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NEP: New Economics Papers
Agricultural Economics
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Edited by: Angelo Zago
Universit? degli Studi di Verona
Date: 2004-12-12
Papers: 19
This document is in the public domain, feel free to circulate it.
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In this issue we have:
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1. MARKET ASSISTED LAND REFORM IN NE BRAZIL: A STOCHASTIC
FRONTIER PRODUCTION EFFICIENCY EVALUATION
Hildo Meirelles de Souza Filho; Miguel Rocha de Sousa;
Ant?nio M?rcio Buainain; Jos? Maria da Silveira; Marcelo
Marques Magalh?es
2. THE WORLD MARKET FOR SOYBEANS: PRICE TRANSMISSION INTO BRAZIL
AND EFFECTS FROM THE TIMING OF CROP AND TRADE
Mario A. Margarido; Frederico A. Turolla; Carlos R. F. Bueno
3. Price Incentives, Nonprice factors, and Crop Supply Response:
The Indian Cash Crops
SUNIL KANWAR
4. Relative Profitability, Supply Shifters and Dynamic Output
Response:The Indian Foodgrains
SUNIL KANWAR
5. Equilibrium Commodity Prices with Irreversible Investment and
Non-Linear Technologies,
Jaime Casassus; Pierre Collin-Dufresne; Bryan R. Routledge
6. Production Performance in Russian Regions: Farm Level Analysis
Irina Bezlepkina
7. Effects of Human Capital on Farm and Non-Farm Productivity
and Occupational Stratification in Rural Pakistan
Takashi Kurosaki; Humayun Khan
8. The market for cocoa powder
Henk. L.M. Kox
9. Information and the Risk-Averse Firm
Robert G. Chambers; John Quiggin
10. Separability of stochastic production decisions from
producer risk preferences in the presence of financial markets
Robert G. Chambers; John Quiggin
11. Increasing Uncertainty: A Definition
Simon Grant; John Quiggin
12. Comparative statics for state-contingent technologies
John Quiggin; Robert G. Chambers
13. Supermodularity and the comparative statics of risk
John Quiggin; Robert G. Chambers
14. Dual structures for the sole-proprietorship firm
Robert G. Chambers; John Quiggin
15. Environmental Labelling and Consumer's Choice - An Empirical
Analysis of the Effect of the Nordic Swan
Thomas Bue Bjorner; Lars Garn Hansen; Clifford S. Russell
16. Managing natural resources in the Pacific Islands
Satish Chand
17. Productivity in the Australian Dairy Industry
Tom Kompas; Tuong Nhu Che
18. Production and Technical Efficiency on Australian Dairy Farms
Tom Kompas; Tuong Nhu Che
19. Market reform, productivity and efficiency in Vietnamese
rice production
Tom Kompas
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1. MARKET ASSISTED LAND REFORM IN NE BRAZIL: A STOCHASTIC
FRONTIER PRODUCTION EFFICIENCY EVALUATION
Hildo Meirelles de Souza Filho
Miguel Rocha de Sousa
Ant?nio M?rcio Buainain
Jos? Maria da Silveira
Marcelo Marques Magalh?es
We evaluate the "C?dula da Terra" Pilot Project, a land reform
project whose conception, mechanisms and operational structure is
different from traditional agrarian reform based on expropriation.
The land distributed by the project, is first acquired by the
agricultural producers associations, and a given set of
incentives is established to obtain a better efficiency use of
resources. The main objective of this article is to characterize
the sources of technical and allocative inefficiency from a cross
section of 309 beneficiaries from five states in NE Brazil. We
estimated a potential production frontier following the
methodology of BATTESE and COELLI (1995), using the software
FRONTIER 4.1. (Tim COELLI, 1996). The main conclusion is that
technical assistance, human capital (years of schooling) and
better access to credit reduce inefficiency, or thus increase
technical and allocative efficiency of the beneficiaries.
JEL: Q15
Date: 2004
URL: http://d.repec.org/n?u=RePEc:anp:en2004:109&r=agr
2. THE WORLD MARKET FOR SOYBEANS: PRICE TRANSMISSION INTO BRAZIL
AND EFFECTS FROM THE TIMING OF CROP AND TRADE
Mario A. Margarido
Frederico A. Turolla
Carlos R. F. Bueno
This paper investigates the price transmission in the world
market for soybeans using time series econometrics models. The
theoretical model developed by Mundlack and Larson (1992) is
based on the Law of the One Price, which assumes price
equalization across all local markets in the long run and allows
for deviations in the short run. The international market was
characterized by three relevant soybean prices: Rotterdam Port,
Argentina and the United States. The paper estimates the
elasticity of transmission of these prices into soybean prices in
Brazil. There were carried causality and cointegration tests in
order to identify whether there is significant long-term
relationship among these variables. There was also calculated the
impulse-response function and forecast error variance
decomposition to analyze the transmission of variations in the
international prices over Brazilian prices. An exogeneity test
was also carried out so as to check whether the variables respond
to short term deviations from equilibrium values. Results
validated the Law of the One Price in the long run. In line with
many studies, this paper showed that Brazil and Argentina can be
seen as price takers as long as the speed of their adjustment to
shocks is faster than in the United States, the latter being a
price maker. An interesting conclusion was reached when the
pattern of the impulse response functions was compared to the
timing of crop and trade in Brazil, Argentina and the United
States. These seasonal differences may help explaining the
pattern of the response of Brazilian prices to shocks in the
international market, especially that the response from shocks in
the United States is opposite to the response from shocks in
Argentina because harvest in the two hemispheres occurs in
different periods. In addition, the one-month lag between
Brazilian and Argentine harvests may contribute to explain a
turning point in the impulse-response function that occurs one
month after the shock.
JEL: Q17 C32
Date: 2004
URL: http://d.repec.org/n?u=RePEc:anp:en2004:110&r=agr
3. Price Incentives, Nonprice factors, and Crop Supply Response:
The Indian Cash Crops
SUNIL KANWAR (Delhi School of Economics)
Agriculture as a source of growth was sorely neglected in the
early development strategies of the currently developing
countries. Realisation of this shortcoming prompted public policy
in these countries to encourage agriculture by various means. The
success of these policies depends, however, on how farmers
respond to the incentives provided. Using panel data pertaining
to Indian agriculture for the period 1967-68/1999-00, covering 7
major 'annual' cash crops cultivated across 16 major states, we
provide estimates of area, yield and output elasticities w.r.t
price and nonprice variables. Our results suggest that the
preferred policy ought to be to enhance irrigation and encourage
the use of fertiliser and HYVs, if long-run agricultural growth
is to be achieved.
Keywords: Incentives, supply response, deprivation
JEL: O13 Q11
Date: 2004-11
URL: http://d.repec.org/n?u=RePEc:cde:cdewps:132&r=agr
4. Relative Profitability, Supply Shifters and Dynamic Output
Response:The Indian Foodgrains
SUNIL KANWAR (Delhi School of Economics)
The realisation that the wage-goods constraint, if binding,
could stall the growth process of a developing country, prompted
policy makers to encourage agriculture by various means. The
success of public policy depends, however, on how strongly
farmers respond to the incentives provided. Using a large panel
dataset pertaining to Indian agriculture - spanning the period
1967-68/1999-00, and covering the 6 important food crops
cultivated across 16 major states - we provide estimates of area,
yield and output elasticities w.r.t price and nonprice factors.
We find consistent evidence, that the supply response of food
crops is influenced by rainfall, input availability (specifically
irrigation, fertilizer and improved seeds), and relative profits,
in that order of importance. Our results prompt us to conclude,
that all things considered, the preferred policy should be to
encourage irrigation, fertilizer use and the use of modern seeds,
rather than raise output support/procurement prices period after
period.
Keywords: wage-goods, price incentives, supply shifters
JEL: O13
Date: 2004-11
URL: http://d.repec.org/n?u=RePEc:cde:cdewps:133&r=agr
5. Equilibrium Commodity Prices with Irreversible Investment and
Non-Linear Technologies,
Jaime Casassus
Pierre Collin-Dufresne
Bryan R. Routledge
We model the properties of equilibrium spot and futures oil
prices in a general equilibrium production economy with two goods.
In our model production of the consumption good requires two
inputs: the consumption good and a Oil. Oil is produced by wells
whose flow rate is costly to adjust. Investment in new Oil wells
is costly and irreversible. As a result in equilibrium,
investment in Oil wells is infrequent and lumpy. Equilibrium spot
price behavior is determined as the shadow value of oil. The
resulting equilibrium oil price exhibits mean-reversion and
heteroscedasticity. Further, even though the state of the economy
is fully described by a one-factor Markov process, the spot oil
price is not Markov (in itself). Rather it is best described as a
regime-switching process, the regime being an investment
`proximity' indicator. Further, our model captures many of the
stylized facts of oil futures prices. The futures curve exhibits
backwardation as a result of a convenience yield, which arises
endogenously due to the productive value of oil as an input for
production. This convenience yield is decreasing in the amount of
oil available in the economy. We calibrate our model with
economic aggregate data and crude oil futures prices. The models
does a good job in matching the first two moments of the futures
curves and the average consumption of oil-output and output-
consumption of capital ratios from the macroeconomic data. The
calibration results suggest the presence of convex adjustment
costs for the investment in new oil wells. We also test a linear
approximation of the equilibrium regime-shifting dynamics implied
by our model. Our empirical specification successfully captures
spot and futures data. Finally, the specific empirical
implementation we use is designed to easily facilitate commodity
derivative pricing that is common in two-factor reduced form
pricing models.
URL: http://d.repec.org/n?u=RePEc:cmu:gsiawp:1090880066&r=agr
6. Production Performance in Russian Regions: Farm Level Analysis
Irina Bezlepkina
This project analyzes whether Russian farms operate under
liquidity constraints or under soft budget constraints. A
production function that utilizes the concept of total factor
productivity will be used. Incorporation of financial variables
in the production function will allow analyzing their effects on
farm output and suggest agricultural policy implications.
JEL: Q00
Date: 2003-04-03
URL: http://d.repec.org/n?u=RePEc:eer:wpalle:01-034e&r=agr
7. Effects of Human Capital on Farm and Non-Farm Productivity
and Occupational Stratification in Rural Pakistan
Takashi Kurosaki
Humayun Khan
This paper investigates the effects of human capital on
productivity using micro panel data of rural households in the
NorthWest Frontier Province, Pakistan, where a substantial job
stratification is observed in terms of income and education. To
clarify the mechanism underlying this stratification, the human
capital effects are estimated for wages(individual level) and for
self-employed activities(household level), and for farm and non-
farm sectors. Estimation results show a clear contrast between
farm and non-farm sectors - wages and productivity in non-farm
activities rise with education at an increasing rate, whereas
those in agriculture respond only to the primary education.
Keywords: human capital, returns to education, non-farm
employment, self-employment
JEL: O12 J24 Q12
Date: 2004-11
URL: http://d.repec.org/n?u=RePEc:hst:hstdps:d04-46&r=agr
8. The market for cocoa powder
Henk. L.M. Kox
The paper analyses the forces that shape demand and supply
processes in the market for cocoa powder. A brief statistical
summary is given of the main trends in international demand and
production, and the spatial shifts in cocoa processing. Ample
attention is given to the role of technology substitution and
price factors in production decisions. The paper separately
analyses the role of price, income levels and government
regulation in the demand for cocoa powder. In the final part of
the paper, all preceding elements are brought together in an
integrated simulation model of the cocoa processing industry,
showing the interactions between the market for cocoa powder and
other elements of the cocoa industry (cocoa, cocoa butter, cocoa
liquor, chocolate). Empirical evidence is presented with regard
to main parameters of the model.
Keywords: cocoa, cocoa powder, industry study, simulation model,
intermediate products, government regulation
JEL: D24 F14 L11 L19 L66
Date: 2004-12-06
URL: http://d.repec.org/n?u=RePEc:wpa:wuwpio:0412002&r=agr
9. Information and the Risk-Averse Firm
Robert G. Chambers (Dept of Agricultural and Resource
Economics, University of Maryland, College Park)
John Quiggin (Department of Economics, University of
Queensland)
This paper has two goals. First,we demonstrate that standard
arguments and methods from production and duality analysis can be
used to provide a comprehensive and general treatment of the
value of information for a risk-averse firm with expected-utility
linear-in-probabilities) preferences and a general stochastic
technology. Second, we place bounds on the value of information
for a risk-averse firm and relate these bounds to characteristics
of the technology and the producer's preferences. A particularly
striking observation that emerges from this representation is
that the most common representation of production uncertainty
corresponds to a polar case that trivializes the role that
information can play in economic decisionmaking under risk.
Keywords: state-contingent production, value of information
JEL: D8
URL: http://d.repec.org/n?u=RePEc:rsm:riskun:r203&r=agr
10. Separability of stochastic production decisions from
producer risk preferences in the presence of financial markets
Robert G. Chambers (Dept of Agricultural and Resource
Economics, University of Maryland, College Park)
John Quiggin (Department of Economics, University of
Queensland)
Separation results, as they are usually understood, refer to
conditions under which a firm's production decisions are
independent of its risk attitudes. Well-understood situations
where separation occurs typically include those where technically
feasible production opportunities are replicable in financial
markets. This paper gives necessary and sufficient conditions for
separation that go beyond these well-understood spanning
conditions. To do so, we present a unified treatment of the
production and financial decisions available to a firm facing
frictionless financial markets and a stochastic production
technology under minimal assumptions about the firm's technology
and objective function.Our main analytical tool is the derivative-
cost function, which gives the minimum cost of achieving a state-
contingent return vector through a combination of production
choices and trade in financial assets.
Keywords: state-contingent production
JEL: D81
Date: 2003-09
URL: http://d.repec.org/n?u=RePEc:rsm:riskun:r403&r=agr
11. Increasing Uncertainty: A Definition
Simon Grant (Department of Economics, Rice University)
John Quiggin (Department of Economics, University of
Queensland)
We present a definition of increasing uncertainty, in which an
elementary increase in the uncertainty of any act corresponds to
the addition of an `elementary bet' that increases consumption by
a fixed amount in (relatively) `good' states and decreases
consumption by a fixed (and possibly different) amount in (
relatively) `bad' states. This definition naturally gives rise to
a dual definition of comparative aversion to uncertainty. We
characterize this definition for a popular class of generalized
models of choice under uncertainty.
Keywords: uncertainty, ambiguity, risk, non-expected utility
JEL: C72 D81
Date: 2004-05
URL: http://d.repec.org/n?u=RePEc:rsm:riskun:r404&r=agr
12. Comparative statics for state-contingent technologies
John Quiggin (Department of Economics, University of
Queensland)
Robert G. Chambers (Dept of Agricultural and Resource
Economics, University of Maryland, College Park)
The implications of supermodularity for comparative-static
analysis in a generalized version of the separable-effort
representation of a firm facing stochastic prices and a
stochastic technology are. Previous analysis is generalized in
two ways. General risk-averse, as opposed to expected-utility,
preferences are considered. The stochastic technology is
represented by an Arrow-Debreu state-space representation. It is
shown that results familiar from the theory of the price taking
firm in the absence of risk generalize to the uncertain case.
Keywords: state-contingent production
JEL: D81
Date: 2003-11
URL: http://d.repec.org/n?u=RePEc:rsm:riskun:r503&r=agr
13. Supermodularity and the comparative statics of risk
John Quiggin (Department of Economics, University of
Queensland)
Robert G. Chambers (Dept of Agricultural and Resource
Economics, University of Maryland, College Park)
In this paper, it is shown that a wide range of comparative
statics results from expected utility theory can be extended to
generalized expected utility models using the tools of
supermodularity theory.
Keywords: isk aversion, Schur concavity, supermodularity
JEL: D81
Date: 2004-06
URL: http://d.repec.org/n?u=RePEc:rsm:riskun:r504&r=agr
14. Dual structures for the sole-proprietorship firm
Robert G. Chambers (Dept of Agricultural and Resource
Economics, University of Maryland, College Park)
John Quiggin (Department of Economics, University of
Queensland)
This paper presents a dual representation of firm-level and
market-level equilibrium behavior for a sole proprietorship
economy with competitive and frictionless financial markets and
stochastic production opportunities in a two-period setting. The
dual equilibrium model is used to state conditions for the firms'
production choices to be independent of their risk preferences in
equilibrium. These conditions entail Pareto optimality, but do
not require either that the firm's consumption choices lie within
the span of financial markets or the assumption of an extreme
version of linear risk tolerance.
Keywords: state-contingent production
JEL: D81
Date: 2003-12
URL: http://d.repec.org/n?u=RePEc:rsm:riskun:r603&r=agr
15. Environmental Labelling and Consumer's Choice - An Empirical
Analysis of the Effect of the Nordic Swan
Thomas Bue Bjorner
Lars Garn Hansen
Clifford S. Russell (Department of Economics, Vanderbilt.edu)
Provision of information on the environmental effects of
consumption is often put forward as an appealing alternative to
traditional means of environmental regulation such as permits and
environmental taxes. When consumers in opinion polls are asked if
their purchasing decisions would be influenced by information on
environmental or ethical aspects of products, the majority seem
very ready to say yes. However, evidence for actual behavior
along these lines is still limited. The paper presents an
empirical analysis of the effect of a certified environmental
label (the Nordic Swan), using a large Danish consumer panel with
detailed information on actual purchases from the beginning of
1997 to January 2001 (weekly observations). In 1997, few products
with the Nordic Swan label were available on the Danish market,
as Denmark did not join the program of the other Nordic countries
until April, 1997. Since then a considerable number of brands of
different products in the Danish market have obtained the label,
and the data includes information on purchases before and after a
number of brands obtained the Swan label. In the paper we use a
multinomial logit model to quantify the effect of the Swan label
on consumers' choices among different brands of toilet paper,
paper towels and detergents. It does appear that the Nordic Swan
label has had a significant effect on Danish consumers' brand
choices for toilet paper and detergents, corresponding to a
willingness to pay for the certified environmental label of 10-
17% of price of the labelled products. Results are less
conclusive for paper towels, but the environmental label appears
to have had less influence on the brand choice for the user of
paper towels. .
Keywords: Environmental labelling, information provision,
consumer brand choice
JEL: C25 D12 D64 Q28
Date: 2002-03
URL: http://d.repec.org/n?u=RePEc:van:wpaper:0203&r=agr
16. Managing natural resources in the Pacific Islands
Satish Chand
Not available
JEL: O13
Date: 2001
URL: http://d.repec.org/n?u=RePEc:idc:wpaper:idec01-6&r=agr
17. Productivity in the Australian Dairy Industry
Tom Kompas
Tuong Nhu Che
Although the Australian dairy industry has performed well it has
also faced considerable pressure over the past twenty years. A
decline in the terms of trade and major structural change has
provided added incentives for the industry to improve
productivity. This paper constructs Tornqvist index values to
measure and analyse movements in inputs, outputs, total factor
productivity (TFP) and the terms of trade for the dairy industry
as a whole and for each state over the years 1979 to 1999.
Overall, there is clear evidence of a significant increase in the
TFP index in the 1990s relative to the 1980s. However, in terms
of fitted annual growth rates, there is also evidence of a
productivity ?slow down? in the 1990s, with the principal
exception of New South Wales. Average annual growth in dairy
total factor productivity in Australia over the entire twenty-
year period is 1.5 per cent, but decreases from 1.8 per cent in
the first to 0.9 per cent in the second decade. In Victoria, the
largest dairy producer, the growth in TFP in the second decade of
the study is virtually zero, with poor weather conditions in the
second half of the decade partly to blame. Much of the impressive
growth in dairy output in the 1990s can thus be simply attributed
to a growth in inputs. Index values for the terms of trade, the
share of input costs in total costs and potential drives of
productivity change are also examined.
JEL: F14 O39 Q19
Date: 2003
URL: http://d.repec.org/n?u=RePEc:idc:wpaper:idec03-8&r=agr
18. Production and Technical Efficiency on Australian Dairy Farms
Tom Kompas
Tuong Nhu Che
The dairy industry plays an important role in both Australia and
the world dairy market. Domestically, it is one of the most
important agricultural industries, valued at $A3.7 billion a year.
Internationally, the industry exports more than $A3 billion a
year, making Australia the third largest dairy exporter in the
world. Using traditional farm survey input and output data and a
unique biannual data set on farm technology use, this paper
estimates a stochastic production frontier and technical
efficiency model for Australian dairy farms, determining the
relative importance of each input in dairy production, the
quantitative effects of key technology variables on farm
efficiency and overall farm profiles based on the efficiency
rankings of dairy producers. Estimated results show that
production exhibits constant returns to scale and although feed
concentration and the number of cows milked at peak season matter,
the key determinants of differences in dairy farm efficiency are
the type of dairy shed used and the proportion of irrigated farm
area. Overall farm profiles also indicate that those in the high
efficiency group employ either rotary or swingover dairy shed
technology and have (by far) the largest proportion of land under
irrigation.
JEL: D24 Q19
Date: 2004
URL: http://d.repec.org/n?u=RePEc:idc:wpaper:idec04-1&r=agr
19. Market reform, productivity and efficiency in Vietnamese
rice production
Tom Kompas
This paper analyzes the dramatic increases in rice output and
productivity in Vietnam due largely to market reform, inducing
farmers to work harder and use land more efficiently. The reform
process is captured through changes in effort variables and a
decomposition of total factor productivity (TFP) due to enhanced
incentives for two main reform periods: output contracts (1981-87)
and trade liberalization (1988-94). The results show that the
more extensive is market reform the larger the increase in TFP
and the share of TFP growth due to incentive effects, suggesting
that more competitive markets and secure property rights matter
greatly. However, in the post-reform period (1995-99), the
incentive component of TFP dissipates as a result of falls in the
price of rice and slow increases in input prices, especially for
hired labour, fertilizer and capital. A stochastic production
frontier is estimated to determine what farm-specific factors
limit efficiency gains. Results show that farms in the main rice
growing regions, those with larger farm size and farms with a
higher proportion of rice land ploughed by tractor are more
efficient, suggesting the need for additional reforms to augment
productvity. In particular, the requirement that rice be grown in
every province in Vietnam, restrictions on farm size (especially
in the north) and the slow development of rural credit markets
for capital and land are seen to restrict the level and growth of
efficiency substantially.
JEL: O13 O47 Q10
Date: 2004
URL: http://d.repec.org/n?u=RePEc:idc:wpaper:idec04-4&r=agr
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