals consumed away from home. The empirical framework can be extended to other countries given the extensive use of System of National Account data making international and temporal comparisons possible across farm and food marketing systems.

  July 05, 2016   doi: 10.1111/agec.12250   open full text
• Cattle sharing and rental contracts in an Agrarian economy: evidence from Ethiopia.
  Million A. Tadesse, Stein T. Holden, Ragnar A. Øygard, John McPeak.
  Agricultural Economics. July 04, 2016
  Empirical evidence on the role of cattle sharing and rental contracts in agrarian economies is limited. This article is an investigation of different types of cattle sharing and rental contracts producers in rural Ethiopia adopt. It also investigates why households in rural Ethiopia rely on these contracts that are vulnerable and therefore subject to potential moral hazard problems described in earlier literature. We apply random effect probit and control function econometric methods to household panel data collected in 2005 and 2007 from two agro‐ecological zones in Ethiopia. Controlling for the endogeneity of access to livestock credit, we find that contracts are spatially fragmented and better developed where population density is high and credit and insurance markets are poorly developed. We also find that contracts help cash poor and credit constrained households to improve their herd dynamics, to get access to nonlivestock resources (land, labor and cash) and share risks that could have been difficult without the contract. We show that contracts are rational responses of residents in rural communities characterized by imperfect credit and insurance services, since households with better access to credit are less likely to rely on contracts.

  July 04, 2016   doi: 10.1111/agec.12248   open full text
• Pseudo panel data estimation technique and rational addiction model: an analysis of cigarette, alcohol and coffee demands.
  Aycan Koksal, Michael Wohlgenant.
  Agricultural Economics. June 02, 2016
  We use a pseudo‐panel data approach to analyze the relationship between the consumptions of cigarettes, alcohol, and coffee in a rational addiction framework. We find that while cigarette and coffee demands fit well with the rational addiction model, alcohol demand conforms to a model with inventory effects. The results suggest that alcohol consumption increases the marginal utility derived from consumption of cigarettes. Increasing alcohol prices would decrease not only the consumption of alcohol, but also the consumption of cigarettes. On the other hand, increasing cigarette prices do not have the same effect on consumption of alcohol. The cross‐price elasticity of coffee with respect to cigarette price is positive and significant which suggests that coffee substitutes for cigarettes when cigarette prices increase. The cross‐price elasticity of alcohol with respect to coffee price is found to be negative and significant. On the other hand, Morishima elasticities of substitution indicate that cigarette, alcohol and coffee substitute each other along the indifference curve when relative prices change.

  June 02, 2016   doi: 10.1111/agec.12237   open full text
• The impact of the 2005–2010 rice price increase on consumption in rural Bangladesh.
  Syed Abul Hasan.
  Agricultural Economics. June 01, 2016
  This article studies the impact of the rice price increase between 2005 and 2010 on consumption in rural Bangladesh. Using the Household Income and Expenditure Survey (HIES) data, we compare net rice buyers and sellers to self‐sufficient households. To identify the effect of rice price changes on household consumption of rice, nonrice food and nonfood items, we employ a difference‐in‐differences (DiD) technique. Our findings indicate that the surge in domestic rice prices between 2005 and 2010 reduced the nonrice food consumption of net rice buyer households by 7%, compared to the households who are self‐sufficient in rice production. However, it did neither affect their rice nor their nonfood consumption. In contrast, while we find no significant effect of rice price increases on the rice consumption of net rice sellers, we observe a 9% increase in their nonrice food consumption. In such situation, a subsidy on low‐quality rice may be effective in fulfilling the nutritional requirement of low‐income households.

  June 01, 2016   doi: 10.1111/agec.12241   open full text
• Economic valuation of climate‐change‐induced vinery landscape impacts on tourism flows in Tuscany.
  Paulo A.L.D. Nunes, Maria L. Loureiro.
  Agricultural Economics. May 27, 2016
  It is widely acknowledged that landscape features can play a major role in determining tourism demand. The present article assesses the impact of vinery landscape and high‐quality wine production on regional tourism flows in Tuscany, an important tourist region in Italy and renowned for its enchanting countryside. Thus, vinery landscape and high‐quality wine production have been included as explanatory variables in our model for tourism flows. This model has been estimated for both international and domestic markets for the whole region of Tuscany. Estimation results confirm that land areas devoted to the production of these superb Tuscan wines, in the particular case of Siena including the Brunello di Montalcino, play an important role in explaining international tourism flows. In this context, we estimate climate‐change‐induced impacts on vinery landscape and quality wines in the tourism sector. These are estimated to cause a loss in the tourism revenues of nearly 15 and 20 million Euros a year, respectively, for 2020 and 2050, for the Tuscany region. Such losses are quite significant, and reiterate the urgency to identify and implement adequate policy options so as to moderate such land use changes, and respective negative welfare impacts.

  May 27, 2016   doi: 10.1111/agec.12236   open full text
• Adoption of farm‐based irrigation water‐saving techniques in the Guanzhong Plain, China.
  Jianjun Tang, Henk Folmer, Jianhong Xue.
  Agricultural Economics. May 26, 2016
  This article analyses adoption of farm‐based irrigation water saving techniques, based on a cross‐sectional data set of 357 farmers in the Guanzhong Plain, China. Approximately 83% of the farmers use at least one farm‐based water‐saving technique. However, the traditional, inefficient techniques border and furrow irrigation are still prevalent whereas the use of advanced, more efficient techniques is still rather rare. We develop and estimate an adoption model consisting of two stages: awareness of water scarcity and intensity of adoption. We find that awareness of water scarcity and financial status enhance adoption of more advanced techniques whereas access to better community‐based irrigation infrastructure discourages it. We furthermore find both community‐based irrigation infrastructure and farm‐based irrigation water‐saving techniques have mitigating effects on production risk. From the results it follows that adoption can be stimulated via financial support and via extension aimed at enhancing awareness of water scarcity.

  May 26, 2016   doi: 10.1111/agec.12243   open full text
• A retrospective review of the economic impact of the food and drug administration's proposed egg rule.
  Travis Minor, Matt Parrett.
  Agricultural Economics. May 26, 2016
  Using novel 1998–2008 data collected by the Centers for Disease Control and Prevention on foodborne illnesses and outbreaks, we test using a difference‐in‐differences approach whether the Food and Drug Administration's proposed rule entitled “Prevention of Salmonella Enteritidis in Shell Eggs During Production” decreased the number of Salmonella illnesses associated with the consumption of shell eggs. We find that this rule led to a reduction in the number of Salmonella illnesses of between 308 and 434 illnesses per year, which we attribute to a reduction in the number of outbreaks associated with egg‐containing products rather than a reduction in the average number of illnesses reported in each outbreak.

  May 26, 2016   doi: 10.1111/agec.12244   open full text
• On the nature and magnitude of cost economies in hog production.
  Sabine Duvaleix‐Tréguer, Carl Gaigné.
  Agricultural Economics. May 26, 2016
  In this article, we assess the impact of farm size on production cost and evaluate the marginal costs and margins by considering that input prices may change with the scale of production. By using French hog farm data, we estimate a system of equations including a feed price function, input demand functions, and an output supply function based on a technology approximated by a combined generalized Leontief‐Quadratic form. Our results suggest that the marginal costs are over‐estimated when the adjustment of the feed unit prices to a change in farm size is not controlled for. More specifically, the cost economies for large farms (enjoying the highest profits) arise primarily from lower feed prices, with technological scale economies having little impact. In contrast, farms with no hired labor exhibit technological scale economies and reach higher price‐cost margins compared to larger farms.

  May 26, 2016   doi: 10.1111/agec.12245   open full text
• Using proportional modeling to evaluate irrigator preferences for market‐based water reallocation.
  Adam Loch, Peter Boxall, Sarah Ann Wheeler.
  Agricultural Economics. May 24, 2016
  Irrigators’ policy preferences for water reallocation programs usually take the form of proportional data, where one option will be relatively more or less favored than another in the composition of a government's total budget apportionment to address water reform. This study applies a zero‐one inflated beta regression to model Murray–Darling Basin irrigators’ preferences for market‐based water policy programs. Market‐based arrangements are more likely to provide efficient solutions to water reallocation problems, particularly where future uncertainty and appropriate pricing induce irrigator preferences for such programs. Our modeling of drivers of irrigator preferences for government expenditure on market‐based programs identified different determinants of zero (a corner solution) and proportional outcomes for the reallocation of Murray–Darling Basin water. In addition, the proportional modeling identifies some variables (namely, state regional influences, the type of farm production and recent debt, low income, or water allocation stressors) that increase engagement with market‐based programs. Interestingly, while price variables are important and statistically significant, they appear to be less relevant to program engagement than other influences.

  May 24, 2016   doi: 10.1111/agec.12238   open full text
• The productivity of agricultural credit in India.
  Sudha Narayanan.
  Agricultural Economics. May 24, 2016
  This study examines the nature of the relationship between formal agricultural credit and agricultural Gross Domestic Product (GDP) in India, specifically the role of the former in supporting agricultural growth, using state level panel data covering the period 1995–1996 to 2011–2012. The study uses a mediation analysis framework to map the pathways through which institutional credit relates to agricultural GDP relying on a control function approach to tackle the problem of endogeneity. The findings from the analysis suggest that over this period, all the inputs are highly responsive to an increase in institutional credit to agriculture. A 10% increase in credit flow in nominal terms leads to an increase by 1.7% in fertilizers (N, P, K) consumption in physical quantities, 5.1% increase in the tonnes of pesticides, 10.8% increase in tractor purchases. Overall, it seems quite clear that input use is sensitive to credit flow, whereas GDP of agriculture is not. Credit seems therefore to be an enabling input, but one whose effectiveness is undermined by low technical efficiency and productivity.

  May 24, 2016   doi: 10.1111/agec.12239   open full text
• Farmers’ risk preferences and pesticide use decisions: evidence from field experiments in China.
  Yazhen Gong, Kathy Baylis, Robert Kozak, Gary Bull.
  Agricultural Economics. May 24, 2016
  China faces health and environmental problems associated with the use of agricultural chemicals, including pesticides. While previous studies have found that risk aversion affects pesticide use in China, they have focused primarily on commercial cotton farmers. In this study, we consider the case of smaller, semisubsistence and subsistence farmers in a poor and landlocked province of China (Yunnan). We use a field experiment to measure risk aversion and collect detailed data on farm production and input use to specifically ask whether risk aversion affects pesticide use, and whether this effect differs for subsistence farmers producing exclusively for home consumption versus semisubsistence farmers who produce both for home and the market. We find that risk aversion significantly increases pesticide use, particularly for subsistence farmers and for market plots by semisubsistence farmers. Further, this effect of risk aversion significantly decreases with farm size for subsistence farmers, but not for semisubsistence farmers, implying that pesticide use may be used to ensure sufficient food supply for home consumption. Finally, we find barriers to the use of pesticides for subsistence farmers, both in terms of financial constraints and economies of scale. This finding implies that risk‐mitigation strategies, such as crop insurance, may not target food security concerns of subsistence farmers. Given these different motivations for pesticide use, policymakers may wish to consider effective tools to support rural food security for farmers in the poorer regions of China in order to decrease pesticide use.

  May 24, 2016   doi: 10.1111/agec.12240   open full text
• Price transmission, asymmetric adjustment and threshold effects in the cotton supply chain: a case study for Vidarbha, India.
  Aditya Shrinivas, Miguel I. Gómez.
  Agricultural Economics. May 24, 2016
  This study examines price transmission asymmetries in Vidarbha's (India) cotton supply chain from 2002 to 2012. The analysis takes account of thresholds in price adjustments toward their long‐run equilibrium. The first stage considers the price dynamics between international and Indian domestic cotton prices. The second stage considers price transmission from domestic to farm gate cotton prices in Vidarbha. Results from the first stage indicate that Indian and international cotton markets are well‐integrated. In contrast, the second stage reveals significant threshold‐type nonlinearities as well as asymmetries in price transmission between domestic and farm gate prices. The short‐run dynamics suggest that the pass‐through from domestic to farm gate prices is larger when domestic prices decrease than when they increase. Moreover, back of the envelope calculations suggest that the loss in revenue for a typical farmer from a decrease in domestic price is larger than the gains from an increase in domestic price of the same magnitude. The implication is that traders benefit from price fluctuations at the expense of farmers. Evidence from fieldwork in Vidarbha suggest that asymmetries revealed in this analysis may be linked to trader's market power and inadequate market information among farmers.

  May 24, 2016   doi: 10.1111/agec.12242   open full text
• Yield and income effects of rice varieties with tolerance of multiple abiotic stresses: the case of green super rice (GSR) and flooding in the Philippines.
  Jose M. Yorobe, Jauhar Ali, Valerien O. Pede, Roderick M. Rejesus, Orlee. P. Velarde, Huaiyu Wang.
  Agricultural Economics. April 07, 2016
  With the increasing frequency of extreme climatic events, the new challenge is to develop rice varieties that are tolerant of drought, water submergence, and salinity. There are now new high‐yielding green super rice (GSR) cultivars developed at the International Rice Research Institute with increased tolerance to multiple abiotic stresses. But a clear understanding of the economic benefits of these varieties under farmers’ production environments is not yet fully understood. In this article, we assess the yield and income effects of GSR rice varieties using a two‐year panel data from one province. We use matched samples from a propensity score matching method and a fixed‐effects model within a difference‐in‐difference (DID) framework to estimate the yield effects. The income effects were evaluated using the parameter estimates from the yield/production function model. The results of the ordinary least squares and DID fixed‐effects regressions reveal significant and positive effects of GSR varieties on yield. The most important finding is that the benefits from these varieties are strongly felt when there is flooding. This evidence was not as robust when matched samples were used. However, it is clear that the yield benefits from GSR varieties could improve rice food security and help alleviate poverty in the country.

  April 07, 2016   doi: 10.1111/agec.12227   open full text
• The capitalization of coupled and decoupled CAP payments into land rental rates.
  Stephen O'Neill, Kevin Hanrahan.
  Agricultural Economics. April 06, 2016
  This article explores the extent to which payments under the Common Agricultural Policy (CAP) are capitalized into land rents in Ireland with implications for the transfer efficiency of such payments, since subsidies may not benefit targeted recipients if they are capitalized into input prices. Capitalization in the years preceding and following the "decoupling" of agricultural support payments from agricultural production is explored. In the period prior to decoupling, direct support (Pillar 1) payments were highly capitalized into Irish agricultural rents (67–90 cents per euro of subsidies), while in the post‐decoupling period capitalization appears to have declined somewhat.

  April 06, 2016   doi: 10.1111/agec.12229   open full text
• Rice mountain: assessment of the Thai rice pledging program.
  Risti Permani, David Vanzetti.
  Agricultural Economics. April 06, 2016
  The Thai Government introduced a generous price support program for paddy rice in 2011. The policy terminated in mid 2014 with the dismissal of the democratically elected Prime Minister, Ms Yingluck Shinawatra. There is an interest in understanding the welfare effects of the policy given the ongoing civil suit put against the former Prime Minister and the large stocks that remain. This study therefore analyses the welfare effects of various Thai rice policy options using a 10‐region, dynamic, stochastic, partial equilibrium model of world rice trade. It finds that while the Thai policy was effective in supporting the incomes of rice producers in the short run, the burden imposed on taxpayers and consumers seems difficult to justify.

  April 06, 2016   doi: 10.1111/agec.12228   open full text
• Tradeoffs and complementarities in the adoption of improved seeds, fertilizer, and natural resource management technologies in Kenya.
  Priscilla Wainaina, Songporne Tongruksawattana, Matin Qaim.
  Agricultural Economics. March 30, 2016
  There is widespread consensus that agricultural technology has an important role to play for poverty reduction and sustainable development. There is no consensus, however, about the types of technologies that are best suited for smallholder farmers in Africa. While some consider natural resource management (NRM) technologies as most appropriate, others propagate input intensification with a stronger role of the private sector. In the public debate, these two strategies are often perceived as incompatible. Environmental non‐governmental organizations in particular consider low‐external input strategies as the only sustainable form of agriculture, a view that has considerable influence on policymakers and the international donor community. Most existing research studies on smallholder innovation focus on the adoption of individual technologies, so that comparisons between different types of technologies in the same context are not easily possible. We use representative data from maize‐producing households in Kenya and a multivariate probit model to analyze the adoption of different types of technologies simultaneously. Results indicate that NRM technologies and strategies that build on external inputs are not incompatible. Interesting complementarities exist, which are not yet sufficiently exploited because many organizations promote either one type of technology or the other, but rarely a combination of both.

  March 30, 2016   doi: 10.1111/agec.12235   open full text
• India's post‐green‐revolution agricultural performance: what is driving growth?
  Nicholas Rada.
  Agricultural Economics. March 30, 2016
  Following a period of poor performance in the 1990s, India's agricultural growth rate has reaccelerated in the 2000s. Some believe the reacceleration has been a product of intensified investment, which in turn has spurred yield growth. Others suggest it is because India's newly wealthy citizens have demanded greater product diversification. To examine these hypotheses, we use growth accounting techniques in conjunction with more complete agricultural production data than in past studies to construct state, regional, and national output, input, and total factor productivity quantity indexes, which can be decomposed into their underlying sources. Sectoral performance evaluation suggests that, since 1980, output growth has diffused away from the northern “grain belt” and toward high‐value agriculture in traditionally less‐productive regions. Productivity growth, rather than resource use, has accounted for these geographical and intensity shifts. The growth burst has not, as the literature has primarily argued, been uniquely explainable by yield growth or product diversification but by a variety of factors, including area expansion. For example, the contributions of irrigation technologies permitting double‐cropping have until now been largely ignored.

  March 30, 2016   doi: 10.1111/agec.12234   open full text
• Estimating the impact of farmer field schools in sub‐Saharan Africa: the case of cocoa.
  Francis Tsiboe, Bruce L. Dixon, Lawton L. Nalley, Jennie S. Popp, Jeff Luckstead.
  Agricultural Economics. March 30, 2016
  This study measures the economic impact of the first phase of the Cocoa Livelihood Program (CLP‐I), a current World Cocoa Foundation (WCF) project, sponsored by the Bill and Melinda Gates Foundation and aimed at improving the livelihood of over 200,000 small cocoa producers in sub‐Saharan Africa via training, crop diversification, and farmer‐based organizations. Using data collected from 2,048 pre‐ and post‐CLP‐I interviews of cocoa producers in Ghana, Cote d'Ivoire, Nigeria, and Cameroon, the results show that yield enhancements attributable to CLP‐I are 32%, 34%, 50%, and 62% in Ghana, Côte d'Ivoire, Nigeria, and Cameroon, respectively. Using a total program cost of $151–$200 per beneficiary and estimated annual benefits of $109–$322 per beneficiary over 25 years, the benefit‐cost ratios are estimated to range from $18 to $62 for every dollar spent on human capital development. These results suggest the WCF should endeavor to increase the number of farmers who receive all, not some, of the components of the program. This would not only help ensure that each producer obtains as much human capital as possible from each of the training programs but increases the probability of reaching the CLP goal of doubling the income of cocoa‐growing households.

  March 30, 2016   doi: 10.1111/agec.12233   open full text
• The efficiency of composite weather index insurance in hedging rice yield risk: evidence from China.
  Hong  Shi, Zhihui  Jiang.
  Agricultural Economics. March 30, 2016
  As an economic and market‐transparent program, weather index insurance is expected to mitigate asymmetric problem. Capturing the relationship between yield and weather factor(s) is the basis of index insurance, but remains a challenge for weather index schemes. Meanwhile, composite weather index insurance is needed by farmers when their agricultural activities involve several risks, but is rarely studied. We aim to design a composite weather index insurance model and evaluate its efficiency in hedging yield risk by using the case of rice production in China. We divide the whole growth cycle of rice into six stages on the basis of agronomic knowledge, and use the average value of each weather factor in each stage to design a weather index. Then, the efficiency of composite weather index insurance is evaluated by mean‐semivariance and value‐at‐risk methods. First, we find that subdivision of the growth cycle helps to better capture the subtle relationship between rice yield and weather factors. Second, composite weather index insurance evidently reduces yield risk. Our findings help further adoption of weather index insurance in agricultural fields.

  March 30, 2016   doi: 10.1111/agec.12232   open full text
• Rising wages, mechanization, and the substitution between capital and labor: evidence from small scale farm system in China.
  Xiaobing Wang, Futoshi Yamauchi, Jikun Huang.
  Agricultural Economics. March 30, 2016
  This article aims to investigate major factors that led to the observed pace of mechanization and the substitution between labor and machines in rural China. We used commodity‐wise province‐level panel data for more than a quarter of a century from 1984 to 2012. The analysis demonstrated a dramatic increase in real agricultural wages in recent years, especially after 2003, in contrast to a relatively stable real machine price. The relative price of machines against agricultural labor has declined in an accelerating way, which contributed to the observed rapid introduction of machines. The elasticity of substitution between labor and machines was large in some commodities, which contributed to a fast substitution of labor by machines.

  March 30, 2016   doi: 10.1111/agec.12231   open full text
• The effects of China's Sloping Land Conversion Program on agricultural households.
  Zhen Liu, Arne Henningsen.
  Agricultural Economics. March 30, 2016
  In the late 1990s, China aimed to mitigate environmental degradation from agricultural production activities by introducing the world's largest “Payments for Environmental Servicesˮ program: the Sloping Land Conversion Program (SLCP). We develop a microeconomic Agricultural Household Model, which can model the production, consumption, and nonfarm labor supply decisions of agricultural households in rural China in a theoretically consistent fashion. Based on this theoretical model, we derive an empirical specification, which we econometrically estimate using the Hausman–Taylor method and a large longitudinal farm household data set. The empirical results significantly differ between regions, but are generally consistent with the results of our theoretical comparative static analysis, for example, that the SLCP significantly decreases agricultural production. While the SLCP only increases nonfarm labor supply and total consumption in some regions, these effects could not be observed in others. The recent reduction of the SLCP compensation payment rates generally had negligible effects on agricultural production and off‐farm work and only very small effects on household consumption.

  March 30, 2016   doi: 10.1111/agec.12230   open full text
• Price relationships between qualitatively differentiated agricultural products: organic and conventional wheat in Germany.
  Nadine Würriehausen, Rico Ihle, Sebastian Lakner.
  Agricultural Economics. October 22, 2014
  Organic agriculture, which produces commodities that can be qualitatively differentiated from conventional food products, has grown into an important market in many countries. The dynamics of commodity prices in both sectors are partly interdependent, but are also shaped by independent determinants and have rarely been studied. We analyze organic food markets and their interdependencies with conventional markets in the context of wheat markets in Germany, which have been subject to a number of fundamental changes during the last two decades. Based on institutional market characteristics, we suggest a flexible Markov‐switching asymmetric time series model. We find a pronounced temporal sequence of market phases that differ in their asymmetric dynamics and the extent to which the organic price is influenced by the conventional price. Organic wheat prices tend to be increasingly connected to prices of conventional wheat.

  October 22, 2014   doi: 10.1111/agec.12137   open full text
• Does migration raise agricultural investment? An empirical analysis for rural Mexico.
  Marcus H. Böhme.
  Agricultural Economics. August 11, 2014
  The effect of remittances on capital accumulation remains a contested topic. This article uses a panel data set from rural Mexico to investigate the impact of remittances on agriculture and livestock investments. After controlling for the endogeneity of migration through an instrumental variable estimation our empirical results show that international migration has a significantly positive effect on the accumulated agricultural assets but not on livestock capital. This suggests that households use the capital obtained from international migration only to overcome liquidity constraints for subsistence production whereas migration itself seems to be the superior investment option compared to other productive activities such as livestock husbandry.

  August 11, 2014   doi: 10.1111/agec.12136   open full text
• A roller coaster ride: an empirical investigation of the main drivers of the international wheat price.
  Bernardina Algieri.
  Agricultural Economics. April 23, 2014
  Over the last decade, commodity prices have registered substantial booms and busts marked by extreme volatility. Wheat in particular, one of the main nonoil commodities, has registered a roller coaster in price levels which seems to be inconsistent with supply and demand fundamentals. To acutely investigate the drivers of wheat prices and quantify their impact, a vector error correction model (VECM) has been used. The exogenous variables have been distinguished into four groups: market‐specific factors, broad macroeconomic determinants, speculative components, and weather variables. The quadriangulation of the determinants will enable us to better understand the movements in wheat price and identify the specific role of each component. The results show that a mix of factors are contributing to wheat price movements, including speculation, global demand, and real effective exchange rate.

  April 23, 2014   doi: 10.1111/agec.12099   open full text
• Fertilizer subsidies and private market participation: the case of Kano State, Nigeria.
  Lenis Saweda O. Liverpool‐Tasie.
  Agricultural Economics. April 22, 2014
  This article estimates the effect of a fertilizer voucher program on farmer participation in the private fertilizer market in Nigeria. Using a double‐hurdle model (to address corner solution challenges with estimating input demand) and a control function approach (to account for the endogeneity of subsidized fertilizer acquired), the study finds evidence that receiving subsidized fertilizer in Kano, Nigeria increased both the probability and extent of participation in the private fertilizer market. Findings demonstrate that under certain circumstances, e.g., where input dealers’ links to farmer are weak; there could be significant gains from the temporary use of voucher programs to strengthen such links.

  April 22, 2014   doi: 10.1111/agec.12114   open full text
• Jointness through vessel capacity input in a multispecies fishery.
  Lars Gårn Hansen, Carsten Lynge Jensen.
  Agricultural Economics. April 21, 2014
  The success of regulations of multispecies fisheries may depend critically on understanding output dependencies correctly. An example is purse seine fisheries that target several species over the season but are specialized in the sense that each species are targeted individually. Such fisheries are typically modeled as either independent single species fisheries or using standard multispecies functional forms characterized by jointness in inputs. We argue that production of each species is essentially independent but that jointness may be caused by competition for fixed but allocable input of vessel capacity. We develop a fixed but allocatable input model of purse seine fisheries capturing this particular type of jointness. We estimate the model for the Norwegian purse seine fishery and find that it is characterized by nonjointness, while estimations for this fishery using the standard models imply jointness.

  April 21, 2014   doi: 10.1111/agec.12119   open full text
• Analyzing the welfare‐improving potential of land in the former homelands of South Africa.
  Stefania Lovo.
  Agricultural Economics. April 02, 2014
  This article contributes to the debate on the role of land in reducing poverty in rural South Africa. It uses the year of arrival in the former homelands as an instrument for land access and size. This identification strategy is based on the fact that African households were forcibly relocated to the homelands during the apartheid. Due to increasing population pressure, later arrivals were less likely to be assigned land. The results show that land has a large positive effect on household welfare. Because the homelands are relatively disadvantaged areas, these results provide a lower bound for the positive effects of land on household welfare.

  April 02, 2014   doi: 10.1111/agec.12115   open full text
• Inter‐ and intra‐seasonal crop acreage response to international food prices and implications of volatility.
  Mekbib G. Haile, Matthias Kalkuhl, Joachim Braun.
  Agricultural Economics. April 02, 2014
  Understanding how producers make decisions to allot acreage among crops and how decisions about land use are affected by changes in prices and their volatility is fundamental for predicting the supply of staple crops and, hence, assessing the global food supply situation. This study makes estimations of monthly (i.e., seasonal) versus annual global acreage response models for the world's principal staple food crops: wheat, corn, soybeans, and rice. Primary emphasis is given to the magnitude and speed of the allocation process. Estimation of intra‐annual acreage elasticity is crucial for expected food supply and for input demand, especially in the light of the recent short‐term volatility in food prices. The econometric results indicate that global crop acreage responds to crop prices and price risks, input costs as well as a time trend. Depending on respective crop, short‐run elasticities are about 0.05 to 0.40; price volatility tends to reduce acreage for some of the crops; comparison of the annual and the monthly acreage response elasticities suggests that acreage adjusts seasonally around the globe to new information and expectations. Given the seasonality of agriculture, time is of an essence for acreage response. The analysis indicates that acreage allocation is more sensitive to prices in the northern hemisphere spring than in winter and the response varies across months.

  April 02, 2014   doi: 10.1111/agec.12116   open full text
• Childhood obesity in Mexico: the effect of international migration.
  Amy Damon, Devon Kristiansen.
  Agricultural Economics. April 02, 2014
  This article estimates the effect of international migration from Mexico to the United States on the obesity status of children who remain in Mexico. Theory suggests that increased liquidity as well as changing time allocations resulting from migration may influence obesity outcomes. Natural disasters are used as an identification strategy. Results suggest that older boys in urban areas are more likely to become obese when either a male or female migrates from the household, while girls in urban areas are less likely to become obese. Both changes in food expenditure patterns and time use changes after migration are likely pathways that affect childhood obesity. While there are some changes in food expenditures, we find more importantly that urban girls engage in more housework and screen time after migration, whereas urban teen boys do not substitute for adult work as much as girls. These changes in strenuous activities, particularly for girls, likely explain the differential effect that migration has on boys’ and girls’ obesity outcomes in Mexico.

  April 02, 2014   doi: 10.1111/agec.12117   open full text
• The impact of water price uncertainty on the adoption of precision irrigation systems.
  Karina Schoengold, David L. Sunding.
  Agricultural Economics. April 01, 2014
  We examine whether a firm is more or less likely to adopt precision technology when input prices are stochastic. The results are important to determining whether programs and contracts that reduce input price uncertainty may deter the adoption of conservation practices. An economic model of the technology adoption decision shows that the net effect of input price risk is ambiguous and depends on several factors including the shutdown effect, the mean price effect, the precision expansion effect, and the risk aversion effect. An empirical implementation of the model relies on data on water price and irrigation technology adoption observed in a California irrigation district over the period 1999–2002. The results show that a stable input price increases the adoption of precision technology, but the impact depends on crop choice and land quality characteristics.

  April 01, 2014   doi: 10.1111/agec.12118   open full text
• Modeling skewness with the linear stochastic plateau model to determine optimal nitrogen rates.
  Christopher N. Boyer, B. Wade Brorsen, Emmanuel Tumusiime.
  Agricultural Economics. March 28, 2014
  Accurate modeling of skewness is needed to increase the actuarial fairness of crop insurance. We test Day's conjecture that crop yield skewness becomes negative as nitrogen rates increase and determine how well a linear response stochastic plateau (LRSP) production function matches the pattern of observed skewness using four long‐term nitrogen experiments. Stillwater wheat is consistent with Day's conjecture, but the skewness for Lahoma and Altus wheat yields as well as Altus cotton yields are not. The LRSP assumes normal random effects and can explain only a small part of observed skewness, so a new LRSP with skew‐normal random effects is introduced, which comes closer to explaining the observed skewness and should increase the accuracy of nitrogen rate recommendations. Negative skewness reduced optimal nitrogen rates and positive skewness increased optimal nitrogen rates.

  March 28, 2014   doi: 10.1111/agec.12121   open full text
• Perennial crops under stochastic water supply.
  Eli Feinerman, Yacov Tsur.
  Agricultural Economics. March 28, 2014
  Perennial crops require substantial initial investment in groundwork and planting, as well as a multiyear gestation period without commercial yield. Therefore, a crop's cycle (from planting to felling) should be long enough in order to cover the fixed cost and become profitable. The problem becomes involved when the cycle's duration is stochastic due to occurrence of uncertain event that terminates the cycle prematurely. Studying orchard management under stochastic drought events, we show that to each perennial crop that is profitable without drought hazard, there exists a critical drought hazard above which the crop turns loss making. We refer to this critical drought hazard as the crop's drought vulnerability index and show that it increases with the length of the gestation period, the ratio of fixed cost to average annual profit and the interest rate, and decreases with the natural (uninterrupted) cycle length. We then investigate the economic value of a stable water source, such as recycled water, that stabilizes the water supply and diminishes the drought hazard. An empirical application in northern Israel reveals that the stabilization value of recycled water due to its role in eliminating the drought hazard far exceeds its supply cost.

  March 28, 2014   doi: 10.1111/agec.12120   open full text
• The interaction of speculators and index investors in agricultural derivatives markets.
  Benoît Guilleminot, Jean‐Jacques Ohana, Steve Ohana.
  Agricultural Economics. March 28, 2014
  Through the analysis of the weekly Commodity Futures Trading Commission reports on 12 US traded agricultural commodities, we revisit the heated debate on the impact of index flows on commodities prices. After introducing a novel stock‐to‐use proxy that may be used to represent inventory variations at the intra‐month level, we show that speculators, contrary to index investors, are sensitive to commodity‐specific fundamental information. Their endogeneity to commodities markets hinders the estimation of their market impact. Regarding the market impact of index flows, the endogeneity problem is alleviated in two ways: first, we restrict the scope to agricultural commodities, for which index flows are more exogenous to market prices; second, we introduce two novel instrumental variables that are computed from index flows outside the market under analysis. We find that index investment flows are offset by commercial players, not speculators. The serial correlation of index flows may explain the tendency of speculators to synchronize with index investors. There is strong evidence of an index flows' impact in those commodities markets where speculative and index positions are the most correlated. The market impact of index flows is located in periods of liquidity stress, as is the correlation between speculative and index positions. Overall, our results demonstrate an impact of index investors on some agricultural prices and suggest that the synchronicity between speculative and index positions is an important determinant of this impact.

  March 28, 2014   doi: 10.1111/agec.12122   open full text
• Risk, learning, and technology adoption.
  Bradford L Barham, Jean‐Paul Chavas, Dylan Fitz, Vanessa Ríos‐Salas, Laura Schechter.
  Agricultural Economics. March 28, 2014
  This article explores how decision makers learn and use information, with an application to the adoption of biotechnology in agriculture. The empirical analysis relies on experimental and survey data measuring risk preferences, learning processes, and the adoption of genetically modified (GM) seeds among U.S. grain farmers. While controlling for risk aversion, we link individual learning rules with the cognitive abilities of each decision maker and their actual GM adoption decisions. We find evidence that very few individuals are Bayesian learners, and that the population of farmers is quite heterogeneous in terms of learning rules. This suggests that Bayesian learning (as commonly assumed in the analysis of agricultural technology adoption) is not an appropriate characterization. In addition, we do not find a strong relationship between observed learning styles and the timing of GM seed adoption. To the extent that learning is a key part of the process of technology adoption, this suggests the presence of much unobserved heterogeneity in learning among farmers.

  March 28, 2014   doi: 10.1111/agec.12123   open full text
• A dynamic adoption model with Bayesian learning: an application to U.S. soybean farmers.
  Xingliang Ma, Guanming Shi.
  Agricultural Economics. March 28, 2014
  Adoption of agricultural technology is often sequential, with farmers first adopting a new technology on part of their lands and then adjusting their use of the new technology in later years based on what was learned from the initial partial adoption. Our article explains this experimental behavior by using a dynamic adoption model with Bayesian learning, in which forward‐looking farmers take account of future impacts of their learning from both their own and their neighbors’ experiences with the new technology. We apply the analysis to a panel of U.S. soybean farmers surveyed from 2000 to 2004 to examine their adoption of the genetically modified (GM) seed technology. We compare the results of the forward‐looking model to that of a myopic model, in which farmers maximize current benefits only. Results suggest that the forward‐looking model fits data better than the myopic model does. And potential estimation biases arise when fitting a myopic model to forward‐looking decision makers.

  March 28, 2014   doi: 10.1111/agec.12124   open full text
• Measuring the effect of risk attitude on marketing behavior.
  Jason R.V. Franken, Joost M.E. Pennings, Philip Garcia.
  Agricultural Economics. January 29, 2014
  Despite extensive study, researchers continue to search for consistent and reliable measures of risk preferences to explain market behavior. We find that a measure, combining experiments rooted in expected utility theory and measures derived from surveys, explains spot and contractual sales, but does not exhibit substantially greater explanatory power than its underlying components. Survey‐based measures are generally more significant indicators of marketing choices, but experimental measures reveal how risk attitudes vary over a range of probable outcomes, which is important in light of increased commodity price volatility. Given recently identified limitations on the applicability of expected utility theory, we suggest that researchers include survey methods to obtain low‐cost supplemental measures.

  January 29, 2014   doi: 10.1111/agec.12104   open full text
• Water access, farm productivity, and farm household income: Sri Lanka's Kirindi Oya irrigation system.
  Parakrama Weligamage, C. Richard Shumway, Keith A. Blatner.
  Agricultural Economics. January 20, 2014
  Income differences attributed to differential access to water in irrigation systems are common. Prior studies of farm‐level water use in developing areas have typically been limited to using number of irrigations as a proxy for water use. We develop a volumetric measure in Sri Lanka's Kirindi Oya Irrigation System through recent farmer recall and use it in production function estimation and welfare analysis. Findings indicate substantial differences in water use by farms across seasons and across subareas of the irrigation district. Alternative plans for allocating additional water among seasons and subareas to elevate net rice revenues are examined. The recommended plan predicts higher net returns from rice and greater equality in the distribution of household income than would be generated if the additional water were allocated based on the current allocation criteria. Concurrent application of fertilizer at recommended levels would further increase net revenues and reduce income inequality.

  January 20, 2014   doi: 10.1111/agec.12113   open full text
• Risk and marketing behavior: pricing fed cattle on a grid.
  Scott W. Fausti, Zhiguang Wang, Bashir A. Qasmi, Matthew A. Diersen.
  Agricultural Economics. January 09, 2014
  A seven‐year comparative study of grid pricing versus average pricing of slaughter cattle was conducted to evaluate carcass quality market signals. The primary objectives of the study are to determine: (1) if market signals sent through the grid pricing system indicate an improvement in the grid incentive mechanism over time, (2) how changes in the grid premium and discount structure associated with carcass quality affect the market risk premium, and (3) if changes in price risk (variance) affect producer marketing decisions. An Exponential‐Autoregressive‐Conditional‐Heteroskedasticity‐in‐Mean (EARCH‐in‐Mean) modeling procedure was adopted. Empirical results suggest that the grid premium and discount structure is slowly adjusting carcass quality market signals to encourage marketing on a grid and discourage marketing by the pen. The inclusion of the conditional variance in the empirical model indicates that variance associated with the carcass quality risk premium adds financial risk associated with the adoption of grid pricing.

  January 09, 2014   doi: 10.1111/agec.12109   open full text
• The theoretical structure of producer willingness to pay estimates.
  Samuel D. Zapata, Carlos E. Carpio.
  Agricultural Economics. January 09, 2014
  This article analyzes the theoretical underpinnings of producer willingness to pay (WTP) for new inputs. In addition to conceptualizing the producer WTP function, we derive its comparative statics and show how these properties can be used to estimate quantities demanded or supplied and price elasticities. We also discuss implications of the comparative statics.

  January 09, 2014   doi: 10.1111/agec.12110   open full text
• Aquaculture imports from Asia: an analysis of U.S. consumer demand for select food quality attributes.
  David L. Ortega, H. Holly Wang, Nicole J. Olynk Widmar.
  Agricultural Economics. January 09, 2014
  The increasing share of imported food in the United States, coupled with highly publicized incidents of food contamination and adulteration in Asia, particularly China, is posing new challenges for consumers and food safety regulators. In this study, we focus on imported shrimp and tilapia, to evaluate consumer willingness‐to‐pay (WTP) for enhanced food safety, use of antibiotics, and eco‐friendly environmental practices. Results show that U.S. consumers were willing‐to‐pay more for enhanced food safety, followed by the use of no antibiotics and environmental friendly production practices. American consumers in our sample were found to have a higher WTP for domestic products and placed more trust on U.S. government verification of product attributes followed by third‐party certification.

  January 09, 2014   doi: 10.1111/agec.12111   open full text
• On the transferability of the Asian rice green revolution to rainfed areas in sub‐Saharan Africa: an assessment of technology intervention in Northern Ghana.
  Millicent deGraft‐Johnson, Aya Suzuki, Takeshi Sakurai, Keijiro Otsuka.
  Agricultural Economics. January 08, 2014
  This article investigates the impact of technical intervention on the adoption of a set of improved rice production technologies, as well as on productivity and profit for smallholders in rainfed lowland areas in Northern Ghana. The key finding is that productivity and profit are significantly enhanced when modern varieties (MVs) and chemical fertilizer are adopted, coupled with water control techniques. This is essentially the transfer of the Asian Green Revolution to sub‐Saharan Africa. Such transfer, however, is not truly successful unless information about the use of MVs and fertilizer is directly disseminated by extension activities.

  January 08, 2014   doi: 10.1111/agec.12106   open full text
• Fertilizer subsidies and food self‐sufficiency in Indonesia.
  Peter Warr, Arief Anshory Yusuf.
  Agricultural Economics. January 08, 2014
  Indonesia is a net importer of almost all of its staple foods. National self‐sufficiency in food, especially the main staple, rice, is a core objective of economic policy. Poverty reduction is also a core policy objective. Since the 1970s, Indonesia has used agricultural input subsidies, especially on fertilizer, to stimulate agricultural production, largely in pursuit of the goal of rice self‐sufficiency. More recently, it has also used output protection, especially in rice, for the same purpose. This article utilizes a multisectoral, multihousehold general equilibrium model of the Indonesian economy to study the trade‐offs between the goals of self‐sufficiency and poverty reduction when two alternative means are used to achieve them: a fertilizer subsidy, on the one hand, and output protection, on the other. It does this by analyzing the aggregate and distributional effects of these two sets of policies and by comparing their effects with nonintervention. The analysis shows that, in terms of its effects on poverty, a fertilizer subsidy can be a more effective instrument for achieving the goal of rice self‐sufficiency than final product import restrictions.

  January 08, 2014   doi: 10.1111/agec.12107   open full text
• An experimental approach to valuing information.
  Tyler J. Klain, Jayson L. Lusk, Glynn T. Tonsor, Ted C. Schroeder.
  Agricultural Economics. January 02, 2014
  This article proposes a method to directly measure the value of information (VOI) conveyed in a label. Using data collected from a field experiment conducted in two grocery stores in Texas, we find the VOI contained in U.S. federally mandated country of origin labels for beef and pork is 36% lower using the new direct elicitation compared to the conventional approach. The mean value‐of‐origin information, in the context of our experiment, ranges from $0.016 to $1.08 per pound of steak/chop purchased, depending on the valuation method used and assumptions about labeling knowledge and average volume purchased per choice. The VOI is substantively influenced by ethnocentrism and meat consumption frequency.

  January 02, 2014   doi: 10.1111/agec.12112   open full text
• Wage and employment effects of Malawi's fertilizer subsidy program.
  Jacob Ricker‐Gilbert.
  Agricultural Economics. September 18, 2013
  This article uses three waves of nationally representative household‐level panel data from Malawi to estimate how a large‐scale fertilizer subsidy program impacts the agricultural labor market, known as ganyu in that country. I find that when looking across the entire population of smallholders, receiving an additional 100 kg of subsidized fertilizer causes the average household to supply about three fewer days of ganyu. The fertilizer subsidy program also has a small positive effect on the probability that a household demands agricultural labor, with the results approaching statistical significance. In addition, a 10 kg increase in the average amount of subsidized fertilizer acquired per household in a community boosts the median agricultural wage rate by 1.4% in that community. The increase in wage rates translates to a US $1.40 per year increase in average household income in the years after Malawi's subsidy program was scaled up, and a US $1.86 per year increase in average household income for those who sold their labor before the subsidy program was scaled up. This finding suggests that households who sell their labor off farm may experience some small spillover benefit from the program in the form of higher agricultural wage rates.

  September 18, 2013   doi: 10.1111/agec.12069   open full text
• Did the commodity price spike increase rural poverty? Evidence from a long‐run panel in Bangladesh.
  Joseph V. Balagtas, Humnath Bhandari, Ellanie R. Cabrera, Samarendu Mohanty, Mahabub Hossain.
  Agricultural Economics. September 17, 2013
  We assess the effects of the dramatic rise in agricultural commodity prices during 2007–2008 on income dynamics and poverty among rural households in Bangladesh. A unique panel data set allows us to put the effects of recent events in the context of long‐run trends in income and poverty. We use data from a nationally representative longitudinal survey of rural households in Bangladesh collected in four waves in 1988, 2000, 2004, and 2008. Nargis and Hossain (Nargis, N., Hossain, M., 2006. Income dynamics and pathways out of rural poverty in Bangladesh, 1988–2004. Agric. Econ. 35, 425–435) analysed income dynamics and poverty incidence for the first three waves, finding a declining trend in both the incidence and severity of poverty, aided in particular by human capital development and off‐farm employment opportunities. We update and extend the analysis to include data collected in 2008, at the height of a spike in agricultural prices. We find that the price of a balanced food basket increased by more than 50% during 2000–2008, while household income rose only 15%. As a result the incidence and severity of rural poverty in Bangladesh sunk to pre‐2000 levels during 2004–2008. Thus, the price spikes in 2007–2008 helped push an additional 13 million people into poverty in rural Bangladesh. Moreover, we find that the determinants of poverty have not been time‐invariant. In particular, agricultural production, which had previously been associated with a higher incidence of poverty, served as a hedge against higher food prices during 2004–2008.

  September 17, 2013   doi: 10.1111/agec.12066   open full text
• Residual demand measures of market power of Russian wheat exporters.
  Zsombor Pall, Oleksandr Perekhozhuk, Thomas Glauben, Sören Prehn, Ramona Teuber.
  Agricultural Economics. September 12, 2013
  Traditionally, the international wheat market has been considered a good example of a market with perfect competition. Yet, several articles provide evidence of imperfect competition and price discrimination in the wheat trade. However, these studies focused on traditional high‐quality wheat exporters such as Canada and the United States. In contrast, this article investigates whether Russian wheat exporters exercise market power in eight selected importing countries using the residual demand elasticity (RDE) model. The article makes two major contributions. First, it focuses on a nontraditional exporter, who exports mainly wheat of mediocre quality to low‐ and middle‐income countries. Second, the RDE model is estimated for the first time using a nonlinear estimator, the instrumental variable Poisson pseudo‐maximum likelihood estimator. This is important because the double logarithmic functional form can provide biased results in the presence of heteroskedasticity. The results indicate that Russian wheat exporters can exercise market power in only a few markets, while they are price takers in the majority of importing countries.

  September 12, 2013   doi: 10.1111/agec.12072   open full text
• Should African rural development strategies depend on smallholder farms? An exploration of the inverse‐productivity hypothesis.
  Donald F. Larson, Keijiro Otsuka, Tomoya Matsumoto, Talip Kilic.
  Agricultural Economics. September 03, 2013
  In Africa, most development strategies include efforts to improve the productivity of staple crops grown on smallholder farms. An underlying premise is that small farms are productive in the African context and that smallholders do not forgo economies of scale—a premise supported by the often observed phenomenon that staple cereal yields decline as the scale of production increases. This article explores a research design conundrum that encourages researchers who study the relationship between productivity and scale to use surveys with a narrow geographic reach in order to produce more reliable results, even though results are better suited for policy decisions when they are based on data that are broadly representative. Using a model of endogenous technology choice, we explore the relationship between maize yields and scale using alternative data. Since rich descriptions of the decision environments that farmers face are needed to identify the applied technologies that generate the data, improvements in the location specificity of the data should reduce the likelihood of identification errors and biased estimates. However, our analysis finds that the inverse‐productivity hypothesis holds up well across a broad platform of data, despite obvious shortcomings with some components. It also finds surprising consistency in the estimated scale elasticities.

  September 03, 2013   doi: 10.1111/agec.12070   open full text
• An optimal phased replanting approach for cocoa trees with application to Ghana.
  Mahrizal  , L. Lanier Nalley, Bruce L. Dixon, Jennie S. Popp.
  Agricultural Economics. September 02, 2013
  This study solves for the optimum replacement rate (ORR) and initial replacement year (IRY) of cocoa trees (Theobroma cacao) in Ghana to maximize net present value and achieve steady state by employing a phased replanting approach. The annual ORR is 5%–7% across the three production systems studied: Low Input, Landrace Cocoa, High Input, No Shade Amazon Cocoa, and High Input, Medium Shade Cocoa. The optimal IRY ranges from year 5 to year 9 as a function of cocoa prices, fertilizer prices, labor prices, and percentage yield loss due to disease outbreaks. Deterministic results project economic gains that exceed currently practiced replacement approaches by 5.57%–14.67% across production systems with reduced, annual income volatility. The method applied in this study can be used to increase cocoa yields and stabilize income over time, and facilitate substantial quality of life improvements for many subsistence cocoa farmers in Ghana and around the world.

  September 02, 2013   doi: 10.1111/agec.12065   open full text
• The impact of decoupled subsidies on productivity in agriculture: a cross‐country analysis using microdata.
  Andrius Kazukauskas, Carol Newman, Johannes Sauer.
  Agricultural Economics. August 23, 2013
  The decoupling of direct payments from production introduced in the reform of the Common Agricultural Policy is expected to make production decisions more market‐oriented and farmers more productive. However, ex‐post analyses of the productivity of farms have yet to uncover any evidence of a positive impact of the decoupling policy on farm productivity. Using Irish, Danish, and Dutch farm‐level data, we identify whether the decoupling policy has contributed to productivity growth in agriculture and farm product adjustment behavior. We find some evidence that the decoupling policy had significant positive effects on farm productivity and behavioral changes related to farm specialization.

  August 23, 2013   doi: 10.1111/agec.12068   open full text
• Evaluating spatial and temporal variation in agricultural output elasticities in Turkey.
  Tun‐Hsiang “Edward” Yu, Seong‐Hoon Cho, Ahmet Ali Koç, Gülden Bölük, Seung Gyu Kim, Dayton M. Lambert.
  Agricultural Economics. August 23, 2013
  This study evaluates spatial variation in the relationship between agricultural output and input use across Turkey. The potential impact of the national agricultural policy reform introduced in 2001 on the spatial variation in agricultural output elasticities across the country was explored. By applying a spatial production function to the province‐level data in 2000 and 2007, spatial heterogeneity in the variance of provincial total factor productivity and the input factor‐output elasticities was identified across the country. Results show that the disparities in agricultural activities and geographic conditions affected return from input factors. Empirical findings from a spatial spillover model also suggest that changes in the input factor‐output elasticities varied significantly across Turkey between 2000 and 2007, after the policy reform. Results suggest that future policy reform that recognizes regional comparative advantage through understanding the geographic heterogeneity of the agricultural sector is important for enhancing Turkey's agricultural output.

  August 23, 2013   doi: 10.1111/agec.12064   open full text
• How does land fragmentation affect off‐farm labor supply: panel data evidence from China.
  Lili Jia, Martin Petrick.
  Agricultural Economics. August 19, 2013
  This article provides a deeper theoretical understanding of the linkages between land fragmentation and off‐farm labor supply in China, and investigates this relationship empirically in a more direct way than does the existing literature. Drawing upon a rural household panel data set collected in Zhejiang, Hubei, and Yunnan Provinces from 1995 to 2002, we estimate the effects in two steps. First, we estimate the effect of land fragmentation on labor productivity. Second, we estimate the effect of land fragmentation on off‐farm labor supply. The production function results show that land fragmentation indeed leads to lower agricultural labor productivity, implying that land consolidation will make on‐farm work more attractive and thus decrease off‐farm labor supply. However, the effect of land consolidation on off‐farm labor supply is not significant. One likely explanation for this result may be the potentially imperfect labor markets.

  August 19, 2013   doi: 10.1111/agec.12071   open full text
• Econometric analysis of noncompliance with organic farming standards in Switzerland.
  Christian Lippert, Alexander Zorn, Stephan Dabbert.
  Agricultural Economics. August 19, 2013
  Applying the economics of crime theory, we model the decision of an opportunistic and/or careless organic farmer and derive hypotheses to explain noncompliance. Where empirical data are available, hypotheses are tested. We use data for the years 2007 through 2009 of organic farms certified by Bio Suisse. Imposed sanctions are used as a proxy variable for noncompliance and farm characteristics as explanatory variables. Random effects logit models show that processing activities and livestock diversity significantly increase a farm's sanction probability. Past noncompliances also indicate a higher present sanction probability. Finally, we discuss some methodological issues and suggest a way to organize risk‐based inspections more effectively.

  August 19, 2013   doi: 10.1111/agec.12067   open full text
• Feasibility of risk‐based inspections in organic farming: results from a probabilistic model.
  Danilo Gambelli, Francesco Solfanelli, Raffaele Zanoli.
  Agricultural Economics. August 19, 2013
  A risk‐based inspection system might improve the efficiency of the organic farming certification system and ultimately provide a basis for increased competitiveness of this sector. This requires the definition of an effective inspection procedure that allows statistical evaluation of critical risk factors for noncompliance. In this article, we present a study based on data from selected control bodies in five European countries that is aimed at determining the feasibility of risk‐based inspections in the organic sector according to the data that are currently routinely recorded. Bayesian networks are used for identification of the factors that can affect the risk of noncompliance. The results show that previous/concurrent noncompliant behavior explains most of the risk, and that the risk increases with farm size and the complexity of their operations. The data currently recorded by control bodies appear to be insufficient to establish an effective risk‐based approach to these inspections.

  August 19, 2013   doi: 10.1111/agec.12063   open full text
• Food security, the labor market, and poverty in the Brazilian bio‐economy.
  Joaquim Bento de Souza Ferreira Filho.
  Agricultural Economics. July 15, 2013
  This article deals with the social implications of ethanol expansion in Brazil. The evolution of the labor market in sugarcane production in the country is analyzed together with its regional patterns of expansion, to illustrate how changes in the recent expansion are modifying the traditional pattern of labor demand in the activity. At the same time, the distributional effects of sugarcane expansion, as well as it's impacts on food security and land use change was approached with the aid of general equilibrium simulation models. The analysis shows that both the average earnings and the average years of schooling in sugarcane production are actually higher than in general agriculture in Brazil, and that this is linked to the growing increase in production in the Southeast and Central‐West. Sugarcane production in these regions is more capital intensive and has a much higher productivity than in other traditional regions in Northeast Brazil. The study concludes that the expansion in sugarcane production according to actual patterns does not have a negative effect on poverty, and has only minor impacts on food prices and deforestation. The increase in the regional economic imbalances within the country appears to be the problem that requires attention.

  July 15, 2013   doi: 10.1111/agec.12053   open full text
• Global land investments in the bio‐economy: evidence and policy implications.
  Klaus Deininger.
  Agricultural Economics. July 15, 2013
  For countries dependent on agriculture, the recent wave of investor interest in farmland could, in principle, help set in motion a virtuous cycle of economic growth and poverty reduction. A large literature documenting failure of such investments documents the risks involved. To appreciate associated opportunities and challenges, we review past experience, quantify country‐level potential for area expansion versus intensification, and identify determinants of countries’ attractiveness for investors in the initial stages of the “land rush.” The fact that weak land governance seems to increase, rather than reduce, land demand justifies an emphasis on improving institutions, transparency, and accountability while at the same time providing concrete suggestions for policy and research.

  July 15, 2013   doi: 10.1111/agec.12056   open full text
• Technology and the future bioeconomy.
  David Zilberman, Eunice Kim, Sam Kirschner, Scott Kaplan, Jeanne Reeves.
  Agricultural Economics. July 15, 2013
  New discoveries in life sciences and the challenge of climate change are leading to the emergence of the bioeconomy where basic methods of advanced biology are applied to produce a wide array of products while also improving environmental quality. The emergence of the bioeconomy is a continuing evolutionary process of transition from systems of mining nonrenewable resources to farming renewable ones. This transition benefits from the modern tools of molecular biology that have expanded the human capacity to breed new organisms and utilize them to increase productivity in agriculture and fisheries as well as produce a wide array of products that were extracted in the past. This transition is leading to the integration of the agricultural sector with the energy and mineral sectors. The introduction of biotechnology has already improved the productivity of medicine as well as agriculture but, in the case of agriculture, has encountered resistance and regulatory constraints. The evolution of the bioeconomy requires continuous public investment in research and innovation as well as the establishment of a regulatory framework and financial incentives and institutions that would lead to continuous private sector investment in the development and commercialization of new products. One of the biggest challenges is the development of a regulatory framework that would control possible human and environmental externalities from new biotechnology products and, at the same time, not stifle innovation.

  July 15, 2013   doi: 10.1111/agec.12054   open full text
• Adoption of weather‐index insurance: learning from willingness to pay among a panel of households in rural Ethiopia.
  Ruth Vargas Hill, John Hoddinott, Neha Kumar.
  Agricultural Economics. July 08, 2013
  In this article we examine which farmers would be early entrants into weather‐index insurance markets in Ethiopia, were such markets to develop on a large scale. We do this by examining the determinants of willingness to pay for weather insurance among 1,400 Ethiopian households that have been tracked for 15 years as part of the Ethiopian Rural household Survey. This provides both historical and current information with which to assess the determinants of demand. We find that educated, wealthier individuals are more likely to purchase insurance. Risk aversion is associated with low insurance take‐up suggesting that models of technology adoption can inform the purchase and spread of weather index insurance. We also assess how willingness to pay varied as two key characteristics of the contract were varied and found that basis risk reduces demand for insurance particularly when the price of the contract is high, and that provision of insurance through groups is preferred by female headed households and individuals with lower levels of education.

  July 08, 2013   doi: 10.1111/agec.12023   open full text
• The human capital roots of the middle income trap: the case of China.
  Linxiu Zhang, Hongmei Yi, Renfu Luo, Changfang Liu, Scott Rozelle.
  Agricultural Economics. July 07, 2013
  China, like other middle income countries,  is facing the challenges of the next stage of development as its leaders seek to guide the nation into becoming a high income country. In this article we explore one of the major challenges that China is facing in the transition from middle to high income: the management of inequality. In particular, we explore the possible roots of future inequality that is associated with a nation's underinvestment in the human capital of broad segments of its population. To meet this goal, we describe two challenges that China faces in the light of rising wage rates and highly unequal income distribution today. We first discuss the structural and institutional barriers that are discouraging many students (and their parents) from staying in school to achieve the levels of learning that we believe are necessary for preparing individuals for employment in the coming decades. We also identify severe nutritional and health problems. We believe that these nutrition and health problems, unless addressed, will continue to create human capital deficiencies in poor areas of rural China and locking in decades of hard‐to‐address inequality.

  July 07, 2013   doi: 10.1111/agec.12059   open full text
• Agriculture and development: revisiting the policy narratives.
  Stefan Dercon.
  Agricultural Economics. July 07, 2013
  This essay questions the way the findings from research on agriculture in poor countries tend to be summarized in policy narratives, and more specifically the role agricultural economics tends to play in this process. I conclude that there is a tendency to overstate the role agriculture plays in development and, as a result, some of the wrong battles are being fought in the policy advocacy arena, and inappropriate advice is being offered to policy makers. A more open and self‐critical approach to the place of agriculture in development would be more helpful for policy design.

  July 07, 2013   doi: 10.1111/agec.12062   open full text
• Water and food in the bioeconomy: Challenges and opportunities for development.
  Mark W. Rosegrant, Claudia Ringler, Tingju Zhu, Simla Tokgoz, Prapti Bhandary.
  Agricultural Economics. July 07, 2013
  The world economy is under pressure for greater, more efficient and more sustainable use of natural resources to meet complementary and competing objectives in the food, water and energy sectors. Interactions between these three sectors have become increasingly affected by the bioeconomy—a concept that encompasses economic growth driven by the development of renewable biological resources and biotechnologies to produce sustainable products, employment and income. This article explores how water and the bioeconomy are interlinked, including how the constraints from growing water scarcity—in part caused by development of the bioeconomy—may influence bioeconomic growth. The article describes the impact of biofuel production on water quantity and quality and examines the potential for improved water use through the development of crop biotechnology and improved crop management. Then alternative scenarios for water in the bioeconomy are assessed, and policy conclusions are presented.

  July 07, 2013   doi: 10.1111/agec.12058   open full text
• Commodity index investment and food prices: does the “Masters Hypothesis” explain recent price spikes?
  Scott H. Irwin.
  Agricultural Economics. July 07, 2013
  The “Masters Hypothesis” is the claim that unprecedented buying pressure in recent years from commodity index investors created massive bubbles in food and energy prices. The purpose of this article is to review the evidence from recent studies that investigate the empirical relationship between index investment and price movements in agricultural futures markets. One line of research uses time‐series regression tests, such as Granger causality tests, to investigate the relationship between price movements and index positions. This research provides little evidence in support of the Masters Hypothesis in agricultural futures markets. A second line of research uses cross‐sectional regression tests and studies in this area provide very limited evidence in favor of the Masters Hypothesis for agricultural futures markets. A third line of research investigates whether there is a significant relationship between commodity index trading and the difference, or spread, between futures prices of different contract maturities on the same date. These studies report a range of results depending on the type of test. However, the bulk of the evidence indicates either no relationship or a negative relationship, which is once again inconsistent with the Masters Hypothesis. Overall, this growing body of literature fails to find compelling evidence that buying pressure from commodity index investment in recent years caused a massive bubble in agricultural futures prices. The Masters Hypothesis is simply not a valid characterization of reality.

  July 07, 2013   doi: 10.1111/agec.12048   open full text
• Competition for land in the global bioeconomy.
  Thomas Hertel, Jevgenijs Steinbuks, Uris Baldos.
  Agricultural Economics. July 07, 2013
  The global land use implications of biofuel expansion have received considerable attention in the literature over the past decade. Model‐based estimates of the emissions from cropland expansion have been used to assess the environmental impacts of biofuel policies. And integrated assessment models have estimated the potential for biofuels to contribute to greenhouse gas (GHG) abatement over the coming century. All of these studies feature, explicitly or implicitly, competition between biofuel feed stocks and other land uses. However, the economic mechanisms governing this competition, as well as the contribution of biofuels to global land use change, have not received the close scrutiny that they deserve. The purpose of this article is to offer a deeper look at these factors. We begin with a comparative static analysis which assesses the impact of exogenously specified forecasts of biofuel expansion over the period: 2006–2035. Global land use change is decomposed according to the three key margins of economic response: extensive supply, intensive supply, and demand. Under the International Energy Agency's “New Policies” scenario, biofuels account for nearly one‐fifth of global land use change over the 2006–2035 period. The article also offers a comparative dynamic analysis which determines the optimal path for first and second generation biofuels over the course of the entire 21st century. In the absence of GHG regulation, the welfare‐maximizing path for global land use, in the face of 3% annual growth in oil prices, allocates 225 Mha to biofuel feed stocks by 2100, with the associated biofuels accounting for about 30% of global liquid fuel consumption. This area expansion is somewhat diminished by expected climate change impacts on agriculture, while it is significantly increased by an aggressive GHG emissions target and by advances in conversion efficiency of second generation biofuels.

  July 07, 2013   doi: 10.1111/agec.12057   open full text
• Food insecurity, income inequality, and the changing comparative advantage in world agriculture.
  Keijiro Otsuka.
  Agricultural Economics. July 01, 2013
  I would like to argue in this article that in the process of economic development in land‐poor countries in Asia, agriculture faces three distinctly different problems: food insecurity, sectoral income inequality, and the declining food self‐sufficiency associated with the declining comparative advantage in agriculture at the high‐income stage. Massive imports of food grains to Asia, if they occur, will aggravate the world food shortage, which will have significant implications for the poverty incidence in the world. I argue that in order to avoid such a tragedy, Asia should expand farm size to reduce labor cost by adopting large‐scale mechanization, sub‐Saharan Africa should realize a green revolution in grain production, and Latin America should further expand its grain production capacity.

  July 01, 2013   doi: 10.1111/agec.12046   open full text
• Options for African agriculture in an era of high food and energy prices.
  Peter B. R. Hazell.
  Agricultural Economics. July 01, 2013
  In a world of high food and energy prices, Africa has an imperative to do a better job feeding itself and ensuring that its people are food secure. At the same time, there is a new business opportunity to work with the private sector in developing the continent's potential to produce significantly more food, raw materials, and biofuels for regional and world markets. A challenge for African policy makers is to find the right balance between a food security and a business agenda, and to ensure that the business agenda engages with large numbers of small farms. Agricultural development requires many things, but the fundamentals for Africa are developing markets, increasing agricultural productivity, and managing volatility. This cannot happen at sufficient scale and speed without strong public sector leadership, enabling policies and investments, and well‐focused implementation strategies.

  July 01, 2013   doi: 10.1111/agec.12047   open full text
• Time‐series econometric analyses of biofuel‐related price volatility.
  Teresa Serra.
  Agricultural Economics. July 01, 2013
  Time‐series econometrics studies have analyzed volatility interactions between biofuel and food and fossil fuel markets. We review data, modeling techniques and the main findings in the literature, and present our latest contributions. We identify areas for further research.

  July 01, 2013   doi: 10.1111/agec.12050   open full text
• Climate change, weather shocks, and violent conflict: a critical look at the evidence.
  Jeroen Klomp, Erwin Bulte.
  Agricultural Economics. July 01, 2013
  We use cross‐country data to explore whether temperature and rainfall shocks trigger violent conflict, or not. We include a wide range of country and time samples, and explore whether the impact of weather shocks is conditional on income or political regimes. Our overall conclusion is sobering. Notwithstanding the attention this topic has attracted from the media and policy makers, we find little robust evidence linking weather shocks to the onset of conflict.

  July 01, 2013   doi: 10.1111/agec.12051   open full text
• Volatility, agricultural risk, and household poverty: micro‐evidence from randomized control trials.
  Karen Macours.
  Agricultural Economics. July 01, 2013
  Households in developing countries are often highly exposed to risk and despite households’ risk strategies negative shocks often result in substantial welfare losses. Given the possibility that weather risks in particular might be further increasing, there is renewed policy attention on improving households’ risk management strategies. This article provides an overview of insights learned from recent randomized control trials on predictions coming out of the theoretical literature on households’ ex ante risk management. It reveals new puzzles and questions regarding households’ inter‐temporal decision making under risk, and draws lessons for effective policy design.

  July 01, 2013   doi: 10.1111/agec.12052   open full text
• Trade liberalization in the bio‐economy: coping with a new landscape.
  Jean‐Christophe Bureau, Sébastien Jean.
  Agricultural Economics. July 01, 2013
  Multilateral trade liberalization has made little progress over the last period, but preferential agreements have multiplied. Recent economic literature helps understand the current negotiation game. New economic and political conditions, in particular the gaining influence of emerging countries, make a multilateral agreement more difficult. Developed countries have given up many of their bargaining chips in previous rounds of negotiation and their remaining agricultural tariffs are not sufficient for extracting the concessions from emerging countries on services, procurement, and intellectual property that would make an agreement possible. The risk of a more fragmented world calls for a revised negotiation agenda and a change in the status of developing countries. Research issues are outlined in order to help revitalize the Doha negotiation agenda.

  July 01, 2013   doi: 10.1111/agec.12061   open full text
• Stocks‐to‐use ratios and prices as indicators of vulnerability to spikes in global cereal markets.
  Eugenio Bobenrieth, Brian Wright, Di Zeng.
  Agricultural Economics. June 28, 2013
  We identify critical stocks‐to‐use ratios (SURs) for major grains and for an index of total calories from these grains. The latter appears to be a promising indicator of vulnerability to large price spikes when the current price shows no cause for concern. More generally, our results suggest that stocks data, though no doubt unreliable, can be valuable complements to price data as indicators of vulnerability to shortages and price spikes.

  June 28, 2013   doi: 10.1111/agec.12049   open full text
• Public agricultural R&D over the past half century: an emerging new world order.
  Philip G. Pardey, Julian M. Alston, Connie Chan‐Kang.
  Agricultural Economics. June 28, 2013
  Recent trends in farm productivity and food prices raise concerns about whether the era of global agricultural abundance is over. Agricultural R&D is a crucial determinant of agricultural productivity and production, and therefore food prices and poverty. In this article, we present entirely new evidence on investments in public agricultural R&D worldwide as an indicator of the prospects for agricultural productivity growth over the coming decades. The agricultural R&D world is changing, and in ways that will definitely affect future global patterns of poverty, hunger, and other outcomes. The overall picture is one in which the middle‐income countries are growing in relative importance as producers of agricultural innovations through investments in R&D, and have consequently better prospects as producers of agricultural products.

  June 28, 2013   doi: 10.1111/agec.12055   open full text
• Agricultural price distortions: trends and volatility, past, and prospective.
  Kym Anderson.
  Agricultural Economics. June 28, 2013
  Historically, earnings from farming in many developing countries have been depressed by a pro‐urban bias in own‐country policies, as well as by governments of richer countries favoring their farmers with import barriers and subsidies. Both sets of policies reduced global economic welfare and agricultural trade, and added to global inequality and poverty. Over the past three decades, much progress has been made in reducing agricultural protection in high‐income countries and agricultural disincentives in developing countries. However, plenty of price distortions remain. As well, the propensity of governments to insulate their domestic food market from fluctuations in international prices has not waned. Such insulation contributes to the amplification of international food price fluctuations, yet it does little to advance national food security when food‐importing and food‐exporting countries equally engage in insulating behavior. Thus there is still much scope to improve global economic welfare via multilateral agreement not only to remove remaining trade distortions but also to desist from varying trade barriers when international food prices gyrate. This article summarizes indicators of trends and fluctuations in farm trade barriers before examining unilateral or multilateral trade arrangements, together with complementary domestic measures, that could lead to better global food security outcomes.

  June 28, 2013   doi: 10.1111/agec.12060   open full text
• Structural change in urban Chinese food preferences.
  Vardges Hovhannisyan, Brian W. Gould.
  Agricultural Economics. June 27, 2013
  We undertake a range of tests for structural food preference change in urban China, using provincial‐level panel data from 2002 to 2010. We introduce a time transition function into the Generalized Quadratic Almost Ideal Demand System (GQAIDS) to represent consumer preferences. We apply this system to evaluate the demand structure for seven food groups. The use of the GQAIDS specification relaxes many empirical demand system restrictions associated with previous analyses of structural preference change. Our findings suggest that Chinese food preferences are continuing to evolve.

  June 27, 2013   doi: 10.1111/agec.12038   open full text
• Re‐examination of production, cost, and restricted profit functions using quantile regression approach.
  Saleem Shaik.
  Agricultural Economics. June 24, 2013
  This article estimates quantile regressions of production, cost, and restricted profit functions using a Cobb‐Douglas functional form with non‐Hicks neutral technology change. In contrast to previous studies, quantile regression estimates reveal the relationship between the independent (production, cost, and restricted profit) and dependent (input quantities and prices) variables at each quantile of the distribution. An empirical application using data from 48 states in United States from 1960 to 2004 indicates the returns to scale and aggregate technology not only differ across production, cost, and restricted profit functions but across states in different quantiles of the distribution. This suggests the traditional measures of returns to scale and aggregate technology are under‐ and overestimated in states at upper and lower quantiles, respectively.

  June 24, 2013   doi: 10.1111/agec.12041   open full text
• Extent and possible causes of intrayear agricultural commodity price volatility.
  Hervé Ott.
  Agricultural Economics. June 24, 2013
  Wheat, corn, rice, soybeans, and cotton experienced higher volatility in the second half of the 2000s. For the sample at hand, the unit root tests only validate a new period of high volatility for wheat and cotton. If in the next couple of years however, corn, rice and soybeans maintain their higher volatility, a new period of high volatility may also be validated statistically. Regarding the factors driving the intrayear volatility GMM estimates show that “commodity market fundamentals” i.e., the stock‐to‐use ratio and to a lesser extent the degree of internationalization, are the most systematically statistically significant coefficients among commodities. Over time, consecutive low stock‐to‐use ratios and a thin international market provoke typically high volatility. Speculative activity and liquidity in the agricultural derivative market have a stabilizing effect on the spot price, if any. Finally, “common macro” factors significantly impact volatility, especially the volatility of petrol and of exchange rates; their dispersion importance over the sample is quite sizeable. However, it is difficult to establish a link between, on the one hand, loose monetary policy, business cycle and inflation, and, on the other hand, commodity price volatility, as the sign of the estimated coefficient changes depending on the commodity and the estimated elasticities are quite low.

  June 24, 2013   doi: 10.1111/agec.12043   open full text
• Value elicitation for multiple quantities of a quasi‐public good using open ended choice experiments and uniform price auctions.
  Levan Elbakidze, Rodolfo M. Nayga, Hao Li, Chris McIntosh.
  Agricultural Economics. June 24, 2013
  Choice experiments and experimental auctions have become popular mechanisms for estimating willingness to pay (WTP). However, these methods have primarily been used for estimating WTP for single units of goods. We analyze the results from experimental auctions and choice experiments in the context of multiple quantities of a quasi‐public good (animal welfare product). We show that the use of WTP values for a single unit of a product, a common practice in experimental valuation literature, can result in underestimation of aggregate demand. We use and compare open ended choice experiments (OECE), second price Vickrey auctions, and random Nth price auctions as mechanisms for valuing WTP. Our results also suggest that individual level demand estimates from OECE are less elastic than demand estimates from uniform price auctions.

  June 24, 2013   doi: 10.1111/agec.12044   open full text
• Challenges and policy options in the global bio‐economy: introduction and overview.
  Johan Swinnen, Alfons Weersink.
  Agricultural Economics. June 14, 2013
  Agricultural economics is at the nexus of the major policy options surrounding the global bio‐economy. The outputs from agriculture have expanded beyond the traditional food, feed, and fiber to include fuel and other nonfood applications as well as environmental goods due to recent technological developments and changing consumer demands. Numerous policy questions have arisen within the bio‐economy. This article introduces and summarizes several invited panel sessions on issues of special importance in the global bio‐economy: new institutions of dealing with uncertainty and increased volatility related to climate change; structural transformations in agricultural production and food consumption and their effect on development; biofuel policies and development; and determinants of changes in consumer attitudes to new products and technologies.

  June 14, 2013   doi: 10.1111/agec.12021   open full text
• Introduction: rural diversification, secondary towns and poverty reduction: do not miss the middle.
  Luc Christiaensen.
  Agricultural Economics. June 13, 2013
  There is no abstract available for this paper.

  June 13, 2013   doi: 10.1111/agec.12026   open full text
• Smallholder land ownership in Kenya: distribution between households and through time.
  William J. Burke, T. S. Jayne.
  Agricultural Economics. June 11, 2013
  This study uses panel data to demonstrate two dimensions of land ownership: the distribution between households at a given time and changes within a household over time. We note that recognizing the latter dimension is only possible when analyzing rare long‐term panel data. We estimate a model for land ownership using a version of the correlated random effects estimator to uniquely identify the determinants of both dimensions amongst Kenyan smallholders. We find life cycle effects are a key determinant of both distributions, and identify important ways in which initial conditions such as inheritance and off‐farm income relate to the dynamics of ownership. We find that population density is a key determinant of differences between households, but also that a given household's land ownership is not affected in the short term as population density increases around them. Controlling for population density, households own more land when they are closer to road networks where the economic value of land is higher. We find important vulnerabilities for the land security of widows, but this vulnerability is geographically heterogeneous.

  June 11, 2013   doi: 10.1111/agec.12040   open full text
• Reducing nutrient loads from dairy farms: a bioeconomic model with endogenous feeding and land use.
  Janne Antero Helin.
  Agricultural Economics. June 10, 2013
  Growth trends of animal farming pose a threat to water quality around the world. To find cost‐efficient means to reduce nutrient loads from agriculture, detailed information on the abatement measures need to be incorporated in bioeconomic models. This study presents a theoretical framework that covers both animal and crop operations on farms. It describes the farmer decision making problem and incorporates nonlinear functions to capture the economic and biological aspects of the problem. The model is applied to Finnish dairy farms. The abatement cost functions are derived for nitrogen and phosphorus. Results indicate that abatement measures on fields should precede dietary changes.

  June 10, 2013   doi: 10.1111/agec.12039   open full text
• Sparkling wine choice from supermarket shelves: the impact of certification of origin and production practices.
  Mara Thiene, Riccardo Scarpa, Luigi Galletto, Vasco Boatto.
  Agricultural Economics. June 08, 2013
  We report the results of a study based on revealed and stated preference data on choice of Prosecco wines in retail stores close to the origin of production in Northern Italy. Emphasis is placed on ability to reconcile the utility structure of stated preference data with that underlying revealed preference data. We extend the analysis to cover nonattendance of key attributes, such as price and certification of origin, while controlling for the large range of brand effects.

  June 08, 2013   doi: 10.1111/agec.12036   open full text
• Consumer preferences for new technology: apples enriched with antioxidant coatings in Uzbekistan.
  Andrey A. Zaikin, Jill J. McCluskey.
  Agricultural Economics. June 08, 2013
  Food markets in developing countries are experiencing an expansion of new functional products. Even though their market share is small, these food products are usually imported and post a higher price compared to local products. In this article, we investigate the consumer response toward new functional food products in Uzbekistan by focusing on the incorporation of apples enriched with antioxidant coating in the food market. We conduct consumer surveys with two different information treatments. We utilize a dichotomous‐choice contingent valuation methodology to estimate willingness to pay for this product and analyze factors that affect consumer choice. The results suggest that the average Uzbek respondent is willing to purchase functional apples with a 6% discount. The effect of information regarding the potential health benefits of antioxidants is positive and statistically significant. We compare the findings with a previous U.S. study of the same product and discuss how the delivery method provides an additional hurdle in the Uzbek market.

  June 08, 2013   doi: 10.1111/agec.12035   open full text
• Biofuels and developing economies: is the timing right?
  Siwa Msangi, Martin Evans.
  Agricultural Economics. June 08, 2013
  In this article, we discuss some key aspects of biofuel production in developing countries, and where constraints and tradeoffs are likely to occur. We use the example of two countries, Senegal and India, to highlight some of the issues of cost competitiveness, problems with ensuring stable supply of feedstock as well as critical missing links in the biofuels value chain that pose problems to scaling up national programs in these countries. We discuss the particularly problematic nature of jatropha, as a biodiesel feedstock, and underline some helpful guiding principles that can help country‐level policy. We point to an underlying “duality” between a well‐functioning food system and favorable conditions for agribusiness enterprises, such as biofuels, and the relevance it has to achieving food security goals.

  June 08, 2013   doi: 10.1111/agec.12033   open full text
• Land use and economic effects of alternative biofuel policies in Brazil and the United States.
  Hector M. Nuñez, Hayri Önal, Madhu Khanna.
  Agricultural Economics. June 08, 2013
  Being the two largest ethanol producers in the world, biofuel policies in Brazil and the United States affect both their domestic markets and the global food and biofuel economy. In this article we develop a price endogenous mathematical programming model to simulate and analyze the impacts of biofuel mandates and trade distortions on land use, agricultural commodity and transportation fuel markets, and global environment. We find that an 80% increase in total biofuel production from its 103 billion liter baseline level to the mandated 183 billion liter level in 2022 can be achieved with less than 2% increase in total cropland use in both countries. In the United States, this would occur with cellulosic biofuels meeting nearly half of the biofuels consumed and produced largely on cropland pasture and corn ethanol meeting the rest of the mandate and resulting in a 2% increase in corn price. In Brazil, the expansion in sugarcane production would be achieved by reducing land under pasture and a marginal increase in intensification of livestock production. In the aggregate, biofuel policies increase economic surplus in both countries by 1% and redistribute the benefits from agricultural consumers to agricultural producers and the fuel sector. Finally, we also find that full implementation of the mandates in North America, China, and the European Union would reduce the global life‐cycle global greenhouse gas emissions by about 5%.

  June 08, 2013   doi: 10.1111/agec.12032   open full text
• Nonfarm diversification, poverty, economic mobility, and income inequality: a case study in village India.
  , Peter Lanjouw, Rinku Murgai, Nicholas Stern.
  Agricultural Economics. June 08, 2013
  This article assembles data at the all‐India level and for the village of Palanpur, Uttar Pradesh, to document the growing importance, and influence, of the nonfarm sector in the rural economy between the early 1980s and late 2000s. The suggestion from the combined National Sample Survey and Palanpur data is of a slow process of nonfarm diversification, whose distributional incidence, on the margin, is increasingly pro‐poor. The village‐level analysis documents that the nonfarm sector is not only increasing incomes and reducing poverty, but appears as well to be breaking down long‐standing barriers to mobility among the poorest segments of rural society. Efforts by the government of India to accelerate the process of diversification could thus yield significant returns in terms of declining poverty and increased income mobility. The evidence from Palanpur also shows, however, that at the village‐level a significant increase in income inequality has accompanied diversification away from the farm. A growing literature argues that such a rise in inequality could affect the fabric of village society, the way in which village institutions function and evolve, and the scope for collective action at the village level. Failure to keep such inequalities in check could thus undermine the pro‐poor impacts from the process of structural transformation currently underway in rural India.

  June 08, 2013   doi: 10.1111/agec.12029   open full text
• Urbanization and poverty reduction: the role of rural diversification and secondary towns1.
  Luc Christiaensen, Joachim Weerdt, Yasuyuki Todo.
  Agricultural Economics. June 08, 2013
  A rather unique panel tracking more than 3,300 individuals from households in rural Kagera, Tanzania, during 1991/1994–2010 shows that about one out of two individuals/households who exited poverty did so by transitioning out of agriculture into the rural nonfarm economy or secondary towns. Only one out of seven exited poverty by migrating to the big cities, even though those moving to the city experienced on average faster consumption growth. Further analysis of a much larger cross‐country panel of 51 developing countries cannot reject that rural diversification and secondary town development lead to more inclusive growth patterns than metropolitization. Indications are that this follows because more of the poor find their way to the rural nonfarm economy and secondary towns, than to distant cities. The development discourse would benefit from shifting beyond the rural–urban dichotomy and focusing more instead on how best to urbanize and develop its rural nonfarm economy and secondary towns.

  June 08, 2013   doi: 10.1111/agec.12028   open full text
• Agriculture and small towns in Africa.
  Paul Dorosh, James Thurlow.
  Agricultural Economics. June 07, 2013
  Africa is urbanizing rapidly. Yet most dual economy models focus on the sectoral rather than spatial dimensions of development. This article adopts a “dual–dual” approach to measuring rural/urban and farm/nonfarm linkages. We develop an economy‐wide model of Ethiopia that distinguishes between cities, towns, and rural areas. The model captures detailed sectoral and regional linkages, internal migration flows, and externalities from urban agglomeration. We find larger linkages between agricultural production and small towns and show that redirecting urban growth toward towns rather than cities leads to broader‐based economic growth and poverty reduction. In contrast, industry and services, particularly within cities, are far less effective in reaching rural areas and the poor. Africa's current urbanization pattern—toward major cities rather than towns—will weaken national growth–poverty linkages. Urbanization that takes advantage of the synergistic relationship between agriculture and small towns has the potential to result in a more inclusive growth trajectory.

  June 07, 2013   doi: 10.1111/agec.12027   open full text
• Do farm operators benefit from direct to consumer marketing strategies?
  Timothy Park, Ashok K. Mishra, Shawn J. Wozniak.
  Agricultural Economics. June 06, 2013
  Using farm‐level data this study investigates factors associated with the choice of three direct marketing strategies (DMSs). Particular attention is given to the role of management and marketing skills in selection of DMSs. Additionally, the study applies a selectivity‐based approach for the multinomial logit model to assess the relationship between DMSs and the financial performance of the business. Results suggest that both management and marketing skills significantly affect direct‐to‐consumer sales. Farmers choosing the strategy of sales only through direct‐to‐consumer outlets report earnings that are significantly lower than earnings from the other marketing strategies. Marketing skills prove to be beneficial to direct‐to‐consumer (DTC) earnings. Finally, the selectivity correction terms in the direct sales model are significantly negative in the choice of DTC, indicating the presence of sample selection effects. Accounting for selectivity is essential to ensure unbiased and consistent estimates.

  June 06, 2013   doi: 10.1111/agec.12042   open full text
• The impact of OECD biofuels policies on developing countries.
  Harry Gorter, Dusan Drabik, David R. Just, Erika M. Kliauga.
  Agricultural Economics. June 04, 2013
  OECD countries’ biofuels policies, derived from energy and environmental legislation and activated by high oil prices, were the primary cause of not only the sudden spike in grain and oilseed prices in 2007–2008 but also of the ensuing price volatility. Even though developing countries have a comparative advantage in biofuels production, they were shut out of rich countries’ biofuel markets by trade discriminating biofuels policies. Developing countries would not have been able to take full advantage of the price spike in the short run anyway given the low supply elasticities and the long time required for biofuel production to come online, unlike for corn‐ethanol. The controversy over the right price of food is misplaced and policy makers should instead focus on improving biofuels policies, which like their counterpart agricultural policies in previous decades, have damaged the welfare of developing countries.

  June 04, 2013   doi: 10.1111/agec.12031   open full text
• Biofuels policies and developing countries.
  Harry Gorter.
  Agricultural Economics. June 04, 2013
  There is no abstract available for this paper.

  June 04, 2013   doi: 10.1111/agec.12030   open full text
• Productivity, credit, risk, and the demand for weather index insurance in smallholder agriculture in Ethiopia.
  Craig McIntosh, Alexander Sarris, Fotis Papadopoulos.
  Agricultural Economics. May 24, 2013
  The article explores the relationship between fertilizer use and the demand for weather index insurance (WII) among smallholder farmers in Ethiopia. We examine whether fertilizer use is profitable under current smallholder production conditions, whether risk‐related factors affect fertilizer use, and we estimate the returns to inputs in the agricultural production function in the absence of insurance. We then study how these primitives of agricultural production functions relate to insurance demand. The study compares a survey‐based estimate of willingness to pay with actual uptake for the weather insurance, finding the stated and actual demand to be almost completely uncorrelated. While those with high marginal returns to inputs say they would purchase insurance, only those with low marginal returns actually do, consistent with the stated purpose of the product as input insurance. Insurance demand proves to be highly responsive to the existence and amount of randomly allocated insurance vouchers.

  May 24, 2013   doi: 10.1111/agec.12024   open full text
• Weather index insurance for agricultural development: introduction and overview.
  Alexander Sarris.
  Agricultural Economics. May 24, 2013
  This introductory paper highlights the key attributes of weather index insurance, and summarizes the major points and conclusions of the three subsequent papers included in the special issue.

  May 24, 2013   doi: 10.1111/agec.12022   open full text
• Consumer choice and the acceptance of production practice: introduction and overview.
  Jutta Roosen.
  Agricultural Economics. May 17, 2013
  The acceptance of agricultural and food production practice by consumers is crucial for the success of innovation and marketing. This is an introduction to a collection of papers that were presented at the 28th Congress of the IAAE. The papers apply different choice modeling methods in this context in order to study the choice of food products offering credence aspects regarding functionality (health), tracability (safety), and denomination of origin and production practice (tradition) in various countries.

  May 17, 2013   doi: 10.1111/agec.12034   open full text
• The role of certificate issuer on consumers’ willingness‐to‐pay for milk traceability in China.
  Junfei Bai, Caiping Zhang, Jing Jiang.
  Agricultural Economics. May 16, 2013
  In response to increasing concerns about domestic food safety issues, establishing tracking systems in the food industry is mandatorily required under newly launched food safety laws. However, the kinds of monitoring and certification systems that should be set up to ensure practical adoption and the effectiveness of the regulation remain unclear. This study aims to analyze consumers’ preferences for milk traceability, with particular interest in investigating how consumers’ preferences could be affected by monitoring and certification systems of the regarding system. Survey data from a choice‐based conjoint (CBC) experiment are used to achieve this objective. In the experiment, milk is defined by a set of attributes in which we assume that milk traceability can be certified by three entities: the government, an industrial association, and a third party. The CBC data are then analyzed by using the alternative‐specific form of a conditional Logit (McFadden's Choice) model. We found that urban Chinese consumers have a strong desire for traceable milk, but their preference for traceable milk is significantly related to the associated certificate issuers. Currently, the highest willingness‐to‐pay goes to government certificated traceable milk, followed by industrial association certificated and third‐party certificated milks. In the future, however, consumers are likely to give more credit to third‐party certification with rising income and knowledge.

  May 16, 2013   doi: 10.1111/agec.12037   open full text
• Managing basis risk with multiscale index insurance.
  Ghada Elabed, Marc F. Bellemare, Michael R. Carter, Catherine Guirkinger.
  Agricultural Economics. May 16, 2013
  Agricultural index insurance indemnifies a farmer against losses based on an index that is correlated with, but not identical to, her or his individual outcomes. In practice, the level of correlation may be modest, exposing insured farmers to residual, basis risk. In this article, we study the impact of basis risk on the demand for index insurance under risk and compound risk aversion. We simulate the impact of basis risk on the demand for index insurance by Malian cotton farmers using data from field experiments that reveal the distributions of risk and compound risk aversion. The analysis shows that compound risk aversion depresses demand for a conventional index insurance contract some 13 percentage points below what would be predicted based on risk aversion alone. We then analyze an innovative multiscale index insurance contract that reduces basis risk relative to conventional, single‐scale index insurance contract. Simulations indicate that demand for this multiscale contract would be some 40% higher than the demand for an equivalently priced conventional contract in the population of Malian cotton farmers. Finally, we report and discuss the actual uptake of a multiscale contract introduced in Mali.

  May 16, 2013   doi: 10.1111/agec.12025   open full text
• The producer welfare effects of trade liberalization when goods are perishable and habit‐forming: the case of asparagus.
  Peyton Ferrier, Chen Zhen.
  Agricultural Economics. April 13, 2013
  Asparagus is a perishable, highly seasonal crop. We find that out‐of‐season imports of asparagus caused habit formation that increased demand in the U.S. growing seasons. We find that habit effects offset about 64% of the welfare losses to U.S. asparagus producers from increased Mexican imports under NAFTA and all of the U.S. producer welfare losses from increased Peruvian imports under the Andean Trade Preference Act. We estimate that the U.S. producer welfare losses from NAFTA are less than the annualized value of market loss assistance provided them in the 2008 Farm Bill.

  April 13, 2013   doi: 10.1111/agec.12020   open full text
• Demand for meat and dairy products by Turkish households: a Bayesian censored system approach.
  Abdulbaki Bilgic, Steven T. Yen.
  Agricultural Economics. April 12, 2013
  We extend the Tobit (censored) linear equation system procedure to utility‐theoretic demand functions, along with a mapping mechanism to impose the adding‐up restriction implied by consumer utility maximization theory—a theoretical restriction very often ignored in previous empirical studies with censored demand systems. In this context, the Bayesian Markov Chain Monte Carlo (MCMC) procedure is applied to the censored linear approximate almost ideal demand system (LAIDS) for 12 food products, using data from the Turkish Household Expenditure Survey. All own‐price elasticities are negative and expenditure elasticities positive. Uncompensated own‐price elasticities for rural households are generally much higher than those for their urban peers, though demand for most food products are own‐price elastic for both types of households. The differential patterns in demand elasticities between urban and rural households become even more evident (almost twice) as relatively more expensive foodstuffs are consumed, showing that accessibilities to alternative products have made rural Turkish households more cognizant toward price changes in foods. Household characteristics play a key role in food expenditures, notably so in urban areas, and regional and seasonal differences are also present.

  April 12, 2013   doi: 10.1111/agec.12019   open full text
• Political competition and policy choices: the evidence from agricultural protection.
  Jan Fałkowski, Alessandro Olper.
  Agricultural Economics. April 11, 2013
  This article investigates whether political competition plays an important role in determining the level of agricultural protection. In order to do so, we exploit variation in political and economic data from 74 developing and developed countries for the post‐war period. We use two measures of political competition: one that captures the extent to which political power can be freely contested regardless of election results and one based on vote share at last parliamentary elections. Our results, based on static and dynamic panel estimators, show unambiguously that the higher the level of political competitions is, the higher the agricultural protection.

  April 11, 2013   doi: 10.1111/agec.12018   open full text