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Journal of Agricultural Economics

Impact factor: 1.5 5-Year impact factor: 1.679 Print ISSN: 0021-857X Online ISSN: 1477-9552 Publisher: Wiley Blackwell (Blackwell Publishing)

Subject: Economics

Most recent papers:

  • Insurance for Technology Adoption: An Experimental Evaluation of Schemes and Subsidies with Maize Farmers in Mexico.
    Hanna Freudenreich, Oliver Mußhoff.
    Journal of Agricultural Economics. 10 days ago
    For farmers in developing countries, the combination of both risk aversion and the lack of insurance is often a major impediment to adoption of productivity‐enhancing technologies, such as higher yielding hybrid seed. In a framed field experiment with Mexican maize farmers, we investigate whether bundling hybrid seed with an insurance scheme can increase its adoption, while also controlling for risk aversion. We test insurance schemes with different levels of risk coverage and premium subsidies and find that (1) all schemes significantly increase the degree of adoption of the higher yielding seed, (2) partial insurance schemes perform worse than full insurance, (3) weather index insurance with geographical basis risk performs no worse than indemnity insurance, and (4) premium subsidies significantly increase the adoption effect of indemnity insurance, but not that of index insurance.
    July 14, 2017   doi: 10.1111/1477-9552.12226   open full text
  • Consumers’ Preferences for Bread: Transgenic, Cisgenic, Organic or Pesticide‐free?
    Anna K. Edenbrandt, Christian Gamborg, Bo J. Thorsen.
    Journal of Agricultural Economics. July 06, 2017
    Consumers are apprehensive about transgenic technologies, so cisgenics, which limit gene transfers to sexually compatible organisms, have been suggested to address consumer concerns. We study consumer preferences for rye bread alternatives based on transgenic or cisgenic rye, grown conventionally or without the use of pesticides, relative to traditionally bred rye, grown with conventional or organic farming methods. Stated preference (SP) data from a choice experiment are combined with revealed preference (RP) data from market purchases from the same respondents. Results show that respondents prefer pesticide‐free production methods, and that while cisgenics is preferred over transgenics, the majority of respondents favour traditional breeding methods. The distribution in preferences suggests that some respondents prefer bread from cisgenic crops produced without pesticides over traditional crops produced using pesticides. Preferences for organic bread are stronger than for pesticide‐free products. From a policy perspective results suggest that excluding cisgenics from mandatory labeling in the EU, or including it in the voluntary non‐GM labelling in the US, would cause welfare losses for consumers.
    July 06, 2017   doi: 10.1111/1477-9552.12225   open full text
  • Stochastic Frontier Estimation of Market Power in the Food Industries.
    Rigoberto A. Lopez, Xi He, Azzeddine Azzam.
    Journal of Agricultural Economics. June 15, 2017
    We use a modified version of the stochastic frontier model to estimate oligopoly markups above the perfectly competitive frontier, separating out deterministic markups from purely stochastic markups. Using data from 42 US food processing industries between 1990 and 2010, empirical results indicate a widespread incidence of oligopoly power, with Lerner indexes averaging approximately 21%. Further, the estimated markups increase with industrial concentration but decrease with price elasticities and imports. Finally, the estimated Lerner indexes are in the range of previous food industry estimates using New Empirical Industrial Organization (NEIO) models.
    June 15, 2017   doi: 10.1111/1477-9552.12219   open full text
  • Measuring Farm and Market Level Economic Impacts of Improved Maize Production Technologies in Ethiopia: Evidence from Panel Data.
    Menale Kassie, Paswel Marenya, Yohannis Tessema, Moti Jaleta, Di Zeng, Olaf Erenstein, Dil Rahut.
    Journal of Agricultural Economics. June 15, 2017
    While it is often recognised that agricultural technology adoption decisions are intertwined and best characterised by multivariate models, typical approaches to examining adoption and impacts of agricultural technology have focused on single technology adoption choice and ignored interdependence among technologies. We examine farm‐ and market‐level impacts of multiple technology adoption choices using comprehensive household survey data collected in 2010/11 and 2012/13 in Ethiopia. Economic surplus analysis combined with panel data switching endogenous regression models are used to compute the supply shift parameter (K‐shift parameter), while at the same time controlling for the endogeneity inherent in agricultural technology adoption among farmers. We find that our improved technology set choices have significant impacts on farm‐level maize yield and maize production costs, where the greatest effect appears to be generated when various technologies are combined. The change in maize yield and production costs results in an average 26.4% cost reduction per kilogram of maize output (the K‐shift parameter). This increases the producer and consumer surpluses by US$ 140 and US$ 105 million per annum, respectively. These changes in economic surplus help to reduce the number of poor people by an estimated 788 thousand per year. We conclude that deliberate extension efforts and other policies that encourage integration of technologies are important for maize technologies to yield their full potential at both farm and market levels.
    June 15, 2017   doi: 10.1111/1477-9552.12221   open full text
  • Is Passive Farming A Problem for Agriculture in the EU?
    Mark V. Brady, Jordan Hristov, Christoph Sahrbacher, Torben Söderberg, Fredrik Wilhelmsson.
    Journal of Agricultural Economics. June 15, 2017
    We address a new agricultural policy concern following the decoupling of CAP direct payments in 2005: passive farming, whereby landowners maintain their agricultural area to collect payments without producing commodities. It is claimed that passive farming is hindering agricultural development by ‘blocking’ access to farmland for expanding farmers. We evaluate the links between the EU's Single Payment Scheme (SPS), passive farming, land use and agricultural development. Following identification of the rational landowners’ optimal land‐use choice, we evaluate the effects of the SPS using a spatial, agent‐based model that simulates farmers’ competition for land in a case‐study region of Sweden. We show that passive farming does not constrain land from being used in production; on the contrary more land is used than would be the case without the SPS. We conclude that passive farming is not a problem for agriculture, but provides public goods that would otherwise be under provided: preservation of marginal farmland and future food security. However SPS payments on highly productive land inflate land values (capitalisation) and slow structural change, which hinder agricultural development. Consequently CAP goals could be better served by targeting payments on marginal land and phasing out payments to highly productive land.
    June 15, 2017   doi: 10.1111/1477-9552.12224   open full text
  • Price and Volatility Transmission and Market Power in the German Fresh Pork Supply Chain.
    Tsion Taye Assefa, Miranda P.M. Meuwissen, Cornelis Gardebroek, Alfons G.J.M. Oude Lansink.
    Journal of Agricultural Economics. June 14, 2017
    We investigate the relationship between the transmission of price volatility and market power in the German fresh pork supply chain. We use a theoretical model underpinning this relationship followed by an empirical application that uses monthly farm, slaughterhouse and retail pork price data for the period 2000–2011. We examine both the relationships of market power with price level transmission and price volatility transmission in the chain. We use a vector error correction model and least squares regressions to analyse price transmission and price volatility transmissions, respectively. Results show that retail market power limited both types of transmissions. Competition inducing policy measures coupled with measures that support price risk management initiatives of chain actors are suggested.
    June 14, 2017   doi: 10.1111/1477-9552.12220   open full text
  • EU‐wide Economic and Environmental Impacts of CAP Greening with High Spatial and Farm‐type Detail.
    Alexander Gocht, Pavel Ciaian, Maria Bielza, Jean‐Michel Terres, Norbert Röder, Mihaly Himics, Guna Salputra.
    Journal of Agricultural Economics. May 19, 2017
    In this paper we analyse the economic and environmental impacts of CAP greening introduced by the 2013 CAP reform using the CAPRI model. CAPRI captures the farm heterogeneity across the EU and it allows to depict the implementation of the greening measures in high detail while integrating the environmental effects and the market feedback of the simulated policy changes. The simulated results reveal that the economic impacts (land use, production, price and income) of CAP greening are rather small, although some farm types, crops (fallow land and pulses) and Member States may be affected more significantly. The CAP greening will lead simultaneously to a small increase in prices and a small decrease in production. Farm income slightly increases because the price effects offset the production decline. Similarly to economic effects, the environmental impacts (GHG emissions, N surplus, ammonia emissions, soil erosion, and biodiversity‐friendly farming practices) of CAP greening are small, although some regions may see greater effects than others. In general, the environmental effects at EU level are positive on a per hectare basis, but the increase in UAA can reverse the sign for total impacts. Overall, simulated GHG and ammonia emissions decrease in the EU, while the total N surplus, soil erosion and biodiversity‐friendly farming practices indicator slightly increase due to the CAP greening.
    May 19, 2017   doi: 10.1111/1477-9552.12217   open full text
  • Volatility Effects of Index Trading and Spillovers on US Agricultural Futures Markets: A Multivariate GARCH Approach.
    Ana I. Sanjuán‐López, Philip J. Dawson.
    Journal of Agricultural Economics. May 12, 2017
    We examine the effects of speculation in the form of index trading on contemporaneous returns and volatility on corn, soybeans and wheat futures markets on the Chicago Board of Trade using multivariate generalised autoregressive conditional heteroscedasticity models and weekly data for 2006–2014. We also assess spillovers. Results are threefold. First, contemporaneous effects of index trading on own returns are positive and inelastic, and they are partially mitigated in the following week. Second, volatility depends positively on own past volatility, and volatility spillovers are limited. Third, index trading reduces own volatility.
    May 12, 2017   doi: 10.1111/1477-9552.12216   open full text
  • The Impact of Biofuel Policies on Crop Acreages in Germany and France.
    Cornelis Gardebroek, Jeffrey J. Reimer, Lieneke Baller.
    Journal of Agricultural Economics. May 05, 2017
    A major concern about biofuels is that increasing biofuel feedstock demand reduces availability of crops for food and feed leading to higher food prices. This paper investigates relations between biofuel policies and prices of rapeseed, the major feedstock used for biodiesel production in Europe, and the impact of rapeseed prices on crop acreages in Germany and France. Biodiesel is an important biofuel in Europe, and Germany and France are the largest biodiesel producers in Europe. First, the various biofuel policies in Germany and France are discussed, followed by an analysis of their effects on rapeseed prices. Although theory indicates that such effects exist, we could not find empirical evidence for them. Second, using regional land use panel data from Germany and France we investigate empirically whether crop shares have been affected by rapeseed prices in the period 2000–2015 and whether these price effects changed because of biofuel policy changes. Results show that wheat shares in Germany and France did respond to rapeseed prices, but barley shares did not. Moreover, mandatory blending introduced in Germany in 2007 and production quotas introduced in France in 2005 led to a stronger effect of rapeseed prices on wheat shares, but again did not affect barley shares.
    May 05, 2017   doi: 10.1111/1477-9552.12218   open full text
  • Assessing the Income Effects of Group Certification for Smallholder Coffee Farmers: Agent‐based Simulation in Uganda.
    Evgeny Latynskiy, Thomas Berger.
    Journal of Agricultural Economics. February 22, 2017
    Voluntary sustainability standards, aimed at improving the environmental, social and economic aspects of agricultural production and trade, are becoming increasingly common. The coffee sector is a prime example, where sustainability certification could improve livelihoods for poor smallholders. However, as individual production volumes are low, smallholder farmers need to cooperate in certification as a group, which makes impact assessment more complicated. Previous empirical studies, reporting premia of up to 30%, have neglected the costs associated with group certification. We explore the issue using an agent‐based simulation of coffee producer organisations in Uganda, including the certification‐related costs for farmers. Our results suggest that certification can have a small positive impact on participating households. But the added value of certification is substantially lower than the price premium, because of certification costs. Increasing both the membership of the producer groups and their deliveries of certified coffee are necessary to improve the rewards of certification.
    February 22, 2017   doi: 10.1111/1477-9552.12212   open full text
  • Protest Responses and Willingness to Accept: Ecosystem Services Providers’ Preferences towards Incentive‐Based Schemes.
    Anastasio J. Villanueva, Klaus Glenk, Macario Rodríguez‐Entrena.
    Journal of Agricultural Economics. February 16, 2017
    The identification and treatment of protest responses in stated preference surveys has long been subject to debate. We analyse protest responses while investigating ecosystem services providers’ preferences for incentive‐based schemes. We use a choice experiment for olive farmers’ preferences for agri‐environmental scheme participation in southern Spain. Our two main objectives are: first, to identify and discuss a range of possible motives for protest responses that emerge in a WTA context; second, we analyse the impact on WTA estimates of censoring serial non‐participation linked to protest or high compensation requirements (very high takers). Using a random parameter logit model in WTA space, we find that the inclusion or exclusion of serial non‐participants in the analysis can have a significant impact on marginal and total WTA estimates. Based on the findings, the paper makes recommendations on how to reduce the incidence of protest responses through survey design, regarding the identification of protesters as opposed to very high takers, and regarding the treatment of both groups of respondents for WTA estimation.
    February 16, 2017   doi: 10.1111/1477-9552.12211   open full text
  • Innovation and University‐Firm R&D Collaboration in the European Food and Drink Industry.
    Ornella W. Maietta, Cristian Barra, Roberto Zotti.
    Journal of Agricultural Economics. February 15, 2017
    In the National Innovation System (NIS), knowledge is produced and accumulated through interactive innovation processes that are embedded in a national context, which in turn may help determine innovation. This paper investigates how product and process innovations in the European food and drink industry are affected by: (i) NIS structure; (ii) NIS output in terms of scientific publications and the supply of graduates; (iii) NIS cohesion and coordination; (iv) NIS scientific impact and specialisation. The main source of data on innovation by firms is the EU‐EFIGE/Bruegel‐UniCredit dataset. This is supplemented by information from the International Handbook of Universities, Eurostat and a bibliometric analysis of academic research output. Our results suggest that large research institutions in the public sector may well be detrimental to interaction between university and industry and to process innovation. The indicators used for public research assessment are not necessarily the most appropriate proxies of local knowledge spillovers.
    February 15, 2017   doi: 10.1111/1477-9552.12208   open full text
  • Public Preferences and Willingness to Pay for Forest Disease Control in the UK.
    Oleg Sheremet, John R. Healey, Christopher P. Quine, Nick Hanley.
    Journal of Agricultural Economics. February 14, 2017
    Invasive pests and diseases in trees impose a range of costs on society related to reductions in timber values, impacts on recreational opportunities and effects on forest biodiversity. These costs need to be considered when assessing control options and developing public policy. We investigate the preferences and willingness to pay of the UK general public for a range of forest disease control measures using a choice experiment with a sample of 605 people. Respondents were relatively well informed about general tree disease‐related issues, such as causes and general measures to minimise the risk of disease spread. They were less knowledgeable about specific tree diseases, with Dutch elm disease and chalara ash dieback being the most well known. We find that disease control programmes in publicly‐owned forests and forests owned by charitable trusts are more likely to be supported by the public than equivalent control programmes in privately‐owned and/or commercial forests. The nature of scientific uncertainty about diseases does not affect peoples’ preferences for disease control measures significantly. Higher respondent income, greater ex‐ante knowledge about tree diseases, and more frequent visits to forests are correlated with greater willingness to support publicly‐funded tree disease control programmes in forests. Better knowledge about tree diseases also improves the clarity of respondents’ choices. We find a negative sentiment against some disease control measures, such as clear felling of a forest, and chemical or biocide spraying. We conclude that there is significant public support for part‐financing forest disease control policies in the UK, but that this is conditional on forest ownership and the type of control measures used.
    February 14, 2017   doi: 10.1111/1477-9552.12210   open full text
  • Are In‐House and Outsourcing Innovation Strategies Correlated? Evidence from the European Agri‐Food Sector.
    Valentina C. Materia, Stefano Pascucci, Liesbeth Dries.
    Journal of Agricultural Economics. January 26, 2017
    We analyse European agri‐food firms’ choices about innovation in‐house or through outsourcing and provide empirical evidence about the correlation between these strategies. The relationship between the innovation strategy and firm‐, industry‐ and innovation‐specific characteristics is analysed through a bivariate probit model, which uses firm data from the EFIGE Bruegel‐UniCredit dataset. Transaction cost, resource base and knowledge governance arguments are used to explain the choice of innovation strategy. Our results show that the decisions to innovate in‐house or through outsourcing are independent from each other. In addition, we find that several organisational characteristics such as communication systems, human resource practices and specialisation are likely to influence both strategies. Conversely, organisational characteristics such as the allocation of authority and the business network do not seem relevant in determining the innovation strategies of the European agri‐food sector.
    January 26, 2017   doi: 10.1111/1477-9552.12206   open full text
  • How Competitive is the EU's Agri‐Food Sector? An Introduction to a Special Feature on EU Agri‐Food Competitiveness.
    David Harvey, Carmen Hubbard, Matthew Gorton, Barbara Tocco.
    Journal of Agricultural Economics. January 26, 2017
    There is no abstract available for this paper.
    January 26, 2017   doi: 10.1111/1477-9552.12215   open full text
  • Capitalisation of the SPS into Agricultural Land Rental Prices under Harmonisation of Payments.
    H. Allen Klaiber, Klaus Salhofer, Stanley R. Thompson.
    Journal of Agricultural Economics. January 17, 2017
    As the 2013 Reform of the Common Agricultural Policy (CAP) calls for the harmonisation of Single Payment Scheme (SPS) payments, we estimate the implications of this mandate on agricultural land rental rates over time as Germany began harmonising payments in 2010. Using Bavarian farm‐level panel data we find strong capitalisation effects that increase substantially in the years following 2009. On average, the marginal effect on rental rates of an additional SPS euro is 37 cents, growing over time to 53 cents as harmonisation develops.
    January 17, 2017   doi: 10.1111/1477-9552.12207   open full text
  • Quality Upgrades of EU Agri‐Food Exports.
    Štefan Bojnec, Imre Fertő.
    Journal of Agricultural Economics. December 07, 2016
    We investigate determinants of quality upgrades in EU agri‐food exports using panel data models for the period 2000–2011. By employing highly disaggregated data we show that the unit value of exports is positively correlated to level of economic development and size of population. Our results highlight the negative impacts of comparative advantage and trade costs on upgrades in export quality. Our analysis partly confirms the role of income distribution in quality specialisation, that greater income inequality increases specialisation in quality upgrades. Findings are robust when applied to alternative subsamples, including vertically specialised and final agri‐food products.
    December 07, 2016   doi: 10.1111/1477-9552.12204   open full text
  • Risk Behaviours and Grazing Land Management: A Framed Field Experiment and Linkages to Range Land Condition.
    Daniel Gregg, John Rolfe.
    Journal of Agricultural Economics. November 29, 2016
    We use a framed field experiment considering hypothetical stocking rate decisions made by grazing enterprise managers and estimate non‐linear multinomial logit models for a range of nested non‐expected utility and expected utility models. The risk and decision‐bias parameters for five models estimated for individual responses are shown to be significantly related to land condition but in ways which suggest behavioural aspects of decision making are critical in understanding land management and stocking rate decisions. Our results show that individual heterogeneity in decision making amongst farming groups is likely to be a significant source of variation in farming intensity and technology adoption decisions. This heterogeneity does not appear to be a reflection of socio‐demographic characteristics. Furthermore, decision functions appear to be biased toward selection of simpler representative functions (e.g. Expected Utility) for sample averages. This suggests that experimental findings that Expected Utility is representative for actual decisions may be due to sample averaging rather than reflect actual behaviour.
    November 29, 2016   doi: 10.1111/1477-9552.12201   open full text
  • The Role of Non‐Use Values in Dairy Farmers’ Willingness to Accept a Farm Animal Welfare Programme.
    Julia A. Schreiner, Sebastian Hess.
    Journal of Agricultural Economics. November 23, 2016
    Choice experiments about a hypothetical farm animal welfare (FAW) programme were presented to a sample of randomly selected German dairy farmers. Based on the theory of social interactions, it was hypothesised that the probability of participating in the programme would increase with (i) the ease of implementing programme attributes on the farm, (ii) perceived use values such as increased milk yield, and (iii) stated levels of non‐use existence values derived from improved animal welfare conditions and extrinsically motivated non‐use values from enhanced prestige among relevant peer groups. It was found that non‐use existence values were negatively related to programme acceptance because relatively high personal standards may not be in line with the programme design and may make the programme seem unnecessary. In addition, the intention of enhancing public acceptance of dairy farming appeared to have an influence on some farmers’ willingness to accept the programme, which can be explained by the relevance of social interactions among peers in the context of farmers’ provision of FAW.
    November 23, 2016   doi: 10.1111/1477-9552.12203   open full text
  • Worth the Risk? The Behavioural Path to Well‐Being.
    Peter Howley, Emma Dillon, Kevin Heanue, David Meredith.
    Journal of Agricultural Economics. November 22, 2016
    There is increasing interest in the ‘economics of happiness’, reflected in the volume of articles appearing in mainstream economics journals exploring the major determinants of self‐reported well‐being. We contribute by exploring the factors influencing how satisfied farmers are with their quality of life. We find that farm income, subjective perceptions relating to the adequacy of household income, debt, health and personal characteristics such as age and relationship status are significantly associated with farmers’ self‐reported life satisfaction. While significantly associated with farm income, farm structural variables such as farm size, farm type and the presence of a farm successor were not found to be significantly related with life satisfaction. Our results also suggest that farmers who are more risk averse enjoy significantly lower levels of both life satisfaction and farm income than their more risk seeking or risk neutral counterparts. We suggest that, in the same way that risk aversion inhibits farmers from making choices that could lead to an increase in their income, it may also constrain farmers (and the wider public at large) from engaging in certain types of behaviours that could lead to an increase in their self‐reported quality of life. Finally, we find that while farm income is significantly related to self‐reported life satisfaction, the direct correlation between these variables is weak, suggesting that farmer life satisfaction can be distinct from business success.
    November 22, 2016   doi: 10.1111/1477-9552.12202   open full text
  • The Impact of an EU–US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets.
    John C. Beghin, Jean‐Christophe Bureau, Alexandre Gohin.
    Journal of Agricultural Economics. November 21, 2016
    We assess the impact of a potential TTIP bilateral free trade agreement on the EU and US bio‐economies (feedstock, biofuels, by‐products, and related competing crops) and major trade partners in these markets. The analysis develops a multi‐market model that incorporates bilateral trade flows (US to EU, EU to US, and similarly with third countries) and is calibrated to the OECD‐FAO baseline for 2013–2022 to account for recent policy decisions. The major policy reforms from a TTIP involve tariff and TRQ liberalisation and their direct contractionary impact on US sugar supply, EU biofuel production, and indirect negative effect on US high fructose corn syrup (HFCS) production. EU sugar and isoglucose production expand along with US ethanol and biodiesel and oilseed crushing. EU sugar would flow to the US, US biofuels and vegetable oil to the EU. We further quantify non‐tariff measures (NTM) affecting these trade flows between the EU and the US. EU oilseed production contracts, and EU crushing expands with improving crushing margins following reduced NTM frictions. Our analysis reveals limited net welfare gains with most net benefits reaped by Brazil and not the two trading partners of the TTIP.
    November 21, 2016   doi: 10.1111/1477-9552.12200   open full text
  • Pricing‐To‐Market Analysis: The Case of EU Wheat Exports.
    Philip Dawson, Matthew Gorton, Carmen Hubbard, Lionel Hubbard.
    Journal of Agricultural Economics. October 10, 2016
    The EU is a major player in the global wheat market. This paper examines the pricing behaviour of EU wheat exporters using a pricing‐to‐market (PTM) analysis. Wheat is an exemplary product for testing PTM theories as it is widely and frequently traded, and largely unbranded. We estimate the relationship between export unit values and exchange rates using quarterly panel data for 11 EU export destinations for 2000–2013. Results show that there is a meaningful long‐run relationship between export unit values and exchange rates, but there is little evidence of differential mark‐ups between EU export markets. Belarus and Iceland are exceptions where exporters from the EU appear to exercise local currency price stabilisation.
    October 10, 2016   doi: 10.1111/1477-9552.12199   open full text
  • Catching Up or Falling Behind in European Agriculture: The Case of Milk Production.
    Lukas Cechura, Aaron Grau, Heinrich Hockmann, Inna Levkovych, Zdenka Kroupova.
    Journal of Agricultural Economics. September 14, 2016
    The paper explores and analyses the catching up and falling behind processes in the European dairy sector over the period 2004–2011, using a stochastic metafrontier multiple output distance function for 24 EU Member States. The metafrontier estimates reveal considerable productivity differences in milk production across the EU at the regional (NUTS‐2) level. Milk yield per cow is the highest in the old Member States, especially in those regions located in the northwest of the EU, while the lowest productivity is observed in Eastern Europe. The same structure was found for both the TFP (Total Factor Productivity) levels and TFP growth. Moreover, the results for technical change suggest that farm sizes are not optimal in many regions in Central and Eastern Europe from a dynamic perspective. The comparative analysis suggests that in the new compared to the old Member States, fewer farms could benefit from the movement of the frontier. Moreover, there are no signs that poorly performing farms are catching up with the best performing farms in the EU regions/countries.
    September 14, 2016   doi: 10.1111/1477-9552.12193   open full text
  • Income Mobility and Income Inequality in Scottish Agriculture.
    Paul Allanson, Kalina Kasprzyk, Andrew P. Barnes.
    Journal of Agricultural Economics. September 14, 2016
    The paper explores the distributional consequences of farm income mobility in Scotland, focusing on the extent to which farm income inequality is a chronic as opposed to a temporary phenomenon and on the nature of the dynamic processes driving changes in farm income inequality over time. The empirical results reveal that the majority of farm income inequality was long‐run or structural in nature, reflecting differences in both farm business size and farm‐specific factors such as land quality, managerial ability and business structures. Evidence of absolute convergence in farm incomes is explained by short‐run adjustments towards equilibrium or target incomes conditional upon prices, technology and farm business size, with farm business growth conditional upon survival found to have had no significant redistributive effect.
    September 14, 2016   doi: 10.1111/1477-9552.12192   open full text
  • Bubbles, Froth and Facts: Another Look at the Masters Hypothesis in Commodity Futures Markets.
    Dwight R. Sanders, Scott H. Irwin.
    Journal of Agricultural Economics. September 09, 2016
    The Masters Hypothesis suggests that long‐only index funds were the main cause of a massive increase in commodity prices in 2007–2008 and 2011–2012. Central to the Masters Hypothesis are three basic tenets: (i) long‐only commodity index funds were directly responsible for driving futures prices higher; (ii) the deviations from fundamental value were economically very large; (iii) the impact was pervasive across commodity futures markets. There has been a great deal of empirical research on the Masters Hypothesis and commodity market bubbles. However, surprisingly few studies have found evidence that directly support the main tenets of the Masters Hypothesis. Some have attributed the lack of supporting evidence to the low‐power of time‐series tests, market efficiency issues and a lack of conditioning variables within models. In this paper, we address each of these issues using updated data and new empirical approaches. Still, price behaviour consistent with the Masters Hypothesis is surprisingly difficult to find in the data. This is an important finding given the on‐going policy debate and regulations proposed or being implemented to limit speculative positions in these markets.
    September 09, 2016   doi: 10.1111/1477-9552.12191   open full text
  • Efficiency Effects of Access to Information on Small‐scale Agriculture: Empirical Evidence from Uganda using Stochastic Frontier and IRT Models.
    Yakubu Abdul‐Salam, Euan Phimister.
    Journal of Agricultural Economics. September 09, 2016
    Low power home electrical items such as radios, mobile phones and televisions are an important source of agricultural information for small‐scale farmers in developing countries. To empirically test the effects of access to information from these items on efficiency in agriculture, we formulate a stochastic frontier model augmented with a technical efficiency model that controls for an index capturing farmers' ‘ability to access information’. The index is constructed with a 2‐parameter item response theory (IRT) model based on farmers' access to the electrical items. Using six rounds of panel data on small‐scale farmers in Uganda, we find empirical evidence of a significant and positive relationship between farmer ability to access information and farm efficiency. There is also evidence that the size of these effects is larger for more literate hence better educated farmers. Greater access to information also appears to be associated with increased variance of (in)efficiency and output although the form of the increased variances is underpinned by low risk of lower efficiency and output realisations and high likelihood of higher efficiency and output realisations. Our findings imply that access to limited quantities of electricity needed to power these electrical items can have positive farm efficiency effects, and hence the importance of off‐grid electricity (e.g. standalone solar panels) for small‐scale farmers in typically isolated communities in developing countries.
    September 09, 2016   doi: 10.1111/1477-9552.12194   open full text
  • Choice of Rice Production Practices in Ghana: A Comparison of Willingness to Pay and Preference Space Estimates.
    Rebecca Owusu Coffie, Michael P. Burton, Fiona L. Gibson, Atakelty Hailu.
    Journal of Agricultural Economics. August 22, 2016
    Rice has been identified as an important food security crop in Ghana. However, there is a production deficit and new technologies to reduce the deficit are not widely adopted. Although poor adoption by farmers’ is often linked to constraints such as access to information, farmers’ perceptions of the technologies are also important. We apply an advanced discrete choice experiment to evaluate farmers’ preferences for rice production practices. Specifically, we generate willingness to pay (WTP) estimates using willingness to pay space (WS) and compare these with values from the indirect or preference space (PS) method. Our modelling also accounts for the effects on WTP estimates of farmers’ stated attribute importance (SAI) information. Empirical results from WS and PS models reveal that on average, farmers value higher yields and are negatively affected by higher risk of crop failure and labour requirements. Comparing the performance of the two models, we find the WS model provides a superior fit to our data and reduces the likelihood of producing implausible WTP estimates. Further, SAI inclusion did not produce much variation in our WTP estimates.
    August 22, 2016   doi: 10.1111/1477-9552.12180   open full text
  • To Mix or Specialise? A Coordination Productivity Indicator for English and Welsh farms.
    Frederic Ang, Pieter Jan Kerstens.
    Journal of Agricultural Economics. August 22, 2016
    This paper introduces a nonparametric measure of coordination productivity growth where the subprocesses are explicitly modelled in the production technology. The coordination productivity indicator is decomposed into a coordination technical inefficiency change component and a coordination technical change component. This decomposition allows assessment of reallocation impacts on the different sources of productivity growth. The empirical application focuses on a large panel of English and Welsh farms over the period 2007–2013. The results show that coordination inefficiency significantly increases with the proportion of resources allocated to livestock production in economic and statistical terms. Coordination inefficient farms should generally allocate more land to crop production. Depending on the region, the average coordination productivity growth ranges from −9.7% to 15.9% per year. It is driven by coordination technical change rather than coordination inefficiency change.
    August 22, 2016   doi: 10.1111/1477-9552.12177   open full text
  • Input‐Specific Dynamic Productivity Change: Measurement and Application to European Dairy Manufacturing Firms.
    Magdalena Kapelko, Alfons Oude Lansink, Spiro E. Stefanou.
    Journal of Agricultural Economics. August 11, 2016
    We propose a new method for measuring and decomposing input‐specific productivity change in a dynamic context. The resulting input‐specific dynamic Luenberger productivity change indicator is decomposed to identify the contributions of input‐specific dynamic technical, technical inefficiency and scale inefficiency changes. The empirical application of the paper focuses on panel data of large firms in the European dairy processing industry over the period 2005–2012. The results show similar patterns for dynamic input‐specific productivity change and its components for labour across European regions (Eastern, Western and Southern), while differences between regions are found regarding materials and investments.
    August 11, 2016   doi: 10.1111/1477-9552.12188   open full text
  • R&D and Innovation in Food Processing Firms in Transition Countries.
    Pascal L. Ghazalian, Ali Fakih.
    Journal of Agricultural Economics. August 11, 2016
    We examine the implications of the liberalised economic conditions associated with the economic transformations in the transition countries of Central and Eastern Europe (CEE) and Commonwealth of Independent States (CIS) for R&D and innovation in the food processing sector. We use a dataset derived from the World Bank's Business Environment and Enterprise Performance Surveys (BEEPS) database to examine the relationships between R&D/innovation activities in food processing firms in transition countries and (i) privatisation, (ii) foreign direct investment, (iii) trade activities, (iv) market competition pressure, and (v) economies of scale. The empirical analysis is implemented through: (i) a double‐hurdle model for R&D participation and expenditures, and (ii) a bivariate probit model for product and process innovation. We find that these economic transformations generally promote R&D/innovation activities in the food processing sector. Our results suggest that broadened and deepened economic liberalisation policies would improve the innovation performance of the food processing sector in transition countries, and would enhance competitiveness in domestic and foreign markets. They also indicate that innovation policies may need to be tailored to market and industrial characteristics of different transition regions.
    August 11, 2016   doi: 10.1111/1477-9552.12186   open full text
  • Importing High Food Prices by Exporting: Rice Prices in Lao PDR.
    Dick Durevall, Roy Weide.
    Journal of Agricultural Economics. August 04, 2016
    Lao PDR has extensive export controls on its staple food, glutinous rice, which keep domestic prices low relative to international prices. Using price, harvest, and export data this paper analyses how glutinous rice prices in Laos PDR are related to those in its trading partners, Thailand and Vietnam. We find that rice prices in Lao PDR are more likely to rise following a good harvest year than a bad or a normal year. This is consistent with export controls being relaxed after good harvests, leading to an increase in exports early in the season and rising prices later as stocks are depleted. There is thus a case for removal of trade restrictions since they give rise to price spikes while keeping the long‐term price of glutinous rice low, and thereby hinder increases in income from agriculture. However, since high rice prices are likely to affect the poor negatively in the short to medium term, a combination of an export tax and cash transfers is recommended during the transition period. Although this is a case study of Lao PDR, the findings may equally apply to other developing countries that export their staple food.
    August 04, 2016   doi: 10.1111/1477-9552.12179   open full text
  • German and British Consumer Willingness to Pay for Beef Labeled with Food Safety Attributes.
    Karen E. Lewis, Carola Grebitus, Gregory Colson, Wuyang Hu.
    Journal of Agricultural Economics. August 04, 2016
    The European Union has implemented some of the most stringent food safety policies for beef globally, ranging from banning growth hormones to mandating country of origin labeling. Using choice experiments and random parameter logit models, we examine German and British consumer willingness to pay (WTP) for American, Canadian, Argentinian, French, German and British beef, quality assurance seals, hormone‐free beef production and a gourmet label. We also determine how consumer WTP for these food safety and quality attributes is affected by the extent to which consumers consider food safety issues (FSI). Results indicate that British consumers had the lowest WTP for beef from Argentina and German consumers had the lowest WTP for beef from Great Britain. The hormone‐free label was the relatively most preferred label by consumers in both countries, and by those who considered FSI to affect their meat consumption patterns.
    August 04, 2016   doi: 10.1111/1477-9552.12187   open full text
  • The Sustainability of the Farm‐level Impact of Bt Cotton in China.
    Fangbin Qiao, Jikun Huang, Caiping Zhang.
    Journal of Agricultural Economics. July 25, 2016
    The short‐run impact of Bt cotton adoption has been well documented; however, the sustainability of the impact remains unclear. In particular, pest resistance build‐up and secondary pest outbreaks have caused concern regarding the sustainability of this benefit. This paper analyses the effects and impact dynamics of Bt cotton adoption in China. Using six unique waves of panel data collected between 1999 and 2007, we show that the benefits of Bt cotton continue 10 years after it has been commercialised, albeit with evidence of a decline in the benefit since the early adoption period. Importantly, we also show that the benefit has been shared by both Bt and non‐Bt cotton adopters.
    July 25, 2016   doi: 10.1111/1477-9552.12182   open full text
  • What is the Appropriate Counterfactual When Estimating Effects of Multilateral Trade Policy Reform?
    Kym Anderson, Hans Grinsted Jensen, Signe Nelgen, Anna Strutt.
    Journal of Agricultural Economics. July 25, 2016
    Multilateral trade reforms, such as may eventually emerge from the WTO's Doha Development Agenda (DDA), tend to be phased in over a decade or so after agreement is reached. Given the DDA's slow progress, that implementation may not be completed before the end of the next decade. Ex‐ante analysis of the DDA's possible effects thus requires first modelling the world economy to 2030 and, in that process, projecting what trade‐related policies might be by then without a DDA. Typically, modellers assume the counterfactual policy regime to be a ‘business‐as‐usual’ projection assuming the status quo. Yet we know developing country governments tend to switch from taxing to assisting farmers in the course of economic development. This paper shows the difference made by including political economy‐determined agricultural protection growth endogenously in the baseline projection. We reveal that difference by projecting the world economy to 2030 using the Global Trade Analysis Project (GTAP) model with those two alternative policy regimes and then simulating a move to global free trade (the maximum benefit from a multilateral trade reform) in each of those two cases. The welfare effects of removing the counterfactual price distortions in 2030 are shown to be much larger in the case where agricultural protection grows endogenously than in the case assuming no policy changes over the projection period. This suggests the traditional way of estimating effects of a multilateral agricultural trade agreement may considerably understate the potential welfare gains.
    July 25, 2016   doi: 10.1111/1477-9552.12181   open full text
  • Are We Moving Towards Functioning Agricultural Markets and Trade Relations?
    Stephan Brosig, Thomas Glauben, Inna Levkovych, Sören Prehn, Ramona Teuber.
    Journal of Agricultural Economics. July 21, 2016
    We introduce a special feature on the functioning of international agricultural markets. This feature is motivated by the increased interest in the functioning of commodity markets raised by unprecedented price turbulences since 2008, major structural changes through changed roles of emerging economies and related concerns regarding food security. We argue that the delineation of non‐functioning markets from markets that adequately adjusted to adverse framework conditions lacks theoretical foundation. We discuss the relevance of some results on institutions for agricultural markets in emerging and transition countries. A synthesis of the articles included in the special feature is provided by highlighting the selection of topics that span a topical range covering price formation on world and domestic markets, market power and trade policy modelling.
    July 21, 2016   doi: 10.1111/1477-9552.12183   open full text
  • The Costs of Coexistence Measures for Genetically Modified Maize in Germany.
    Thomas J. Venus, Koen Dillen, Maarten J. Punt, Justus H. H. Wesseler.
    Journal of Agricultural Economics. July 18, 2016
    We estimate the perceived costs of legal requirements (‘coexistence measures’) for growing genetically modified (GM) Bt maize in Germany using a choice experiment. The costs of the evaluated ex‐ante and ex‐post coexistence measures range from zero to more than €300 per measure and most are greater than the extra revenue the farmers in our survey expect from growing Bt maize or than estimates in the literature. The cost estimates for temporal separation, the highest in our evaluation, imply that the exclusion of this measure in Germany is justified. The costliest measures of the ones that are currently applied in Germany are joint and strict liability for all damages. Our results further show that neighbours do not cause a problem and opportunities for reducing costs through agreements with them exist. Finally, we find that farmers’ attitudes towards GM crops affect the probability of adoption of Bt maize. Our results imply that strict liability will deter the cultivation of Bt maize in Germany unless liability issues can be addressed through other means, for example, through neighbours agreements.
    July 18, 2016   doi: 10.1111/1477-9552.12178   open full text
  • A Question of Integrity: Variants of Bt Cotton, Pesticides and Productivity in Pakistan.
    Xingliang Ma, Melinda Smale, David J. Spielman, Patricia Zambrano, Hina Nazli, Fatima Zaidi.
    Journal of Agricultural Economics. July 04, 2016
    Bt cotton remains one of the most widely grown biotech crops among smallholder farmers in lower income countries, and numerous studies attest to its advantages. However, the effectiveness of Bt toxin, which depends on many technical constraints, is heterogeneous. In Pakistan, the diffusion of Bt cotton occurred despite a weak regulatory system and without seed quality control; whether or not many varieties sold as Bt are in fact Bt is also questionable. We utilise nationally representative sample data to test the effects of Bt cotton use on productivity. Unlike previous studies, we invoke several indicators of Bt identity: variety name, official approval status, farmer belief, laboratory tests of Bt presence in plant tissue, and biophysical assays measuring Bt effectiveness. Only farmer belief affects cotton productivity in the standard production model, which does not treat Bt appropriately as damage‐abating. In the damage control framework, all Bt indicators reduce damage from pests. Biophysical indicators have the largest effect and official approval has the weakest. Findings have implications for impact measurement. For policy‐makers, they suggest the need, on ethical and productivity grounds, to improve variety information and monitor variety integrity closer to point of sale.
    July 04, 2016   doi: 10.1111/1477-9552.12174   open full text
  • Price Transmission in Nigerian Food Security Crop Markets.
    Patrick L. Hatzenbuehler, Philip C. Abbott, Tahirou Abdoulaye.
    Journal of Agricultural Economics. June 28, 2016
    This paper comprehensively examines price transmission from world, neighbour country, and internal commercial hub markets to Nigerian urban markets, as well as from urban to rural markets within the country, for seven key food security crops (maize, millet, sorghum, rice, cassava, yams and cowpeas). There are three key findings: (i) tradability matters for price transmission, but tradability varies across crops and regions. The strongest international linkages are with neighbouring countries. Rice price transmission is high across all markets, while coarse grain price correspondence is low with world prices but high with neighbour country market prices; (ii) our results imply that local conditions matter for price transmission, and are relatively more important than trade for some crops (e.g. yams, cassava) than others (e.g. imported rice, maize); (iii) larger than expected long‐run price transmission parameters in world and neighbour countries for rice and coarse grains suggest that, in these select markets, there are either large transactions costs or quality premiums that vary systematically with border prices, and/or mark‐ups captured by traders with market power.
    June 28, 2016   doi: 10.1111/1477-9552.12169   open full text
  • Food Grain Policies in India and their Implications for Stocks and Fiscal Costs: A Dynamic Partial Equilibrium Analysis.
    Marta Kozicka, Matthias Kalkuhl, Jan Brockhaus.
    Journal of Agricultural Economics. June 27, 2016
    We analyse current and possible future reforms of the Indian food policies for the most important staple grains, wheat and rice, within a two‐commodity dynamic partial equilibrium model with stochastic shocks. The model is empirically grounded and reproduces past values well. It uses a new reduced‐form approach to capture private storage dynamics. We evaluate the implementation of the National Food Security Act (NFSA) under several policy measures with the current regime as well as two scenarios with a regime change – implementation of cash transfers and deficiency payments. Implications for market fundamentals and fiscal costs are simulated in the medium term – until 2020/21. The NFSA puts a high pressure on fiscal costs and public stocks. Relying on imports with low support prices results in low fiscal costs and stable, but higher domestic and international prices, and a high risk of zero stocks. A policy strategy to manipulate procurement prices in order to maintain public stocks close to the norms leads to slightly higher fiscal costs with lower, but more volatile prices. The highest domestic price volatility occurs under a strategy which uses export bans in order to maintain sufficient public stocks. A cash‐based regime can bring considerable savings and curb fiscal costs, particularly if targeted to the poor, and would leave sufficient stocks due to higher private stocks.
    June 27, 2016   doi: 10.1111/1477-9552.12176   open full text
  • Price Endogeneity and Food Demand in Urban China.
    Vardges Hovhannisyan, Marin Bozic.
    Journal of Agricultural Economics. June 27, 2016
    Price endogeneity has been ignored in previous analyses of food demand in urban China. We exploit data provided by the China National Bureau of Statistics on agricultural commodity supply shifters and use reduced‐form price equations to account for price endogeneity. Applying our unique econometric approach to the analysis of provincial‐level food demand in China, we find strong statistical evidence of price endogeneity. Models that ignore price endogeneity result in substantially biased elasticities and misleading estimates of future food demand in China.
    June 27, 2016   doi: 10.1111/1477-9552.12175   open full text
  • Rural Development Programmes and Transaction Effects: Reflections on Maltese and English Experience.
    Janet Dwyer, John Powell.
    Journal of Agricultural Economics. June 27, 2016
    New institutional economics, and transaction effects in particular, are highly relevant to public policy performance. The evolution of EU rural development policy has generated both increasing complexity and increased transaction costs. However, this policy evolution also creates opportunities for improvement of policy process management. The paper considers these opportunities in the case of Rural Development Programmes (RDPs) under Pillar 2 of the CAP. We examine the influence of transaction effects on RDP performance, based on direct experience of RDP review and planning in England and Malta, where qualitative evidence of ‘transaction benefits’ is identified. Benefits occur when exchange processes are designed in ways that generate positive returns beyond the immediate transaction, which can outweigh short‐term costs. We conclude that more attention to these aspects of policy design is warranted in future rural development programming and evaluation.
    June 27, 2016   doi: 10.1111/1477-9552.12166   open full text
  • Regional Price Effects of Extreme Weather Events and Wheat Export Controls in Russia and Ukraine.
    Linde Götz, Ivan Djuric, Oleg Nivievskyi.
    Journal of Agricultural Economics. June 20, 2016
    We build on the price transmission framework to identify domestic wheat price effects of wheat export controls. We explicitly take into account that a harvest failure causes domestic price effects. Moreover, the analysis at the regional level provides further evidence of the functioning of export controls in a large country. Results suggest a pronounced regional heterogeneity in the strength of domestic price effects of the 2010/11 export ban in Russia. The wheat price dampening effects amount to up to 67% and are strongest in the major wheat exporting region with direct access to the world market. This effect is transmitted to other regions by increased and reversed interregional trade flows. In contrast, we find that regional variation of export controls’ domestic price effects in Ukraine is rather small.
    June 20, 2016   doi: 10.1111/1477-9552.12167   open full text
  • Integrated Management of Land Use Systems under Systemic Risks and Security Targets: A Stochastic Global Biosphere Management Model.
    Tatiana Ermolieva, Petr Havlík, Yuri Ermoliev, Aline Mosnier, Michael Obersteiner, David Leclère, Nikolay Khabarov, Hugo Valin, Wolf Reuter.
    Journal of Agricultural Economics. June 13, 2016
    Interdependencies among land use systems resemble a complex network connected through demand–supply relationships. Disruption of this network may catalyse systemic risks affecting food, energy, water and environmental security (FEWES) worldwide. We describe the conceptual development, expansion and practical application of a stochastic version of the Global Biosphere Management Model (GLOBIOM), used to assess competition for land use between agriculture, bioenergy and forestry at regional and global scales. In the stochastic version of the model, systemic risks of various kinds are explicitly covered and can be analysed and mitigated in all their interactions. While traditional deterministic scenario analysis produces sets of scenario‐dependent outcomes, stochastic GLOBIOM explicitly derives robust outcomes that leave the systems better‐off, independently of which scenario applies. Stochastic GLOBIOM is formulated as a stochastic optimisation model that is critical for evaluating portfolios of robust interdependent decisions: ex‐ante strategic decisions (production allocation, storage capacities) and ex‐post adaptive (demand, trading, storage control) decisions. As an example, the model is applied to the question of optimal storage facilities, as buffers for production shortfalls, to meet regional and global FEWES requirements when extreme events occur. Expected shortfalls and storage capacities have a close relationship with Value‐at‐Risk (VaR) and Conditional Value‐at‐Risk (CVaR) risk measures. A Value of Stochastic Solutions is calculated to illustrate the benefits of the stochastic over the deterministic model approach.
    June 13, 2016   doi: 10.1111/1477-9552.12173   open full text
  • Incentive Perception in Livestock Disease Control.
    William Gilbert, Jonathan Rushton.
    Journal of Agricultural Economics. June 10, 2016
    The economic incentives facing people making decisions about infectious disease control have been given due theoretical consideration in the literature, based on principles of economic rationality. Such deductive models provide important tools for generating hypotheses. However, the application of such models in a predictive capacity has been criticised. Simultaneously, empirical studies aimed at quantitative exploration of farmer behaviour have relied heavily on social cognitive models, such as the theory of planned behaviour, without exploration of the epidemiological consequences of variability in behaviour within populations. Advances in other social sciences have revealed systematic biases in human reasoning which cast doubt on the validity of the rational economic model as a generalisation of human decision making. We review the characteristics of infectious disease and disease‐control interventions and the potential for bias in implementation decision making at primary producer level. Specific focus is given to the generation of externalities, both positive and negative; the perception of risk, relating to disease incidence, technology adoption and time preference; and finally uncertainty, and its potential to be moderated by trust in information sources. This information is then used to summarise supplemental psychological constructs which taken holistically may strengthen our ability to quantitatively explore human behaviour in this complex decision‐making environment.
    June 10, 2016   doi: 10.1111/1477-9552.12168   open full text
  • Trends in Approval Times for Genetically Engineered Crops in the United States and the European Union.
    Richard D. Smart, Matthias Blum, Justus Wesseler.
    Journal of Agricultural Economics. June 09, 2016
    Genetically engineered (GE) crops are subject to regulatory oversight to ensure their safety for humans and the environment. Their approval in the European Union (EU) starts with an application in a given Member State followed by a scientific risk assessment, and ends with a political decision‐making step (risk management). In the United States (US) approval begins with a scientific (field trial) step and ends with a ‘bureaucratic’ decision‐making step. We investigate trends for the time taken for these steps and the overall time taken for approving GE crops in the US and the EU. Our results show that from 1996–2015 the overall time trend for approval in the EU decreased and then flattened off, with an overall mean completion‐time of 1,763 days. In the US in 1998 there was a break in the trend of the overall approval time. Initially, from 1988 until 1997 the trend decreased with a mean approval time of 1,321 days; from 1998–2015, the trend almost stagnated with a mean approval time of 2,467 days.
    June 09, 2016   doi: 10.1111/1477-9552.12171   open full text
  • Eliciting Consumer WTP for Food Characteristics in a Developing Context: Application of Four Valuation Methods in an African Market.
    Roselyne Alphonce, Frode Alfnes.
    Journal of Agricultural Economics. June 06, 2016
    We elicit willingness to pay for conventional, organic and/or food‐safety‐inspected tomatoes in a traditional African food market. We identify four elicitation methods that can be conducted with one respondent at a time, and use them in a field setting: the Becker–DeGroot–Marschak mechanism, multiple price lists, multiple price lists with stated quantities, and real‐choice experiments. All four methods give similar results; showing that consumers are willing to pay a premium for organic and food‐safety‐inspected tomatoes. However, the size of the premium is significantly larger when consumers choose between alternatives than when they indicate their reservation price. The new multiple price lists with stated quantities were easy to explain in the busy market setting, gave the respondents the opportunity to determine the amount they wanted to buy, and had valuations in line with the other non‐comparative valuation methods.
    June 06, 2016   doi: 10.1111/1477-9552.12170   open full text
  • What Explains Agricultural Price Movements?
    John Baffes, Tassos Haniotis.
    Journal of Agricultural Economics. June 03, 2016
    After 2005, commodity prices experienced their longest and broadest boom since World War II. Agricultural prices have now come down considerably since their 2011 peak, but are still 40% higher in real terms than their 2000 lows. This paper briefly addresses the main arguments on the causes of the agricultural price cycle. It broadens the scope of analysis by focusing on six agricultural commodities, and identifies the relative weights of key quantifiable drivers of their prices. It concludes that increases in real income negatively affect real agricultural prices, consistent with the Prebisch–Singer hypothesis and its predecessor, Engel's Law. Energy prices matter most (not surprisingly, given the energy‐intensive nature of agriculture), followed by stock‐to‐use ratios and, to a lesser extent, ex‐change rate movements. The cost of capital affects prices only marginally, probably because it not only influences demand, but also evokes a supply response. The added value of these results lies in that, when examined in tandem and against market fundamentals, they challenge the conclusions from uni‐dimensional approaches that often put disproportionate weight on an individual factor.
    June 03, 2016   doi: 10.1111/1477-9552.12172   open full text
  • World Commodity Prices and Domestic Retail Food Price Inflation: Some Insights from the UK.
    James Davidson, Andreea Halunga, Tim Lloyd, Steve McCorriston, Wyn Morgan.
    Journal of Agricultural Economics. May 24, 2016
    We focus on two aspects of the links between world commodity prices and retail food price inflation: first, the effects of exchange rates and other input costs, and second; the effects of the duration of shocks on world commodity markets, not just the magnitude of price spikes (the latter often commanding most attention). The UK offers a natural and rather unexplored setting for the analysis. Applying time series methods to a sample of 259 monthly observations over the 1990(9)–2012(3) period we find substantial and significant long‐term partial elasticities for domestic food price inflation with respect to world food commodity prices, the exchange rate and oil prices (the latter indirectly via a relationship with world food commodity prices). Domestic demand pressures and food chain costs are found to be less substantial and significant over our data period. Interactions between the main driving variables in the system tend to moderate rather than exacerbate these partial effects. Furthermore, the persistence of shocks to these variables markedly affects their effects on domestic food prices.
    May 24, 2016   doi: 10.1111/1477-9552.12158   open full text
  • Estimating the Enduring Effects of Fertiliser Subsidies on Commercial Fertiliser Demand and Maize Production: Panel Data Evidence from Malawi.
    Jacob Ricker‐Gilbert, T. S. Jayne.
    Journal of Agricultural Economics. May 01, 2016
    Most studies of input subsidy programmes confine their analyses to measuring programme effects over a one‐year period. This article estimates the potential longer‐run or enduring effects of fertiliser subsidy programmes on smallholder farm households' demand for commercial fertiliser and maize production over time. We use four waves of panel data on 462 farm households in Malawi for whom fertiliser use can be tracked for eight consecutive seasons between 2003/2004 and 2010/2011. Panel estimation methods are used to control for potential endogeneity of subsidised fertiliser acquisition. Results indicate that farmers acquiring subsidised fertiliser in three consecutive prior years are found to purchase slightly more commercial fertiliser in the next year. This suggests a small amount of crowding in of commercial fertiliser from the receipt of subsidised fertiliser in prior years. In addition, acquiring subsidised fertiliser in a given year has a modest positive impact on increasing maize output in that same year. However, acquiring subsidised fertiliser in multiple prior years generates no statistically significant effect on maize output in the current year. These findings indicate that potential enduring effects of the Malawi fertiliser subsidy programme on maize production are limited. Additional interventions that increase soil fertility can make using inorganic fertiliser more profitable and sustainable for smallholders in sub‐Saharan Africa and thereby increase the cost‐effectiveness of input subsidy programmes.
    May 01, 2016   doi: 10.1111/1477-9552.12161   open full text
  • Oil Palm Expansion among Smallholder Farmers in Sumatra, Indonesia.
    Michael Euler, Stefan Schwarze, Hermanto Siregar, Matin Qaim.
    Journal of Agricultural Economics. April 27, 2016
    Many tropical regions are experiencing a rapid growth of oil palm cultivation. In Indonesia, the world's leading palm oil producer, in addition to large companies, smallholder farmers are increasingly engaged in the oil palm sector. Smallholder oil palm cultivation may contribute to income gains and socio‐economic development. However, land‐use decisions by smallholders are not well understood. Without appropriate policies, negative social and environmental consequences can also occur. To improve the knowledge base, we use data about present and past land‐use decisions from a survey of farm households in Sumatra. Employing duration models, we analyse the determinants and dynamics of oil palm adoption among smallholders. We find that independently operating farmers are currently driving growth rates in the oil palm sector. Smallholder adoption decisions are mainly attributable to regional and village level factors. While the current adoption primarily occurs outside of contracts, previous contractual ties between companies and other farmers in the same village play an important role for individual decisions. Beyond initial adoption, we also analyse later expansion decisions. While expanding the oil palm area subsequent to initial adoption is common among all types of adopters, those without previous contracts are found to expand significantly faster. We conclude that the concessions the government has allocated to palm oil companies in the past have initiated oil palm adoption in the small farm sector, but that the ensuing land‐use dynamics are mostly beyond government control. Some wider implications are discussed.
    April 27, 2016   doi: 10.1111/1477-9552.12163   open full text
  • Is fertiliser use inconsistent with expected profit maximization in sub‐Saharan Africa? “Evidence from Nigeria”.
    Lenis Saweda O. Liverpool‐Tasie.
    Journal of Agricultural Economics. April 27, 2016
    This article revisits a conventional wisdom that inorganic fertiliser use across sub‐Saharan Africa is too low. This expectation that more farmers should be using inorganic fertiliser, and at higher rates, implies it is profitable to use rates higher than observed if farmers are rational expected profit maximisers. We obtain consistent estimates of the effects of applied nitrogen on rice production. We find the yield response to applied nitrogen to be low in the main rice growing farming system. Farmer behaviour is not inconsistent with expected profitability which is limited by a low yield response to applied fertiliser, high transportation costs, and low selling prices for rice in rural areas. In particular, we do not find any farmers for whom applied nitrogen is profitable that are not using fertiliser in the study sample for each of our survey years (2010 and 2012).
    April 27, 2016   doi: 10.1111/1477-9552.12162   open full text
  • Conservation Practices and the Growth of US Cash Rent Leases.
    Douglas W. Allen, Allison Borchers.
    Journal of Agricultural Economics. April 25, 2016
    Over the past 20 years the ratio of cash rent to cropshare land leases across the US has more than doubled. We test different theories that might explain this, and conclude that the shift is mostly the result of revolutionary changes in cultivation practices. The switch from conventional to conservation tillage brought about by changes in herbicide technologies, genetically modified seeds, increased fuel costs, and knowledge of the benefits of soil micro‐organisms, has reduced a tenant‐farmer's ability to exploit a landowner's soil. This removes a major incentive to cropshare and makes cash renting more attractive. Using USDA field‐level data from across the US, we find strong support for this hypothesis, and some evidence that increased corporate structure also influences cash renting. Alternatively, we cannot find evidence that changes in risk, risk‐aversion or insurance coverage explain the growth in cash renting.
    April 25, 2016   doi: 10.1111/1477-9552.12153   open full text
  • Imported Intermediate Inputs and Firms’ Productivity Growth: Evidence from the Food Industry.
    Alessandro Olper, Daniele Curzi, Valentina Raimondi.
    Journal of Agricultural Economics. April 25, 2016
    Imported goods play a central role in determining the gains from trade. Using detailed trade and firm‐level data for Italy and France, we investigate the relationship between trade integration, imported intermediate inputs and firm performance in the food industry. Our main findings show that an increase in import competition spurs firm‐level productivity growth. Furthermore, the productivity growth effect attributable to imported intermediate inputs is significantly stronger than the effect due to imported final products. In addition, we find that new imported inputs are of particular importance, especially for Italian food firms, though less so for the French firms. Finally, the productivity growth effect of trade integration tends to be asymmetric across firms: more productive firms gain more from trade integration. These stylised facts have interesting policy implications.
    April 25, 2016   doi: 10.1111/1477-9552.12164   open full text
  • The Effects of Kenya's ‘Smarter’ Input Subsidy Programme on Smallholder Behaviour and Incomes: Do Different Quasi‐experimental Approaches Lead to the Same Conclusions?
    Nicole M. Mason, Ayala Wineman, Lilian Kirimi, David Mather.
    Journal of Agricultural Economics. April 12, 2016
    Kenya joined the ranks of sub‐Saharan African (SSA) countries implementing targeted input subsidy programmes (ISPs) for inorganic fertiliser and improved seed in 2007 with the establishment of the National Accelerated Agricultural Inputs Access Programme (NAAIAP). Although several features of NAAIAP were ‘smarter’ than other ISPs in the region, some aspects were less ‘smart’. However, the efficacy of the programme, and the relationship between its design and effectiveness, have been little studied. This article uses nationwide survey data to estimate the effects of NAAIAP participation on Kenyan smallholders’ cropping patterns, incomes, and poverty status. Unlike most previous studies of ISPs, a range of panel data‐ and propensity score‐based methods are used to estimate the effects of NAAIAP. The article then compares these estimated effects across estimators and to the effects of other ISPs in SSA, and discusses the likely links between differences in programme designs and impacts. The results are robust to the choice of estimator and suggest that, despite substantial crowding out of commercial fertiliser demand, NAAIAP had sizeable impacts on maize production and poverty severity. NAAIAP's success in targeting resource‐poor farmers and implementation through vouchers redeemable at private agro‐dealer shops likely contributed to its more favorable impacts than those of ISPs in Malawi and Zambia.
    April 12, 2016   doi: 10.1111/1477-9552.12159   open full text
  • Productivity and Convergence in European Agriculture.
    Lajos Baráth, Imre Fertő.
    Journal of Agricultural Economics. April 12, 2016
    We investigate relative productivity levels and decompose productivity change for European agriculture between 2004 and 2013. Specifically (i) we contribute to the debate on whether agricultural Total Factor Productivity (TFP) has declined or not in the European Union (EU); (ii) we compare the relative TFP level across EU Member States and investigate the difference between ‘old’ Member States (OMS, i.e. the EU‐15) and ‘new’ Member States (NMS); and (iii) we test whether TFP is converging or not among Member States. The empirical analysis applies an aggregate quantity framework to country‐level panel data from the Economic Accounts for Agriculture for 23 EU Member States. The results imply that TFP has slightly decreased in the EU over the analysed period; however there are significant differences between the OMS and NMS and across Member States. Finally, our estimates suggest that productivity is generally converging over this period, albeit slowly.
    April 12, 2016   doi: 10.1111/1477-9552.12157   open full text
  • Farmer Participation, Entry and Exit Decisions in the Italian Crop Insurance Programme.
    F. G. Santeramo, B. K. Goodwin, F. Adinolfi, F. Capitanio.
    Journal of Agricultural Economics. April 06, 2016
    The factors affecting the demand for agricultural insurance in the USA have been extensively studied over the last two decades. However, the determinants of a farm's entry and exit decisions in the insurance market have received relatively little attention. Turnover in the insurance book of business is an important issue in most private and public crop insurance plans. Moreover, insurance markets in the EU are still largely under‐investigated. We investigate empirically the determinants of crop insurance participation in Italy. We show that the participation rate is high for large firms and that it is negatively correlated with crop diversification, which is itself a form of insurance. High premiums tend to inhibit both entry and exit from the insurance market. Larger and wealthier farms are more likely to adopt insurance and renew coverage over time. We discuss implications of our results for public intervention and the private industry. In particular, we demonstrate that the decision to drop coverage by an insured grower may differ significantly from the corresponding decision to enroll in an insurance programme by an uninsured farmer. To the extent that policymakers want to encourage participation in subsidized crop insurance programmes, education and outreach efforts toward uninsured farmers may differ substantially from those directed toward keeping insured farmers enrolled in the programme. We investigate these differences.
    April 06, 2016   doi: 10.1111/1477-9552.12155   open full text
  • Valuing the Impacts of An Invasive Biological Control Agent: A Choice Experiment on the Asian Ladybird in France.
    Raja Chakir, Maia David, Estelle Gozlan, Aminata Sangare.
    Journal of Agricultural Economics. April 06, 2016
    Initially used as a biological control against aphids, the Asian ladybird has become highly invasive in many regions, including Europe. While biological control is usually considered as an environmentally‐friendly alternative to chemical pesticides in controlling pests in crops, there is growing concern that these environmental benefits could be outweighed by the negative consequences of the invasion. These include (i) biodiversity losses as populations of native ladybirds suffer from intraguild predation and competition for resources; (ii) human nuisance in houses, including risks of allergy and (iii) potential losses to wine‐growers. We provide an economic valuation of environmental and private characteristics affected by the Asian ladybird's invasion. We conduct a discrete choice experiment among a representative sample of the French population. Our results show that the consequences of the Asian ladybird's introduction do affect significantly the population's welfare. Among these, the impact on biodiversity through the threat on native species appears to be a significant concern.
    April 06, 2016   doi: 10.1111/1477-9552.12160   open full text
  • Russian Roulette at the Trade Table: A Specific Factors CGE Analysis of an Agri‐food Import Ban.
    Pierre Boulanger, Hasan Dudu, Emanuele Ferrari, George Philippidis.
    Journal of Agricultural Economics. April 05, 2016
    In the summer of 2014 Russia imposed a ban on most agri‐food products from countries enforcing Ukraine‐related sanctions against Russia. We use a specific factors computable general equilibrium (CGE) model to simulate the short‐run impact of this retaliatory policy. The baseline is carefully designed to isolate the impacts of the ban on the European Union (EU), Russia itself and a selection of key trade partners. The modelling of the ban follows a novel approach, where it is treated as a loss of established trade preferences via reductions in consumer utility in the Armington import function. Not surprisingly, the results indicate that Russia bears the highest income loss (about €3.4 billion) while the EU recovers part of its lost trade through expansion of exports to other markets. An ex‐post comparison between simulation results and observed trade data reveals the model predictions to be broadly accurate, thereby validating the robustness of the modelling approach.
    April 05, 2016   doi: 10.1111/1477-9552.12156   open full text
  • Organic‐ and Animal Welfare‐labelled Eggs: Competing for the Same Consumers?
    Francesca Gerini, Frode Alfnes, Alexander Schjøll.
    Journal of Agricultural Economics. March 22, 2016
    To understand the market for sustainable foods, it is important to allow for heterogeneous preferences. However, most studies of consumer preferences for sustainable foods only investigate average consumer preferences. They do not take into account that some consumer segments attempt to purchase as much sustainable food as possible, others are almost indifferent to the notion of sustainable food, and still others consider sustainable food a complete hoax. The aim of this study is to explore the preferences for various types of premium eggs across three consumer segments. We conduct a choice experiment including 900 Norwegian consumers and perform a behavioural segmentation based on the frequency of organic food purchase. We find that the segment purchasing the most organic food is, as expected, willing to pay a significant premium for organic eggs over eggs displaying only enhanced animal welfare. However, most consumers, who only occasionally purchase organic products, are unwilling to pay more for organic eggs than for enhanced animal welfare eggs, suggesting diminishing marginal utility for additional attributes. We find that a third consumer segment attempts to avoid organic eggs, even when they cost the same as other eggs. Our findings suggest that organic products will be unsuccessful in acquiring a larger share of the market as long as most consumers are unwilling to pay a premium for organic products with all their cost increasing sustainable attributes over products that have only a single sustainable attribute, in our case enhanced animal welfare.
    March 22, 2016   doi: 10.1111/1477-9552.12154   open full text
  • Transaction Cost Thresholds in International Rice Markets.
    Nelissa Jamora, Stephan Cramon‐Taubadel.
    Journal of Agricultural Economics. March 06, 2016
    Recent episodes of high and volatile prices for grains such as rice have raised concerns about their implications for hunger and poverty. We model price relationships between international rice prices and 221 domestic prices in 47 developing countries that import rice. We use a threshold vector error correction model that accounts for transaction costs of trade in spatial price transmission, and an improved regularised Bayesian threshold estimator for threshold models. Our results show that threshold values are higher after 2008 than before, which suggests that transaction costs in international rice trade have increased in recent years. Threshold values are highest for Latin American countries followed by African and Asian countries, and higher for retail than for wholesale prices. Since 2008, price transmission is slower in countries that responded to high and volatile prices with domestic market‐based interventions such as price controls and faster in countries that responded by lowering tariffs and by implementing production support measures.
    March 06, 2016   doi: 10.1111/1477-9552.12152   open full text
  • Export Restrictions and Smooth Transition Cointegration: Export Quotas for Wheat in Ukraine.
    Linde Götz, Feng Qiu, Jean‐Philippe Gervais, Thomas Glauben.
    Journal of Agricultural Economics. March 03, 2016
    We extend previous modelling approaches to identify domestic price effects of export controls. We allow for smooth transition between free‐trade price transmission regimes and those under export restricting regimes, using a smooth transition cointegration (STC) approach, rather than the more common assumption that regime changes are abrupt. Our approach has the advantage that the switch in the price transmission regime may be induced not only by an actual but also by an expected policy change. Results confirm the gradual nature of the transition between the regimes, which reflect trader heterogeneity and wheat storage decisions. We find that the STC approach outperforms alternative model approaches in terms of both regime classification and goodness of fit, when explaining Ukrainian domestic wheat prices under export controls. In particular, application of the Markov‐switching error correction model (MSECM) to the same data generates results which do not reflect any identifiable economic reality (in contrast to Götz et al., ).
    March 03, 2016   doi: 10.1111/1477-9552.12149   open full text
  • Modeling the Effects of Input Market Reforms on Fertiliser Demand and Maize Production: A Case Study from Kenya.
    Megan Sheahan, Joshua Ariga, T. S. Jayne.
    Journal of Agricultural Economics. February 29, 2016
    Kenya is one of the few countries in Sub‐Saharan Africa to experience an impressive rise in fertiliser use following a series of input market reforms in the early 1990s. Two major consequences of these reforms were declining fertiliser marketing margins and distances between farmers and fertiliser dealers. We quantify the effects of these changes on commercial fertiliser use and maize production in Kenya by estimating fertiliser demand and maize supply response functions using nationwide household survey data. Our results indicate that between 1997 and 2010, the estimated 27% reduction in real fertiliser prices that can be attributed to falling marketing margins associated with market reforms led to a 36% increase in nitrogen use on maize fields and a 9% increase in maize production resulting from both yield and acreage effects. On the other hand, decreasing distances to fertiliser retailers from the perspective of a given household did not appear to raise fertiliser use or maize supply, although a comparison across households using average distances over the panel indicate that those closer to retailers do apply more fertiliser on their maize fields.
    February 29, 2016   doi: 10.1111/1477-9552.12150   open full text
  • Microcredit Programme Participation and Household Food Security in Rural Bangladesh.
    Asadul Islam, Chandana Maitra, Debayan Pakrashi, Russell Smyth.
    Journal of Agricultural Economics. February 26, 2016
    Lack of access to credit prevents poor households in developing countries from diversifying into income‐generating activities that could safeguard them against unforeseen shocks and seasonality, leaving them susceptible to food deprivation, even when aggregate food supplies are adequate. Microcredit programmes help these households to access financial capital that could help improve their food security situation. We examine how microcredit affects different measures of food security; namely, household calorie availability, dietary diversity indicators and anthropometric status of women of reproductive age (15–49 years) and children under the age of 5 years. We find that microcredit programme participation increases calorie availability both at the intensive and extensive margins, but does not improve dietary diversity and only has mixed effects on the anthropometric measures. We also find that the effect of microcredit participation on food security may be non‐linear in which participation initially has either no effect on food security or may actually worsen it, before improving it in the longer run. Our results help to explain why existing short‐term evaluations of microcredit sometimes do not show any positive effects.
    February 26, 2016   doi: 10.1111/1477-9552.12151   open full text
  • Distance and Border Effects on Price Transmission: A Meta‐analysis.
    Carolin Kouyaté, Stephan Cramon‐Taubadel.
    Journal of Agricultural Economics. January 28, 2016
    Using price transmission estimates for 1,189 cereal market pairs extracted from 57 published studies in a meta‐analysis, we examine whether geographic distance and separation by an international border affects the strength and speed of price transmission. Our findings indicate that a border reduces the likelihood that two cereal prices will be cointegrated by 23%, and each additional 1,000 km of distance reduces the probability of cointegration by 7%. The speed of price transmission is on average 13 percentage points per period faster between prices that are located within the same country compared with cross‐border price pairs. Our meta‐analysis also indicates that increasing distance strongly reduces the speed of price transmission on domestic markets, but that the effect of distance on the speed of transmission is considerably weaker for trade over longer international distances. Overall, these results confirm expectations and complement the findings in the trade literature that borders and distance affect trade flows and price dispersion.
    January 28, 2016   doi: 10.1111/1477-9552.12145   open full text
  • Local Government, Spatial Spillovers and the Absorption of EU Structural Funds.
    Nana Zubek, Christian H.C.A. Henning.
    Journal of Agricultural Economics. January 25, 2016
    The allocation of regional policy funds varies dramatically across regions even when one controls for regional development indicators. We investigate the impact of local government performance as well as spillovers in knowledge, financial means and social relations as determinants of regional fund absorption. Government performance is derived within a Data Envelopment Analysis approach. Spillovers are investigated using a spatial Durbin model. Results show that government performance has a positive impact on fund absorption. Spillovers occur in knowledge as well as in financial means. The empirical analyses focus on Special Accession Program for Agriculture and Rural Development in Slovakia using panel data.
    January 25, 2016   doi: 10.1111/1477-9552.12146   open full text
  • Consistent Estimation of a Censored Demand System and Welfare Analysis: The 2012 VAT Reform in Spain.
    Javier García‐Enríquez, Cruz A. Echevarría.
    Journal of Agricultural Economics. January 25, 2016
    This paper analyses the effects that the 2012 VAT reform in Spain had on households’ welfare, focusing on a major expenditure group: food and non‐alcoholic beverages. Households’ demands are modeled as a two‐stage Quadratic Almost Ideal Demand System, which is then estimated by means of a consistent two‐step estimator introduced in Tauchmann () and not previously used in studies of this type. This procedure allows consistent imposition of the traditional parameter restrictions that utility maximisation requires in the context of a censored model. Our results show that the welfare loss and the increment in the tax bill increase with income. We also show that expenditure on food and non‐alcoholic beverages grows less than proportionately with income. Consequently, households with lower income experience a greater welfare loss relative to their income levels. In short, the 2012 VAT reform in Spain, focusing on this expenditure group, can be considered as regressive.
    January 25, 2016   doi: 10.1111/1477-9552.12144   open full text
  • Volatility in Oilseeds and Vegetable Oils Markets: Drivers and Spillovers.
    Bernhard Brümmer, Olaf Korn, Kristina Schlüßler, Tinoush Jamali Jaghdani.
    Journal of Agricultural Economics. December 28, 2015
    Food price volatility has re‐emerged as an important topic of political discussion since the food price crisis of 2007–2008. Different volatility drivers have been identified for different markets in the theoretical and empirical literature. However, there is no comprehensive analysis that considers a large number of potential drivers and investigates their joint effects in a dynamic model of interrelated markets. Our study provides such a volatility analysis for the oilseeds and vegetable oils markets. We use a common GARCH approach and a VAR model to identify volatility drivers and spillover effects. Our results show that exchange rate volatility is very important. However, the hotly debated financialisation of commodity markets is not found to be volatility increasing in our monthly data. Impulse response functions show strong spillover effects. Because many volatility drivers found to be important in other markets have no significant effect in our study, our results suggest that volatility drivers are market specific. This implies that any volatility‐reducing policies need to be designed for the market in question.
    December 28, 2015   doi: 10.1111/1477-9552.12141   open full text
  • Optimal Drug Control under Risk of Drug Resistance – The Case of African Animal Trypanosomosis.
    Sabine Liebenehm, Bernard Bett, Cristobal Verdugo, Mohamed Said.
    Journal of Agricultural Economics. December 21, 2015
    We examine two widely used treatment strategies for African animal trypanosomosis in West Africa: preventive drug control ex‐ante trypanosomosis infection and curative drug control ex‐post trypanosomosis infection. We investigate which combination of these alternative strategies is economically optimal for cattle farmers. We apply a dynamic optimisation framework to consider both the negative externality of drug resistance development and human behaviour. We develop a bio‐economic model to simulate the economic consequences of treatment strategies in a dynamic scenario that takes into account the interactions among the vector, host and livestock farmers. This model allows for the evolution of drug‐resistant trypanosomes through trypanocide misuse and simulates the observed behaviours of cattle farmers based on the elicited risk and time preferences of a sample of 202 cattle farmers in Mali and Burkina Faso. The results show that the private optimal mix of treatment strategies for a risk averse and patient farmer involves preventive treatment for susceptible cattle, supported by a small number of curative treatments for infected cattle. Compared with the treatment strategies observed in the field, this optimal mix of treatment strategies would save approximately 5% of the annual income of a livestock farmer in the study area and would reduce the prevalence of trypanosomosis. In addition, we demonstrate that a reduction in a farmer's risk aversion is associated with higher treatment rates that can avoid additional losses. By contrast, a decrease in a farmer's patience is related to lower treatment rates that thwart additional benefits. Our results suggest that individual risk and time preferences need to be considered in the development process of disease control interventions.
    December 21, 2015   doi: 10.1111/1477-9552.12142   open full text
  • Preference Heterogeneity in Contingent Behaviour Travel Cost Models with On‐site Samples: A Random Parameter vs. a Latent Class Approach.
    Stephen Hynes, William Greene.
    Journal of Agricultural Economics. December 21, 2015
    In this paper, we examine heterogeneity in the trip preferences of recreationists. We apply a random parameters negative binomial model and a latent class negative binomial model to a panel dataset of beach users at a site on the west coast of Ireland, where access across farmland has been restricted. This approach allows us to account for heterogeneity with respect to the impact of the chosen explanatory variables in a contingent behaviour travel cost model of demand where the researcher must also account for the fact that the sample data has been collected on‐site. The analysis also develops individual consumer surplus estimates and finds that estimates are systematically affected by both the random parameter and latent class specifications. There is also evidence that accounting for individual heterogeneity improves the statistical fit of the models and provides a more informative description of the drivers of recreationalist trip behaviour.
    December 21, 2015   doi: 10.1111/1477-9552.12143   open full text
  • Does IPM Have Staying Power? Revisiting a Potato‐producing Area Years After Formal Training Ended.
    Vanessa Carrión Yaguana, Jeffrey Alwang, George Norton, Victor Barrera.
    Journal of Agricultural Economics. November 05, 2015
    Integrated pest management (IPM) potentially reduces pesticide use and costs of agricultural production. However, IPM is knowledge intensive and its spread may dissipate over time due to knowledge required for its effective implementation and to competing messages about pest control. We examine IPM spread and adoption several years after formal intensive IPM outreach efforts ceased in a potato‐producing region in Ecuador. We describe adoption patterns and sources of IPM knowledge in 2012 and compare them with patterns that existed when outreach ceased in 2003. Results show that IPM adoption continues in the area but with a lower proportion of farmers fully adopting all practices and a higher proportion adopting low to moderate levels as compared to 2003. Almost all potato farmers in the area use some IPM practices, reflecting a major increase in IPM use. Farmer‐to‐farmer spread has supplanted formal training and outreach mechanisms. IPM adoption significantly lowers pesticide use and saves production costs for adopters.
    November 05, 2015   doi: 10.1111/1477-9552.12140   open full text
  • A Selective Review of the Economic Analysis of Animal Health Management.
    Lovell S. Jarvis, Pablo Valdes‐Donoso.
    Journal of Agricultural Economics. August 20, 2015
    Economists and veterinarians use similar approaches to analyse animal health threats, but veterinarians are concerned primarily with providing practical guidelines to peers and/or policy‐makers, while economists focus more on understanding the benefits to society as a whole and often provide only general guidelines to policy‐makers and little specific direction to practicing veterinarians. Despite the benefits of working together, differences in perspective and analytical approach often cause economists and veterinarians to struggle in dialogue and to lose some of the mutual gains that could be achieved through collaboration. This article discusses the use of economics in animal health management, identifies several useful literature reviews, and analyses a number of recent studies to explore the advantages and disadvantages of different conceptual and methodological approaches.
    August 20, 2015   doi: 10.1111/1477-9552.12131   open full text
  • Price Discrimination in Russian Wheat Exports: Evidence from Firm‐level Data.
    Kerstin Uhl, Oleksandr Perekhozhuk, Thomas Glauben.
    Journal of Agricultural Economics. June 29, 2015
    Russia emerged as an important wheat exporter in recent years raising the question of how this will affect international wheat markets. In particular developing countries – the main destination of Russian wheat exports – could be harmed by aggressive pricing behaviour. This article analyses the exertion of price discrimination by Russian wheat exporting firms based on Krugman's pricing‐to‐market hypothesis. We apply Knetter's panel model to a firm‐level dataset and find evidence for price‐discriminating behaviour by Russian firms in 25 out of 61 destination countries over the period 2002–2011.
    June 29, 2015   doi: 10.1111/1477-9552.12118   open full text
  • Asymmetric Information, Externalities and Incentives in Animal Disease Prevention and Control.
    David A. Hennessy, Christopher A. Wolf.
    Journal of Agricultural Economics. April 24, 2015
    Incentives influence behaviour while an understanding of farmer behaviour facilitates the control and prevention of infectious livestock disease. This paper lays out several perspectives on how information problems and other externalities affect biosecurity incentives. We use the principal–agent framework to examine livestock disease management in the presence of potential moral hazard and adverse selection. Moral hazard may apply to biosecurity decisions while adverse selection may apply to disease reporting. The example of compensation policies illustrates the importance of creating appropriate incentives: compensation must be sufficient to ensure early reporting but not so large as to discourage appropriate levels of biosecurity effort. Other cases of externalities are more diffuse than those modelled using principal–agent analysis, placing emphasis on third‐party effects and coordination problems. Three examples are provided. One concerns free‐riding when facing an endemic disease pool that can be managed by limiting sources and flows. Another regards coordination failure when securing against an exotic disease where farmer efforts complement and communicating actions are important. The last arises from absence of a risk market where an adverse infrastructural support externality could be managed by disease outbreak insurance.
    April 24, 2015   doi: 10.1111/1477-9552.12113   open full text
  • Beef Credence Attributes: Implications of Substitution Effects on Consumers’ WTP.
    Inês Viegas, Luís Catela Nunes, Lívia Madureira, Magda Aguiar Fontes, José Lima Santos.
    Journal of Agricultural Economics. May 12, 2014
    Consumers’ food choices are influenced by a wide variety of credence attributes, but the food industry faces problems assessing whether the price premiums that consumers are willing to pay for these attributes will be sufficient to offset higher production costs. In this context, consumers’ willingness to pay (WTP) for safer, cleaner and animal friendlier beef was investigated through a choice experiment. The relative importance of WTP for these attributes shows that consumers place the highest values on food safety, followed by animal welfare and finally environmental protection. WTP for different combinations of the three attributes cannot be obtained by independent valuation and summation due to the presence of significant substitution relationships. However, some suggestions for the relationships between these attributes can be proposed through an after‐survey analytical solution. The bias involved in separately valuing closely related attributes can potentially jeopardise the success of a differentiation strategy.
    May 12, 2014   doi: 10.1111/1477-9552.12067   open full text
  • Smallholder Supply Response to Marketing Board Activities in a Dual Channel Marketing System: The Case of Zambia.
    Nicole M. Mason, Thomas S. Jayne, Robert J. Myers.
    Journal of Agricultural Economics. April 16, 2014
    In recent years, parastatal grain marketing boards have re‐emerged as important elements of grain markets in eastern and southern Africa, yet little is known about how farmers are responding to their scaled up activities. This article develops a conceptual model of farmers’ production decisions in the context of dual output marketing channels (government and private sector) when output prices at harvest time and the availability of one of the marketing channels are unknown at planting time. It then applies the model to the case of Zambia and uses nationally representative household‐level panel survey data to estimate the effects of the Food Reserve Agency (FRA), the government parastatal maize marketing board, on smallholder crop production and fallow land. The FRA buys maize from smallholders at a pan‐territorial price that typically exceeds market prices in major maize producing areas. Results suggest that increases in the farmgate FRA maize price raise farmer maize price expectations, which induces a supply response. Smallholders respond to an increase in the FRA price by extensifying their maize production. On average, a 1% increase in the FRA price is associated with 0.06% increases in smallholders’ maize area planted and quantity harvested. There is also some evidence that farmers reduce the area of land under fallow in response to FRA incentives but there is no evidence of reductions in the area planted to other crops.
    April 16, 2014   doi: 10.1111/1477-9552.12066   open full text
  • The Role of Index Trading in Price Formation in the Grains and Oilseeds Markets.
    Christopher L. Gilbert, Simone Pfuderer.
    Journal of Agricultural Economics. April 09, 2014
    We use both Granger‐causality and instrumental variables (IV) methods to examine the impact of index fund positions on price returns for the main US grains and oilseed futures markets. Our analysis supports earlier conclusions that Granger‐causal impacts are generally not discernible. However, market microstructure theory suggests trading impacts should be instantaneous. IV‐based tests for contemporaneous causality provide stronger evidence of price impact. We find even stronger evidence that changes in index positions can help predict future changes in aggregate commodity price indices. This result suggests that changes in index investment are in part driven by information which predicts commodity price changes over the coming months.
    April 09, 2014   doi: 10.1111/1477-9552.12068   open full text
  • A Note on the Effects of the Income Stabilisation Tool on Income Inequality in Agriculture.
    Robert Finger, Nadja El Benni.
    Journal of Agricultural Economics. April 06, 2014
    Increasing concerns with income risks in agriculture have led to discussions on the introduction of an Income Stabilisation Tool (IST) in Europe. In this note, we extend existing evaluations of the IST by investigating the potential effect of the IST on inequality in farm incomes using Swiss agriculture as a case study. We find that the IST will significantly reduce income inequality, in particular by increasing lower quantiles of the income distribution. This property constitutes a value‐added of the IST that is not yet considered in the current policy debate.
    April 06, 2014   doi: 10.1111/1477-9552.12069   open full text
  • Government Expenditures, Health Outcomes and Marginal Productivity of Agricultural Inputs: The Case of Tanzania.
    Summer Allen, Ousmane Badiane, Ligane Sene, John Ulimwengu.
    Journal of Agricultural Economics. March 24, 2014
    This paper examines the impact of health expenditures on agricultural labour productivity in order to inform the necessary policy decisions about targeting scarce public resources towards their most effective uses. We link health sector expenditures in rural Tanzania to health outcomes and agricultural labour productivity using data from the 2008 Household Budget Survey (10,975 households) and the 2007/08 Agricultural Census (52,594 households) across 113 districts in Tanzania. The results indicate that the marginal productivity of labour as well as land and fertilisers respond significantly to health expenditures. However, the magnitude of the response varies across types of disease, categories of expenditures and agricultural inputs. These findings suggest both the need and scope for targeting public expenditures in the health sector to achieve better agricultural growth outcomes.
    March 24, 2014   doi: 10.1111/1477-9552.12063   open full text
  • How Large is Congressional Dependence in Agriculture? Bayesian Inference about ‘Scale’ and ‘Scope’ in Measuring a Spatial Externality.
    Garth Holloway, Donald J. Lacombe, Timothy M. Shaughnessy.
    Journal of Agricultural Economics. March 16, 2014
    The political economy literature on agriculture emphasises influence over political outcomes via lobbying conduits in general, political action committee contributions in particular, and the pervasive view that political preferences with respect to agricultural issues are inherently geographic. In this context, ‘interdependence’ in Congressional vote behaviour manifests itself in two dimensions. One dimension is the intensity by which neighbouring vote propensities influence one another, and the second is the geographic extent of voter influence. We estimate these facets of dependence using data on a Congressional vote on the 2001 Farm Bill using routine Markov chain Monte‐Carlo procedures and Bayesian model averaging, in particular. In so doing, we develop a novel procedure to examine both the reliability and the consequences of different model representations for measuring both the ‘scale’ and the ‘scope’ of spatial (geographic) co‐relations in voting behaviour.
    March 16, 2014   doi: 10.1111/1477-9552.12054   open full text
  • Green Light for Green Agricultural Policies? An Analysis at Regional and Global Scales.
    Janine Pelikan, Wolfgang Britz, Thomas W. Hertel.
    Journal of Agricultural Economics. March 09, 2014
    This paper analyses the effects of introducing biodiversity‐targeted ecological focus area (EFA) requirements on all farms with arable land in the EU by quantifying their global, regional, economic and environmental impacts in a mutually consistent way. To capture these impacts, different spatial scales need to be considered – ranging from on‐farm decisions regarding the EFA in the EU, to supply response around the world. In order to address this challenge, we combine the supply side of the CAPRI model, which offers high spatial, farm and policy resolution in the EU, with the GTAP model of global trade and land use. Both models are linked through a multi‐product, restricted‐revenue function for the EU crop sector. The results predict improved environmental status in the high‐yielding regions of the EU. However, output price increases lead to intensification in the more marginal areas of the EU where little or no additional land is taken out of production. The decrease in arable land in the EU is partially compensated by an increase of crop land, as well as increased fertiliser applications, in other regions of the globe. Thus, the improvement of environmental status in the EU comes at the price of global intensification, as well as the loss of forest and grassland areas outside the EU. Overall, we find that every hectare of land that is taken out of production in the EU increases greenhouse gas emissions in the rest of the world by 20.8 tonnes CO2 equivalent.
    March 09, 2014   doi: 10.1111/1477-9552.12065   open full text
  • Crop Insurance as a Strategy for Adapting to Climate Change.
    Salvatore Di Falco, Felice Adinolfi, Martina Bozzola, Fabian Capitanio.
    Journal of Agricultural Economics. March 04, 2014
    Financial insurance for extreme events can play an important role in hedging against the implications of climate change. This paper combines a comprehensive estimation strategy and a unique panel dataset to study the role of financial insurance in farmers' welfare under uncertainty. Data are drawn from a large Italian farm panel dataset. We find that (i) demand for insurance products is likely to increase in response to climatic conditions, and (ii) that the use of insurance reduces the extent of risk exposure. We also find that farms growing more crops are less likely to adopt the insurance scheme. This confirms what is found in the theoretical literature. Crop diversification can be a substitute for financial insurance in hedging against the impact of risk exposure on welfare.
    March 04, 2014   doi: 10.1111/1477-9552.12053   open full text
  • The Determinants of Firm Profitability Differences in EU Food Processing.
    Stefan Hirsch, Jan Schiefer, Adelina Gschwandtner, Monika Hartmann.
    Journal of Agricultural Economics. February 24, 2014
    This paper decomposes the variance in EU food industry return‐on‐assets into year, country, industry and firm effects using a hierarchical linear model (HLM). The HLM approach accounts for some of the methodological drawbacks of conventional approaches of variance decomposition such as anova and components of variance and additionally allows the estimation of the impact of covariates within each effect level. The results for selected EU countries show that firm effects are far more important than industry structure in determining food industry profitability. In particular, firm size and industry concentration are drivers of profitability while firm risk and age as well as industry growth have a negative influence.
    February 24, 2014   doi: 10.1111/1477-9552.12061   open full text
  • Self‐reported Resilience of European Farms With and Without the CAP.
    Jack Peerlings, Nico Polman, Liesbeth Dries.
    Journal of Agricultural Economics. February 21, 2014
    Firms are able to survive only if they adapt appropriately in response to disturbances. The ability of a farm to continue after a disturbance is defined as resilience. To analyse the resilience of EU farms we explore exit and the number of adaptation strategies that farmers follow under two scenarios. The current CAP will be continued in the base scenario, while it will be abolished in scenario 2. The outcomes show that under both scenarios large, more specialised farms with young farm heads are most resilient, and small more diversified farms headed by old farmers are least resilient.
    February 21, 2014   doi: 10.1111/1477-9552.12062   open full text
  • On the Allocation of Possible EU Total Allowable Catches (TAC) for the Mediterranean Swordfish: An Envy‐Free Criterion and Equitable Procedure.
    Athanasios Kampas.
    Journal of Agricultural Economics. February 20, 2014
    This paper examines the allocation of entitlement rights for the management of common property resources. In particular, the case of allocating a Total Allowable Catch quota for the Mediterranean swordfish is examined as a case study. The proposed approach comprises three steps. First, there is a bargaining procedure between the European Union (EU) and the rest of the International Commission for the Conservation of Atlantic Tunas (ICCAT) countries. As soon as an initial agreement is possible, the EU considers various equitable rationing methods to allocate its share to the European Member States. These rationing methods draw upon two different streams of the literature, bankruptcy and ‘burden sharing’. Finally, the European Member States reach a fair agreement through minimising an envy‐free index. The allocation rule which is defined as the weighted average of equal proportion and equal share rationales represents the best compromise solution.
    February 20, 2014   doi: 10.1111/1477-9552.12064   open full text
  • A Sealed‐bid Double Auction Experiment on German Milk Quota Exchanges.
    Jens‐Peter Loy, Thomas Glauben, Till Requate, Christoph R. Weiss.
    Journal of Agricultural Economics. January 29, 2014
    Standard double auctions perfectly mimic the neoclassical idea about the functioning of markets. The efficiency of the market outcome and speed of adjustment towards equilibrium have been studied in the literature to validate economic expectations. However, only a few real world examples outside the financial sector exist. In 2000, Germany implemented a sealed‐bid double auction mechanism for trading milk quota. The two main features of this mechanism are: (1) a sealed‐bid double auction that produces excess demands that are covered by state reserves free of charge, and (2) a variable price band that is used to exclude price bids above a certain range. To study these regulations a sealed‐bid double auction experiment is simulated and run with students. It is shown that the regulations lead to significant losses in welfare that are caused by direct effects and by an imperfect adjustment of individual bidding behaviour. Further, learning effects throughout the experiments appear to be very limited. Thus, complex auction mechanisms may need to be thoroughly tested before being introduced in the real world.
    January 29, 2014   doi: 10.1111/1477-9552.12050   open full text
  • Institutional Environment and Technical Efficiency: A Stochastic Frontier Analysis of Cotton Producers in West Africa.
    Veronique Theriault, Renata Serra.
    Journal of Agricultural Economics. January 29, 2014
    This paper examines the effects of the institutional environment on West African cotton farmers’ technical efficiency (TE). First, key aspects of the cotton sector institutional environment are discussed, including input and credit access, and producers’ organisations. Then, a stochastic frontier production function, which incorporates technical inefficiency effects, is applied to farm level data collected in Benin, Burkina Faso and Mali. The survey includes farmers’ evaluations of the cotton sector institutional environment. Results suggest that institutional level features influence producers’ TE, besides farm‐level characteristics. Cotton growers who report a negative experience with the joint liability programme, who identify the cotton price mechanism or access to credit as the main constraints to performance, and who cultivate more hectares of cereals are technically more inefficient in producing cotton. Findings suggest that cotton farmers in Mali are less technically efficient in producing cotton than in Burkina Faso and Benin. Agricultural development policies focusing on reducing farmers’ financial stress, particularly through the establishment of adequate price mechanisms (i.e. higher farm‐gate prices and timely payments to farmers) and improvement in the input–credit markets should be encouraged to improve TE in West Africa.
    January 29, 2014   doi: 10.1111/1477-9552.12049   open full text
  • Smallholder Demand for Maize Hybrids in Zambia: How Far do Seed Subsidies Reach?
    Melinda Smale, Ekin Birol, Dorene Asare‐Marfo.
    Journal of Agricultural Economics. January 29, 2014
    We add to an emerging body of literature on input subsidies in Africa south of the Sahara. Our analysis focuses on demand for seed, characterising smallholders with a high predicted demand for hybrid seed who were not reached by the subsidy programme. We use cross‐sectional data from the 2010 agricultural season and an instrumented control function approach to test the hypothesis that the subsidy on hybrid maize seed in Zambia is selectively biased. Consistent with other literature, we find that the subsidy is a recursive determinant of seed demand, but in 2010, its recipients had more land, more assets, and lower poverty rates. Findings illustrate the social costs of the programme as currently designed and highlight the need to build alternative supply channels if poorer maize growers are to grow hybrid seed.
    January 29, 2014   doi: 10.1111/1477-9552.12046   open full text
  • What Does Granger Causality Prove? A Critical Examination of the Interpretation of Granger Causality Results on Price Effects of Index Trading in Agricultural Commodity Markets.
    Stephanie‐Carolin Grosche.
    Journal of Agricultural Economics. January 29, 2014
    The influence of index trading on price levels, returns, spreads or volatility in agricultural commodity markets is frequently investigated with bivariate Granger Causality (GC) tests. A joint review of existing empirical studies reveals scant and inconsistent evidence of GC from index activity to prices. Some findings of reverse GC from prices to index activity are reported. The literature offers three different interpretations of GC test results: (i) as prima facie causal evidence; (ii) as a test for informational efficiency of the markets; or (iii) as a test for the ability of one variable to improve the forecast of another variable. A critical examination of these interpretations against an extended theoretical background reveals that none allows direct inferences about the existence or absence of an influence from index trading activity on the price mechanism in the market. This severely limits the usefulness of a stand‐alone application of GC tests.
    January 29, 2014   doi: 10.1111/1477-9552.12058   open full text
  • Country‐Specific Determinants of Horizontal and Vertical Intra‐industry Agri‐food Trade: The Case of the EU New Member States.
    Attila Jambor.
    Journal of Agricultural Economics. January 29, 2014
    Intra‐industry trade (IIT) has become a widespread phenomenon with a growing role in international trade, though agricultural trade is usually neglected in empirical works. This article identifies the determinants of horizontal and vertical intra‐industry agri‐food trade between New Member States (NMS) and the EU‐27 in 1999–2010, by applying static and dynamic models with different specifications to panel data. Results show that IIT is mainly of a vertical nature in the NMS, though the majority of NMS export low quality agri‐food products to EU‐27 markets. Factor endowments are negatively related to agri‐food horizontal intra‐industry trade (HIIT), but positively to vertical intra‐industry trade (VIIT). Economic size is positively and significantly related to both types of IIT, while distance and IIT are found to be negatively related in both cases. Results also suggest that HIIT and VIIT are greater if a New Member State exports agri‐food products to another NMS while EU accession has had positive and significant impacts on both HIIT and VIIT, suggesting that economic integration fosters IIT.
    January 29, 2014   doi: 10.1111/1477-9552.12059   open full text
  • Using Attribute Importance Rankings Within Discrete Choice Experiments: An Application to Valuing Bread Attributes.
    Kelvin Balcombe, Michail Bitzios, Iain Fraser, Janet Haddock‐Fraser.
    Journal of Agricultural Economics. January 23, 2014
    We present a new Bayesian econometric specification for a hypothetical Discrete Choice Experiment (DCE) incorporating respondent ranking information about attribute importance. Our results indicate that a DCE debriefing question that asks respondents to rank the importance of attributes helps to explain the resulting choices. We also examine how mode of survey delivery (online and mail) impacts model performance, finding that results are not substantively affected by the mode of survey delivery. We conclude that the ranking data are a complementary source of information about respondent utility functions within hypothetical DCEs.
    January 23, 2014   doi: 10.1111/1477-9552.12051   open full text
  • Product Differentiation with Credence Attributes and Private Labels: The Case of Whitefish in UK Supermarkets.
    Geir Sogn‐Grundvåg, Thomas Andre Larsen, James A. Young.
    Journal of Agricultural Economics. January 23, 2014
    The retail market for seafood is dynamic with substantial competition both amongst retailers and between private labels and national brands. New product attributes are added in attempts to differentiate products and to attract consumers. Credence attributes, in particular those related to eco‐labels and fishing method, have become more common. But little is known about how these and other credence attributes are valued in the retail market. In addition, little is known about price differences between private labels. To estimate the value of these attributes, weekly in‐store observations of selected frozen whitefish products were conducted in seven UK retail chains in the city of Glasgow. An estimated hedonic model shows a substantial price premium for fishing method (line‐caught), a premium for both home (Scottish) and non‐home country of origin (Icelandic) and a premium for the Marine Stewardship Council eco‐label. An uncertified eco‐label owned by a large seafood manufacturer leads to reduced price. The study also reveals substantial price differences between private labels for whitefish. The results contribute new insights regarding opportunities for differentiation by credence attributes which may lead to more sustainable and effective resource use along the value chain for frozen whitefish.
    January 23, 2014   doi: 10.1111/1477-9552.12047   open full text
  • What Drives Marginal Abatement Costs of Greenhouse Gases on Dairy Farms? A Meta‐modelling Approach.
    Bernd Lengers, Wolfgang Britz, Karin Holm‐Müller.
    Journal of Agricultural Economics. January 23, 2014
    This paper examines the relationships between the marginal abatement costs (MAC) of greenhouse gas (GHG) emissions on dairy farms and factors such as herd size, milk yield and available farm labour, on the one hand, and prices, GHG indicators and GHG reduction levels, on the other. A two‐stage Heckman procedure is used to estimate these relationships from a systematically designed set of simulations with a highly detailed mixed integer bio‐economic farm‐level model. The resulting meta‐models are then used to analyse how MAC vary across farm‐level conditions and GHG measures. We find that simpler GHG indicators lead to significantly higher MAC, and that MAC strongly increase beyond a 1–5% emission reduction, depending on farm attributes and the chosen indicator. MAC decrease rapidly with increasing farm size, but the effect levels off beyond a herd size of 40 cows. As expected, the main factors driving gross margins per dairy cow also significantly influence mitigation costs. Our results indicate high variability of MAC on real life farms. In contrast to time consuming simulations with the complex mixed integer bio‐economic programming model, the meta‐models allow the distribution of MAC in a farm population to be efficiently derived and thus could be used to upscale to regional or sector level.
    January 23, 2014   doi: 10.1111/1477-9552.12057   open full text
  • Smallholder Farmers and Collective Action: What Determines the Intensity of Participation?
    Elisabeth Fischer, Matin Qaim.
    Journal of Agricultural Economics. January 22, 2014
    Collective action through farmer groups can be an important strategy for smallholders to remain competitive in rapidly changing markets. Previous research has analysed determinants of farmer participation in groups, equating participation with group membership. However, within groups the commitment of members can vary, as marginal benefits and costs are not the same for all individuals, and opportunities to free‐ride exist. Low participation in collective activities may reduce the ability of groups to provide useful services to its members. This article investigates determinants of member participation intensity, using the example of farmer groups in Kenya. The role of individual and group characteristics is analysed with survey data and regression models. Previous benefits that members received through the group positively influence their intensity of participation in group meetings and collective marketing, suggesting that reciprocity motives play a role. Low participation can mostly be attributed to structural and institutional conditions, such as group size and the timing of payments for collective product sales. More diversified farmers are less likely to sell collectively when group marketing activities only concentrate on one particular commodity. Since smallholders are often highly diversified, the focus of farmer groups should also be broadened. Further policy implications are discussed.
    January 22, 2014   doi: 10.1111/1477-9552.12060   open full text
  • Does the Decoupling Reform Affect Agricultural Employment in Sweden? Evidence from an Exogenous Change.
    Martin Nordin.
    Journal of Agricultural Economics. January 22, 2014
    This study uses aggregated municipality data, for the years 2001–2009, to explore whether direct payments to farmers affect agricultural employment in Swedish municipalities. The decoupling reform in 2005 included a new grassland support payment accompanied by management obligations that had unexpectedly high redistributive consequences as it greatly increased common agricultural policy payments to municipalities with large areas of grassland. In some municipalities, total payments more than doubled. Thus, since the reform seems exogenous to the behaviour of farmers and the regional economy, the reform can be used to identify a subsidy effect. We find that a permanent increase in agricultural employment can be attributed to the new grassland support. Our results indicate that the grassland support generates an additional job at a cost of SEK 250,000, relative to the average agricultural wage of SEK 333,000. However, the subsidy effect is largely keeping jobs in agriculture, i.e. the grassland support may be slowing down the process of structural change in grassland regions.
    January 22, 2014   doi: 10.1111/1477-9552.12052   open full text
  • A Hedonic Analysis of Nutrition and Health Claims on Fruit Beverage Products.
    Serena Szathvary, Samuele Trestini.
    Journal of Agricultural Economics. January 14, 2014
    This paper investigates the effects on prices of nutrition and health claims for foodstuffs, in addition to other attributes, using fruit beverages as a case study. The model estimation is based on revealed purchasing behaviour for fruit beverages in the north‐east of Italy. Applying an hedonic price model, the price of a product is explained as a function of product attributes. The model estimate identifies the implicit retail‐market‐level price of specific attributes such as nutrition and health claims, ceteris paribus. Nutrition and health claims significantly affect retail prices. Our findings suggest that retail price response to nutrition and health claims differs in relation to other product attributes, showing a strong reduction of price variation among flavours when such benefits are claimed on the label.
    January 14, 2014   doi: 10.1111/1477-9552.12056   open full text
  • Agent‐based Modelling of Climate Adaptation and Mitigation Options in Agriculture.
    Thomas Berger, Christian Troost.
    Journal of Agricultural Economics. December 17, 2013
    Computer simulation models can provide valuable insights for climate‐related analysis and help streamline policy interventions for improved adaptation and mitigation in agriculture. Computable general equilibrium (CGE) and partial equilibrium (PE) models are currently being expanded to include land‐use change and energy markets so that the effects of various policy measures on agricultural production can be assessed. Agent‐based modelling (ABM) or multi‐agent systems (MAS) have been suggested as a complementary tool for assessing farmer responses to climate change in agriculture and how these are affected by policies. MAS applied to agricultural systems draw on techniques used for Recursive Farm Programming, but include models of all individual farms, their spatial interactions and the natural environment. In this article, we discuss the specific insights MAS provide for developing robust policies and land‐use strategies in response to climate change. We show that MAS are well‐suited for uncertainty analysis and can thereby complement existing simulation approaches to advance the understanding and implementation of effective climate‐related policies in agriculture.
    December 17, 2013   doi: 10.1111/1477-9552.12045   open full text
  • Market Failure and Japanese Farmland Rents.
    P. J. Dawson.
    Journal of Agricultural Economics. December 04, 2013
    Since the early 1950s, Japanese farmland rents have been regulated and a consensus emerged that rent control led to market failure. Hypothesising a rent‐formation model where rents are determined by prices, this paper estimates a threshold autoregressive model which integrates three tests of market failure, namely, inefficiency, bias and asymmetry. There are four results. First, a long‐run relationship exists between rents and prices, and the Japanese farmland rental market is efficient. Second, the rent‐price elasticity is unity and the market is unbiased. Third, rents are Granger‐caused by prices which supports the rent‐formation model. Fourth, asymmetry exists where more rapid error‐correction occurs immediately after policy reform when rent growth exceeds price growth by 3.6% or more, and rent control has benefitted tenants.
    December 04, 2013   doi: 10.1111/1477-9552.12048   open full text
  • Financing Constraints and Agricultural Investment: Effects of the Irish Financial Crisis.
    Conor M. O'Toole, Carol Newman, Thia Hennessy.
    Journal of Agricultural Economics. July 24, 2013
    This paper considers the role of financing constraints in agricultural investment since the recent financial crisis. Using Irish micro data over the period 1997–2010, we estimate the Q model of investment and test for financing constraints using a measure of internal finance dependence. Our econometric method controls for censoring, heterogeneity and endogeneity. We find that financing constraints are binding and the impact of constraints becomes much more acute following the financial crisis. Constraints are found to be well above pre‐crisis levels and especially elevated in 2007, 2008 and 2009. The effects are greatest for medium‐sized farms and farms in the dairy sector.
    July 24, 2013   doi: 10.1111/1477-9552.12027   open full text
  • The Influence of Biodiversity Provision on the Cost Structure of Swedish Dairy Farming.
    Joakim Gullstrand, Rembert Blander, Staffan Waldo.
    Journal of Agricultural Economics. July 21, 2013
    Multi‐functionality and the provision of eco‐system services are politically highly prioritised aspects of farming. This study uses a Symmetric Generalised McFadden cost function to analyze the relationship between costs of production and the provision of biodiversity for Swedish milk farms. Biodiversity indicators are based on the number of valuable plant species present at the farm and are modeled as an output in the cost function. The results show that the marginal cost of biodiversity increases with higher provision, and that an increased provision of biodiversity also increases the costs of market commodities such as milk and beef. The upward slope of the marginal cost of biodiversity and its competitive relationship with market goods questions the efficiency of support schemes based on voluntary programmes with a flat‐rate per hectare compensation. Instead, the results support targeted environmental policy schemes with zonings and/or the use of biodiversity indicators.
    July 21, 2013   doi: 10.1111/1477-9552.12028   open full text
  • Fertiliser Subsidies and Smallholder Commercial Fertiliser Purchases: Crowding Out, Leakage and Policy Implications for Zambia.
    Nicole M. Mason, Thomas S. Jayne.
    Journal of Agricultural Economics. June 03, 2013
    Fertiliser intended for government subsidy programmes is sometimes diverted and sold to farmers at or near market prices. Failure to account for such ‘leakage’ can upwardly bias econometric estimates of the effect of government fertiliser subsidy programmes on total fertiliser use. This paper extends the framework used in earlier studies on the crowding in/crowding out effects of subsidised fertiliser on commercial fertiliser purchases to account for leakage, and then applies it to the case of Zambia. Results suggest that each additional kg of subsidised fertiliser injected into the system increases total fertiliser use by 0.54 kg. Without controlling for leakage, the estimate would have been 0.87, an overestimate of 61%.
    June 03, 2013   doi: 10.1111/1477-9552.12025   open full text
  • Spatial Integration in the Spanish Mackerel Market.
    Javier García‐Enríquez, Javier Hualde, Josu Arteche, Arantza Murillas‐Maza.
    Journal of Agricultural Economics. May 29, 2013
    This article analyses the potential links between regional first‐sale markets for mackerel in Spain using fractional cointegration techniques. The results indicate that this is not an integrated market, and we demonstrate that there are no links, at least in the long term, between any of Spain's five regional markets. This result has significant implications in policy terms, as local, regional and European authorities must take into account the need to apply distinct local policies.
    May 29, 2013   doi: 10.1111/1477-9552.12020   open full text
  • Demand for Seasonal Wage Labour in Agriculture: What Does Family Farming Hide?
    Aurélie Darpeix, Céline Bignebat, Philippe Perrier‐Cornet.
    Journal of Agricultural Economics. May 27, 2013
    This article draws on the agricultural household literature to understand the dynamics of wage labour on farms in a context of family farming. The recent evolution towards an increased use of seasonal wage labour motivates the original distinction of three types of labour: family labour, permanent‐wage labour and seasonal‐wage labour. Considering the two wage labour types and hiring cost for seasonal workers, our empirical results based on 2000 French data on fruit and vegetable farms suggest that the choice between hiring permanent or seasonal wage labour is not only determined by the seasonality of the activity. Indeed, the characteristics of the local labour market also affect the trade‐off between permanent and seasonal wage labour. This result provides insights on the substitutability of the two labour types, especially when the local labour market is tight. Moreover, the substitution of seasonal‐wage labour for permanent‐wage labour can occur in the agricultural sector as a mean of increasing flexibility as well as reducing costs and commitments. Finally, family labour is found to substitute for wage labour and more specifically for seasonal‐wage labour.
    May 27, 2013   doi: 10.1111/1477-9552.12019   open full text
  • Foreign Aid and the Quest for Poverty Reduction: Is Aid to Agriculture Effective?
    Ozgur Kaya, Ilker Kaya, Lewell Gunter.
    Journal of Agricultural Economics. May 21, 2013
    Development statistics estimate that three quarters of the poor live in rural areas and most of them depend on agriculture and related activities for their livelihood. Consequently, research focusing on economic growth and poverty reduction has found that sustainable rapid transition out of poverty requires a special emphasis on the agricultural sector. This study contributes to the debate on aid effectiveness by disaggregating total aid into subcategories and specifically investigating the relationship between aid given to the agricultural sector and poverty reduction. If agricultural development is more effective in reducing poverty than some other types of development, then foreign aid directed towards agriculture may be more efficient in increasing the well‐being of the poor than aid directed to some other sectors or uses. Our analysis uses panel data for developing aid recipient countries to empirically test this relationship. We find a significant relationship between agricultural aid and poverty reduction in our estimates.
    May 21, 2013   doi: 10.1111/1477-9552.12023   open full text
  • Impact of Purchase Intentions on Full and Partial Bids in BDM Auctions: Willingness‐to‐pay for Organic and Local Blueberries.
    Lijia Shi, Lisa A. House, Zhifeng Gao.
    Journal of Agricultural Economics. May 14, 2013
    We conduct a series of Becker–DeGroot–Marschak (BDM) auctions to elicit consumers' willingness‐to‐pay (WTP) for organic and local blueberries. Participants' intentions to purchase the auction product were collected to determine how purchase intentions for the auction products affect their partial bids (WTP for an additional attribute) as well as full bids (WTP for the auction product). The results suggest, as expected, that full bids from participants with purchase intention for the auction product are significantly higher than those from participants without purchase intention. However, the partial bids, which are inferred from the full bids, for organic and local attributes are consistent across participants with different purchase intentions. Therefore, if the focus of a BDM auction is consumers' WTP for product attributes, purchase intentions may not be an important influence on the value.
    May 14, 2013   doi: 10.1111/1477-9552.12022   open full text
  • Stated Attribute Non‐attendance in Successive Choice Experiments.
    Ariane Kehlbacher, Kelvin Balcombe, Richard Bennett.
    Journal of Agricultural Economics. May 13, 2013
    Attribute non‐attendance in choice experiments affects willingness‐to‐pay (WTP) estimates and therefore the validity of the method. A recent strand of literature uses attenuated estimates of marginal utilities of ignored attributes. Following this approach, we propose a generalisation of the mixed logit model, whereby the distribution of marginal utility coefficients of a stated non‐attender has a potentially lower mean and lower variance than those of a stated attender. Model comparison shows that our shrinkage approach fits the data better and produces more reliable WTP estimates. We further find that while reliability of stated attribute non‐attendance increases in successive choice experiments, it does not increase when respondents report having ignored the same attribute twice.
    May 13, 2013   doi: 10.1111/1477-9552.12021   open full text
  • Characterising Vulnerability to Poverty in Rural Haiti: A Multilevel Decomposition Approach.
    Damien Échevin.
    Journal of Agricultural Economics. March 20, 2013
    This article characterises vulnerability to poverty in Haiti using a unique survey conducted in 2007 in rural areas. In a first step, using two‐level linear random coefficient models of both per capita consumption and per capita income, the article assesses the impact of self‐reported shocks on households' economic well‐being. In a second step, the prediction model is used to calculate various measures of vulnerability to poverty, considering various types of shocks. Empirical findings show that self‐reported (or observable) idiosyncratic shocks, in particular health‐related shocks, have larger impact on vulnerability to poverty than observable covariate shocks. These results are in line with the fact that many households reported idiosyncratic health shocks as being the worst shocks they experienced. On the other hand, unobservable idiosyncratic shocks appear to have generally more influence on households' vulnerability to poverty than unobservable covariate ones. We also show that omitting self‐reported shocks in the analysis leads to an underestimate of households' vulnerability to poverty.
    March 20, 2013   doi: 10.1111/1477-9552.12017   open full text
  • Farmers’ Preferences for Production Practices: A Choice Experiment Study in the Rhone River Delta.
    Mélanie Jaeck, Robert Lifran.
    Journal of Agricultural Economics. March 20, 2013
    This article examines farmers' preferences for both cropping and management practices, which are of policy interest because of their environmental impact. We present the results of a choice experiment survey of all agricultural decision makers in the Camargue region. A latent class model identified three classes. The main class encompasses farmers complying with the norms of the Protected Geographical Indication (PGI): Riz de Camargue. We estimated the monetary value of each of the relevant agricultural practices. Our results make a strong case for differentiating incentives to encourage environmentally friendly practices and identify the diversity of values attached to the main components of rice cropping technology in the area. Estimates of the implicit prices indicate that most rice growers can be persuaded to adopt environmentally friendly practices. These findings could help in designing targeted contracts according to farmers' preferences, in line with conservation or environmental objectives.
    March 20, 2013   doi: 10.1111/1477-9552.12018   open full text
  • External and Internal R&D, Capital Investment and Business Performance in the Spanish Agri‐Food Industry.
    Silverio Alarcón, Mercedes Sánchez.
    Journal of Agricultural Economics. January 22, 2013
    We examine the effects of external and internal expenditure on research and development on the business performance of industrial agri‐food enterprises. For this purpose, a data sample from the Encuesta de Estrategias Empresariales en España (Survey of Business Strategies in Spain) was used, which includes information on more than 400 businesses over the period 2000–2008. The econometric analysis uses quantile regressions to address the vast asymmetry of the variables and to identify non‐linear relationships. The results reveal interesting new findings on the impacts of R&D on the agri‐food industry. The most evident, although not the most immediately apparent, relationship concerns the positive effects of external R&D on business performance. Internal R&D was also revealed to be an important way of enhancing the productivity of SMEs. In addition, the modernisation of the production process through investment in capital goods continues to be the main path to improve competitiveness. However, support was found neither for the inverse relationship, that is the most profitable firms are those that spend the most on R&D, nor for complementarity between external and internal R&D. The latter would imply that the bulk of Spanish agri‐food firms have at most the capacity for only one type of R&D.
    January 22, 2013   doi: 10.1111/1477-9552.12015   open full text
  • Adoption of Multiple Sustainable Agricultural Practices in Rural Ethiopia.
    Hailemariam Teklewold, Menale Kassie, Bekele Shiferaw.
    Journal of Agricultural Economics. January 21, 2013
    The adoption and diffusion of sustainable agricultural practices (SAPs) has become an important issue in the development‐policy agenda for sub‐Saharan Africa, especially as a way to tackle land degradation, low agricultural productivity and poverty. However, the adoption rates of SAPs remain below expected levels. This study analyses the factors that facilitate or impede the probability and level of adoption of interrelated SAPs, using recent data from multiple plot‐level observations in rural Ethiopia. Multivariate and ordered probit models are applied to the modelling of adoption decisions by farm households facing multiple SAPs, which can be adopted in various combinations. The results show that there is a significant correlation between SAPs, suggesting that adoptions of SAPs are interrelated. The analysis further shows that both the probability and the extent of adoption of SAPs are influenced by many factors: a household’s trust in government support, credit constraints, spouse education, rainfall and plot‐level disturbances, household wealth, social capital and networks, labour availability, plot and market access. These results imply that policy‐makers and development practitioners should seek to strengthen local institutions and service providers, maintain or increase household asset bases and establish and strengthen social protection schemes in order to improve the adoption of SAPs.
    January 21, 2013   doi: 10.1111/1477-9552.12011   open full text
  • Agricultural Landscape Value and Irrigation Water Policy.
    Mara Thiene, Yacov Tsur.
    Journal of Agricultural Economics. January 21, 2013
    Water is a limiting factor of agricultural production in an increasing number of regions. There is also ample empirical evidence to suggest that the economic value of agricultural landscape is substantial, which has been used to justify agricultural support programs in developed economies. We investigate the link between the environmental amenity of agricultural landscape and the value of water in crop production. We find that the environmental externality gives rise to a social derived demand for water which differs from the market‐based (private) derived demand for water. Policy implications regarding irrigation water allocation and pricing are drawn. An empirical example illustrates the methodology and main findings.
    January 21, 2013   doi: 10.1111/1477-9552.12016   open full text
  • Is Input Mix Inefficiency Neglected in Agriculture? A Case Study of Pig‐based Farming Systems in England and Wales.
    David Hadley, Euan Fleming, Renato Villano.
    Journal of Agricultural Economics. January 18, 2013
    The principal concern of this article is the relative importance of input mix as a source of inefficiency. Emphasis in efficiency analysis studies in agricultural production has historically focused on technical inefficiency as a single concept until methodological advances enabled it to be decomposed into pure technical inefficiency and scale inefficiency. But, this advance was insufficient to identify what we consider to be the major source of inefficiency in agricultural production, namely mix inefficiency. We consider that farm enterprises may be particularly susceptible to input mix inefficiency because of restrictions on movement around the frontier isoquant; delays in the adoption of improved technologies embodied in new vintages of production processes; risk as a source of friction in input allocation decisions; and the potential for inconsistency in simultaneously attempting to reach points of allocative efficiency and mix efficiency in input use. We use non‐parametric methods to calculate a Hicks–Moorsteen productivity index using panel data for a sample of specialised pig producers in England and Wales. This index is then decomposed into measures of technology, technical efficiency, scale efficiency and mix efficiency for an input orientation. Results of the analysis show that the estimated mean mix inefficiency (0.736) was substantially larger than mean technical inefficiency (0.975) and mean scale inefficiency (0.957) over the study period.
    January 18, 2013   doi: 10.1111/1477-9552.12003   open full text
  • Quantifying the Economic Return to Participatory Extension Programmes in Ireland: an Endogenous Switching Regression Analysis.
    Doris Läpple, Thia Hennessy, Carol Newman.
    Journal of Agricultural Economics. January 18, 2013
    This article examines the effectiveness of a government funded extension programme. Farm‐level data are used to assess the economic impact of dairy discussion groups, a common participatory extension method. The evaluation focuses on whether discussion group participants have improved farm profits, which is estimated with an endogenous switching regression model. This method controls for self‐selection bias due to unobserved characteristics, such as the farmer’s ability, that may affect both participation and farm profitability. After controlling for this potential bias, we find that the economic returns to discussion group membership are positive, thus supporting government targets to enrol more farmers in discussion groups.
    January 18, 2013   doi: 10.1111/1477-9552.12000   open full text
  • Models of Site‐choice for Walks in Rural Ireland: Exploring Cost Heterogeneity.
    Edel Doherty, Danny Campbell, Stephen Hynes.
    Journal of Agricultural Economics. January 18, 2013
    Farmland can confer significant public good benefits to society aside from its role in agricultural production. In this article, we investigate preferences of rural residents for the use of farmland as a recreational resource. In particular, we use a choice experiment to determine preferences for the development of farmland walking trails. Our modelling approach uses a series of mixed logit models to assess the impact of alternative distributional assumptions for the cost coefficient on the welfare estimates associated with the provision of the trails. Our results reveal that using a mixture of discrete and continuous distributions to represent cost heterogeneity leads to a better model fit and lower welfare estimates. Our results further reveal that Irish rural residents show positive preferences for the development of farmland walking trails in the Irish countryside.
    January 18, 2013   doi: 10.1111/1477-9552.12002   open full text
  • Do Farmers Internalise Environmental Spillovers of Pesticides in Production?
    Theodoros Skevas, Spiro E. Stefanou, Alfons Oude Lansink.
    Journal of Agricultural Economics. January 18, 2013
    Pesticides are used in agriculture to protect crops from pests and diseases, with indiscriminate pesticide use having several adverse effects on the environment and human health. An important question is whether the environmental spillovers of pesticides also affect the farmers’ production environment. We use a model of optimal pesticide use that explicitly incorporates the symmetric and asymmetric effect of pesticides’ environmental spillovers on crop production. The application focuses on panel data from Dutch cash crop producers. We show that pesticides have a positive direct impact on output and a negative indirect impact through their effects on the production environment.
    January 18, 2013   doi: 10.1111/1477-9552.12007   open full text
  • Six Decades of Total Factor Productivity Change and Sources of Growth in Bangladesh Agriculture (1948–2008).
    Sanzidur Rahman, Ruhul Salim.
    Journal of Agricultural Economics. January 13, 2013
    This study applies the Färe–Primont index to calculate total factor productivity (TFP) indices for agriculture in 17 regions of Bangladesh covering a 61‐year period (1948–2008). It decomposes the TFP index into six finer components (technical change, technical‐, scale‐ and mix‐efficiency changes, residual scale‐ and residual mix‐efficiency changes). Results reveal that TFP grew at an average rate of 0.57% p.a. led by the Chittagong, Rajshahi, Rangpur, Dinajpur and Noakhali regions. TFP growth is largely powered by technological progress estimated at 0.74% p.a. Technical efficiency improvement is negligible (0.01% p.a.) due to stagnant efficiency in most of the regions. Decline in scale efficiency is also negligible (0.01% p.a.), but the decline in mix efficiency is high at 0.19% p.a. Decomposition of the components of TFP changes into finer measures of efficiency corrects the existing literature’s blame of a decline in technical efficiency as the main cause of poor TFP growth in Bangladesh. Among the sources, farm size, R&D investment, extension expenditure and crop specialisation positively influenced TFP growth, whereas the literacy rate had a negative influence on growth. Policy implications include encouraging investment in R&D and extension, land reform measures to increase average farm size, promotion of Green Revolution technology and crop diversification.
    January 13, 2013   doi: 10.1111/1477-9552.12009   open full text
  • Consumer Valuation of Alternative Meat Origin Labels.
    Glynn T. Tonsor, Ted C. Schroeder, Jayson L. Lusk.
    Journal of Agricultural Economics. December 21, 2012
    Results from a split‐sample survey of the US population reveal consumers prefer meat products carrying origin information to unlabelled alternatives. Consumers are largely unaware of origin labelling laws and are indifferent to an important aspect of the implementation of current mandatory country of origin information rules in the US. In particular, consumers value meat products labelled ‘Product of North America’ approximately the same as ‘Product of United States’. Despite the similarity of these two labels, they have vastly different implications in terms of trade and segregation costs. Our results suggest that a transition from one label to the other is equally satisfying for the consumer while being less costly for processors and more acceptable to trade partners.
    December 21, 2012   doi: 10.1111/1477-9552.12010   open full text
  • Consumer Valuation of Environmentally Friendly Production Practices in Wines, considering Asymmetric Information and Sensory Effects.
    Todd M. Schmit, Bradley J. Rickard, John Taber.
    Journal of Agricultural Economics. November 19, 2012
    Agricultural producers and food marketers are increasingly responding to environmentally friendly cues from consumers, even though privately appropriated values associated with a range of food products commonly rank above their public‐good counterparts. Wine can be considered an ideal product to examine these issues given consumers’ highly subjective sensory preferences towards wine, and a winegrape production process that is relatively intensive in the use of chemical inputs for the control of disease and infection. Semi‐dry Riesling wines made from field research trials following environmentally friendly canopy management practices were utilised in a lab experiment to better understand preferences for environmental attributes in wine. A combined sensory and monetary evaluation framework explicitly considered asymmetric order effects. Empirical results revealed that sensory effects dominate extrinsic environmental attributes. Once consumer willingness to pay (WTP) was conditioned on a wine’s sensory attributes, the addition of environmentally friendly information did not affect their WTP; however, adding sensory information significantly influenced WTP initially based only on environmental attributes. The results confirm the idea that promoting environmentally friendly winegrape production practices would increase demand and lead to higher premiums for the products, but are only sustainable if consumers’ sensory expectations are met on quality.
    November 19, 2012   doi: 10.1111/1477-9552.12001   open full text
  • Challenging Small‐Scale Farming: A Non‐Parametric Analysis of the (Inverse) Relationship Between Farm Productivity and Farm Size in Burundi.
    Marijn Verschelde, Marijke D’Haese, Glenn Rayp, Ellen Vandamme.
    Journal of Agricultural Economics. November 02, 2012
    We use a non‐parametric approach to investigate the (inverse) relationship between farm productivity and farm size. A kernel regression is used on data of mixed cropping systems to study the determinants of production including different factors that have been identified in literature as missing variables in the testing of the inverse relationship such as soil quality, location and household heterogeneity. Household data on farm activities and crop production were gathered from 640 households in 2007 in two Northern provinces of Burundi. Our results do not reject the findings of an inverse relationship between farm size and productivity. However, we find that size returns vary substantially with farm size, that is, between 0.2 for the smallest farms and 0.8 for the largest farms. Other factors that significantly affect production include soil quality. Finally, we find a significant positive association between food security and farm size.
    November 02, 2012   doi: 10.1111/j.1477-9552.2012.00373.x   open full text
  • The Role of Risk Mitigation in Production Efficiency: A Case Study of Potato Cultivation in the Bolivian Andes.
    Catherine Larochelle, Jeffrey Alwang.
    Journal of Agricultural Economics. October 17, 2012
    Using a stochastic production frontier to model potato production in Bolivia, we quantify the costs of environmental and activity diversification (AD) in the form of efficiency losses and yield forgone. We find that efficiency decreases with the number of fields in a geographical cluster, distance between the dwelling and a particular field, discontinuity between fields, and off‐farm income. However, environmental diversification (ED) is more detrimental than AD. Using spatial analysis of field and household efficiency measures, we assess production vulnerability to climatic shocks and the potential of ED in mitigating shocks. We find important spatial clusters of low and high efficiencies at the field level suggesting that climatic shocks influence efficiency measures. Household‐level efficiency measures exhibit random spatial patterns suggesting that on average households can mitigate the adverse effects of shocks through ED.
    October 17, 2012   doi: 10.1111/j.1477-9552.2012.00367.x   open full text
  • Investing Today or Tomorrow? An Experimental Approach to Farmers’ Decision Behaviour.
    Syster C. Maart‐Noelck, Oliver Musshoff.
    Journal of Agricultural Economics. October 17, 2012
    An understanding of farmers’ decision‐making behaviour is important for adequate forecasts as well as policy recommendations regarding structural changes. We experimentally analyse the investment behaviour of real farmers. The observed investment decisions are contrasted with theoretical benchmarks from classical investment theory and the real options approach. Our results show that both theories cannot exactly explain investment behaviour. However, farmers learn from former investment decisions and do consider the value of waiting over time.
    October 17, 2012   doi: 10.1111/j.1477-9552.2012.00371.x   open full text
  • Impacts of the End of the Coffee Export Quota System on International‐to‐Retail Price Transmission.
    Jun Lee, Miguel I. Gómez.
    Journal of Agricultural Economics. October 11, 2012
    We examine the impact of the end of the coffee export quota system (EQS) on international‐to‐retail price transmission in France, Germany and the United States. We take account of the existence of long‐run threshold effects and short‐run price transmission asymmetries (PTAs). We find evidence of threshold effects in both periods (EQS and post‐EQS) in all three countries and the presence of short‐run PTAs during the post‐EQS period in all countries, but not during the EQS period. Our results indicate that the threshold values are smaller in the post‐EQS period, suggesting that retail prices became more responsive to changes in international prices. However, the speed of adjustment towards the long‐run equilibrium decreases during the post‐EQS period in the three countries. In the short run, non‐linear impulse response analyses indicate that a shock in international prices was more persistent during the EQS period than in the post‐EQS period. Moreover, we find evidence of short‐run PTAs in the post‐EQS period, with differences across countries. We find support for the ‘rockets and feathers’ principle in the United States; in contrast, retail prices respond faster when international prices are falling in Germany and France. We explain these differences in terms of market structures.
    October 11, 2012   doi: 10.1111/j.1477-9552.2012.00372.x   open full text
  • A Comparison Between the Conventional Stated Preference Technique and an Inferred Valuation Approach.
    Lava Yadav, Thomas M. van Rensburg, Hugh Kelley.
    Journal of Agricultural Economics. October 10, 2012
    Contrary to conventional stated preference valuation techniques that employ a direct questioning approach, the inferred valuation method utilises indirect questioning where respondents are asked for their belief regarding others’ values for a good or service. In this study, using choice experiments, we compare the results obtained through the two valuation techniques for environmental features of the Burren landscape in western Ireland. Consistent with previous studies, stated values using the conventional approach are found to be significantly higher than those obtained through the inferred valuation approach. In particular, this study highlights the dissimilarities in relative preferences observed between the two landscape attributes (rocky limestone pavements and orchid‐rich grasslands) from the two questioning formats. While respondents were indifferent between the two habitats, they believed the ‘average other’ to be significantly more concerned about the conservation of the rocky limestone pavements. We attribute this divergence in preferences to be a consequence of additional normative motives perceived by respondents with regard to the conservation of orchid‐rich grasslands.
    October 10, 2012   doi: 10.1111/j.1477-9552.2012.00375.x   open full text
  • Potential Conflict and Inefficiencies Arising in Agri‐environmental Management.
    Elsa Martin, Hubert Stahn.
    Journal of Agricultural Economics. October 05, 2012
    We characterise the welfare implications of uncoordinated policy decisions in the presence of multiple externalities, illustrated with an aquifer. We concentrate on the problem of coordination that can occur when distinct agricultural and water authorities implement their respective policies (to optimise food production and groundwater use) with environmental concerns in mind. We represent this problem as an open‐loop Nash game, which compares the game‐theoretical solution to a centrally planned solution. We show that the inefficiencies arise from differences in the account taken of relevant costs by different authorities. We demonstrate that the magnitude of the inefficiency generated by the absence of coordination of our authorities varies depending on the weights put on environmental benefits by each authority, and discuss the implications of analysis for future research and policy.
    October 05, 2012   doi: 10.1111/j.1477-9552.2012.00374.x   open full text
  • Sources of Firm Performance Differences in the US Food Economy.
    Fabio R. Chaddad, Mario P. Mondelli.
    Journal of Agricultural Economics. September 17, 2012
    Researchers in economics and strategy have long been interested in understanding the determinants of firm performance. We apply the relatively novel approach of hierarchical linear modelling (HLM) to a large panel of food economy firms to shed new light on the long‐standing debate about the relative importance of industry, corporate parent and business unit effects on firm profits. Our results suggest that business unit and corporate effects are more relevant than industry effects in explaining firm performance differences in the food economy. In addition, we also explore the effect of specific strategic factors on performance within each level of analysis. In particular, we find that business‐segment size, industry barriers to entry, corporate diversification, R&D intensity, capital intensity and resource availability are significant predictor variables that explain firm performance differences. Given the relatively important role of corporate effects and the positive influence of corporate strategic variables on business unit performance, our findings suggest that the environment provided by corporate parents significantly affects business unit profitability. In other words, corporate strategy does matter and thus should continue to draw attention from scholars interested in explaining profitability in the food economy.
    September 17, 2012   doi: 10.1111/j.1477-9552.2012.00369.x   open full text