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  • Measuring Farmer Risk Preferences in Europe: A Systematic Review
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-03-21
    Poorvi Iyer; Martina Bozzola; Stefan Hirsch; Manuela Meraner; Robert Finger

    We present a systematic review of the extensive body of research on farmer risk preference measurement across Europe. We capture the methodological developments over time and discuss remaining challenges and potential areas for further research. Given the constantly evolving policy environment in Europe, and increasing climate‐change related risks and uncertainties, there is large value to be gained from enhancing our understanding of this fundamental aspect of farmers’ decision‐making processes and consequent actions.

  • Measuring the Trade Restrictiveness of Domestic Support using the EU Common Agricultural Policy as an Example
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-06-06
    Kirsten Boysen‐Urban; Martina Brockmeier; Hans G. Jensen; Ole Boysen

    We develop an index that measures the overall trade effects of domestic support payments. Our index is based on the Mercantilist Trade Restrictiveness Index (MTRI) and is capable of analysing the development of the trade restrictiveness of domestic support payments over time and across countries. It facilitates the evaluation of agricultural policy reforms introducing changes in the composition of domestic support payments. We conduct this analysis with a computable general equilibrium model that is extended to depict detailed agricultural policies using the Common Agricultural Policy of the European Union (EU) as an example. For the representation of agricultural policies, we updated the underlying database by incorporating detailed EU domestic support payments taken from the OECD Producer Support Estimate (PSE) tables and reconcile PSE data with the WTO classification scheme. Our index confirms a decrease in trade distortion stemming from the implementation of decoupled support in the EU. In addition, the trade‐equivalent protection rate shows that the trade restrictiveness of domestic support payments depends on the assumptions made with regard to the degree of decoupling of those payments.

  • Setting Climate Action as the Priority for the Common Agricultural Policy: A Simulation Experiment
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-05-24
    Mihaly Himics; Thomas Fellmann; Jesus Barreiro‐Hurle

    We quantitatively assess the impacts of re‐allocating budgetary resources within Pillar 1 of the EU's Common Agricultural Policy (CAP) from direct income support to a direct greenhouse gas (GHG) reduction subsidy for EU farmers. The analysis is motivated by the discussion on the future CAP, with calls for both an increased ambition on climate action from the agricultural sector and for a more incentive‐based delivery system of direct payments under strict budgetary restrictions. By conducting a simulation experiment with an agricultural partial equilibrium model (CAPRI), we are able to factor in farmers’ supply and technology‐adjusting responses to the policy change and to estimate the potential uptake of the GHG‐reduction subsidy in EU regions. We find that a budget‐neutral re‐allocation of financial resources towards subsidised emission savings can reduce EU agricultural non‐CO2 emissions by 21% by 2030, compared to a business‐as‐usual baseline. Two‐thirds of the emission savings are due to changes in production levels and composition, implying that a significant part of the achieved GHG reduction is offset globally by emission leakage. At the aggregated level, the emission‐saving subsidy and increased producer prices compensate farmers for the foregone direct income support, but differences in regional impacts indicate accelerated structural change and heterogeneous income effects in the farm population. We conclude that the assumed regional budget‐neutrality condition introduces inefficiencies in the incentive system, and the full potential of the EU farming sector for GHG emissions reduction is not reached, leaving ample room for the design of more efficient agricultural policies for climate action.

  • A Belief‐Preference Model of Choice for Experience and Credence Goods
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-05-21
    Marco Costanigro; Yuko Onozaka

    We develop a methodology addressing the issue of confounded beliefs and preferences in models of discrete choice. First, we formalise the theoretical framework and logical underpinnings of a belief‐preference model of choice for experience and credence goods, where subjective beliefs relate to uncertain product quality. We then present the experimental procedure within the context of an online choice experiment studying consumer food preferences. The empirical strategy leverages information from a quality sorting task to identify and estimate beliefs, while choice data are used to recover preferences. By conditioning product choices on predicted quality perceptions, the issue of endogenous beliefs is resolved.

  • Evaluating Agricultural Productivity and Policy in Russia
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-06-19
    Nicholas Rada; William Liefert; Olga Liefert

    Russia's transition to a market economy in the early 1990s shocked its agricultural sector, creating the potential for profit and gains from specialisation and productivity improvements. However, subsequent regional agricultural development has been highly uneven, and the sources of the sector's productivity improvement remain unclear. Drawing on a newly‐assembled Russian regional farm production and policy dataset, we evaluate agricultural total factor productivity growth from 1994 to 2013, decomposing that growth into technical progress and efficiency gains, for the nation as a whole and for the major agricultural districts of the South and Central. We then test how investments in road and rail infrastructure and human capital have influenced those gains. The South substantially outperformed the Central district and the nation at large with respect to all three performance indicators. However, contrary to the literature, we find that these particular state policies provided no substantial growth advantages, there or elsewhere. Rather, the dominant force behind Russia's agricultural growth has been informal technical change.

  • Nutrition Transition and Changing Food Preferences in India
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-02-27
    Cherry Law; Iain Fraser; Matloob Piracha

    We present empirical evidence on how changes in food preferences have contributed to nutrition transition, where the dietary pattern of households shifts away from traditional staples. Using household‐level time series cross‐section survey data for India, we estimate time varying demand elasticities, revealing evidence of the declining importance of cereals in Indian household diets. The estimates show that Indian demand for cereals has become more income inelastic and price elastic. We also find that cereals are a substitute rather than a complement to animal products in household diets. Since changes in elasticities can only be attributed to variation in utility parameters, this indicates that cereals are losing favour with Indian households. These findings have implications for Indian food policy design and implementation.

  • Area Yield Index Insurance or Farm Yield Crop Insurance? Chinese Perspectives on Farmers' Welfare and Government Subsidy Effectiveness
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-04-12
    Tao Ye; Wuyang Hu; Barry J. Barnett; Jiwei Wang; Yu Gao

    We evaluate the performance of area yield crop insurance (AYCI) and farm yield crop insurance (FYCI) using farm‐level yield data from China, focusing on their effects on farmers' welfare, and their cost‐effectiveness in terms of government subsidy. Given a subsidy rate sufficient to generate a politically acceptable participation level, the price advantage of AYCI may no longer offset its higher basis risk, and consequently FYCI may be preferred by farmers. From the government's perspective, AYCI is the cheapest option to maintain reasonable farmer participation in insurance, but is not necessarily the most cost‐effective choice. Our findings suggest that, contrary to an assumption that informs many developing country agricultural insurance programmes, AYCI schemes are not necessarily preferred to FYCI. Decisions on the structure of a national agricultural insurance programme should be based on careful consideration of local conditions.

  • Adoption and Ex‐post Impacts of Improved Cowpea Varieties on Productivity and Net Returns in Nigeria
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-05-02
    Julius Manda; Arega D. Alene; Adane H. Tufa; Tahirou Abdoulaye; Alpha Y. Kamara; Olusoji Olufajo; Ousmane Boukar; Victor M. Manyong

    Cowpea covers the largest area of any grain legume in Africa and is especially important in West Africa where Nigeria and Niger alone account for over 75% of the total cowpea production in the world. Despite successes of international and national cowpea improvement research in the development and release of several improved varieties, there is limited empirical evidence of adoption and ex‐post impacts of improved cowpea. Using a nationally representative survey data from a sample of 1,525 cowpea‐growing households in northern Nigeria cultivating over 2,500 cowpea plots, we assess the adoption and impacts of improved cowpea varieties on cowpea yields, net returns and production costs. We apply a control function approach and propensity score matching models to estimate the causal effects of adoption of improved cowpea varieties. Our results show that 38% of the cowpea plots were planted with improved varieties, and cowpea yields, net returns and production costs increase significantly with the adoption of improved cowpea varieties. Adoption of improved cowpea varieties is associated on average with 26% yield gains, 61% increase in net returns and 14% increase in production costs. We also show that farmers who have a lower propensity to adopt improved cowpea varieties also face higher costs of production.

  • Understanding Heterogeneous Consumer Preferences in Chinese Milk Markets: A Latent Class Approach
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-04-05
    Xiang Wu; Bin Hu; Jie Xiong

    We examine heterogeneous consumer preferences in Chinese milk markets. Using a discrete choice experiment, we examine how the brand, quality certification, traceability label and price influence consumers' milk choices. We identify four consumer segments using a latent class model: price conscious (9.8%), balanced thinking (19.8%), health conscious (57.5%), and environment conscious (12.9%) consumers. These four segments have distinct preferences: price conscious consumers prefer green certification; balanced thinking consumers have the highest willingness to pay for traceability labels; health conscious consumers have strong brand awareness; and environment conscious consumers prefer organic certification and traceability labels and use price as a quality signal. Such diversity of consumer preference can be explained by four psychological factors: price consciousness, food safety concerns, health consciousness and environmental concerns.

  • Apparent Gains, Hidden Costs: Examining Adoption Drivers, Yield, and Profitability Outcomes of Rotavator Tillage in Wheat Systems in Nepal
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-04-29
    Gokul P. Paudel; Vijesh V. Krishna; Andrew J. McDonald

    The ‘high speed’ rotavator is used for shallow tillage to create a fine tilth and incorporate crop residues, often with a single tractor pass. Rotavator tillage has spread quickly in many parts of South Asia, despite short‐term experimental trials suggesting deteriorating soil quality and crop yield penalties. Evidence of rotavator impacts on farmer fields across soil gradients and time is largely absent. From a farm household survey conducted among wheat farmers in Nepal, we estimate wheat yield and profitability outcomes for rotavator adopters and non‐adopters using propensity score matching. We find that rotavator adoption leads to inferior outcomes, despite significant cost savings for land preparation (US$ 11–15 per hectare). With rotavator adoption, farmers lose about 284–309 kg of wheat grain and about US$ 93–101 of profits on average per hectare per season, and these penalties increase with longer‐term use of the technology. Adoption of rotavator appears to be driven by the cost and time savings for land preparation. Against this backdrop, new policy and extension efforts are required that discourage rotavator use and favour more sustainable tillage technologies.

  • Discouraging Rainforest Transformation: An Ex‐ante Policy Impact Analysis
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-05-14
    Arieska Wening Sarwosri; Johannes Wegmann; Oliver Mußhoff

    Despite extensive efforts made by national and international certification agencies, Indonesian smallholder farmers’ participation in palm oil certification schemes adoption remains low. A fundamental obstacle is the smallholder practice of rainforest transformation into oil palm plantation which is forbidden by the agencies. In this context, we investigate three policies that could lead to a reduction in rainforest deforestation by smallholders: price premium on certified palm oil; the provision of environmental information; contributor recognition. In order to evaluate the influence of the policies ex‐ante, we conduct a social dilemma experiment involving rubber and oil palm smallholders in Jambi Province, Sumatra, Indonesia. The findings indicate that the price premium and provision of context‐specific environmental information could reduce rainforest transformation. However, a statistically significant effect of contributor recognition was not found.

  • Multi‐Site Bundling of Drought Tolerant Maize Varieties and Index Insurance
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-06-04
    Sebastain N. Awondo; Genti Kostandini; Peter Setimela; Olaf Erenstein

    Drought Tolerant Maize Varieties (DTMV) and Rainfall Index Insurance (RII) are potential complements, though with limited empirical basis. We employ a multivariate spatial framework to investigate the potential for bundling DTMV with a simulated multi‐site and multi‐environment RII, designed to insure against mild, moderate and severe drought risk. We use yield data from on‐farm trials conducted by the International Maize and Wheat Improvement Center (CIMMYT) and partners over 49 locations in Eastern and Southern Africa spanning 8 countries and 5 mega‐environments (dry lowland, dry mid altitude, wet lower mid altitude, low wetland and wet upper mid altitude) in which 19 different improved maize varieties including DTMV were tested at each location. Spatially correlated daily rainfall data are generated from a first‐order two‐state Markov chain process and used to calibrate the index and predict yields with a hierarchical Bayes multivariate spatial model. Results show high variation in the performance and benefits of different bundles which depend on the maize variety, the risk layer insured, and the type of environment, with high chances of selecting a sub‐optimal and unattractive contract. We find that complementing RII with a specific DTMV produces contracts with lower premiums and higher guaranteed returns especially in dry lowland increasing the chances of scaling up RII within this environment.

  • Variation in Output Shares and Endogenous Matching in Land Rental Contracts: Evidence from Ethiopia
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-06-19
    Desta B. Gebrehiwot; Stein T. Holden

    We investigate the extent of variation in output sharing in land rental contracts and alternative hypotheses to explain this variation. Close to half of the rental contracts in our study in northern Ethiopia have output shares that deviate from the dominant 50–50 equal sharing. Variation in land quality, the relative bargaining power of landlords and tenants, production risks and shocks are hypothesised to influence output shares. Matched data of landlords and tenants are used. The importance of endogenous matching of landlords and tenants is investigated by assessing how endogenous tenant characteristics are correlated with landlord characteristics. We find evidence of negative assortative matching for key resource characteristics. A control function approach is used to control for endogenous matching in the output share models. The results reveal that production risks, as well as relative bargaining power, affect output shares in the reverse tenancy setting where tenants are relatively wealthier and more influential than landlords.

  • The Land Use Impacts of the EU Biodiesel Policy: Assessing the Direct, Indirect and Induced Effects
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-12-17
    Alexandre Gohin

    This paper deals with the controversial measure of indirect land use changes of the European biodiesel policy. Two studies sponsored by the European Commission find significant, but contrasted, land use impacts for the different vegetable oils used for biodiesel production. The first study uses an aggregate computable general equilibrium model capturing direct, indirect and induced effects. The second more recent study uses a biotechnical partial equilibrium model providing a detailed representation of the indirect effects occurring through the livestock sectors. We develop an original economic emulator to understand the diverging key results of these studies and test their sensitivity. We find that the direct and indirect effects on vegetable oil and land markets explain most of the differences. We also find that indirect effects on the feed markets and the induced effects have less influence on the biodiesel results. We finally argue that the development of emulators as done here can help to understand complex policy assessments.

  • Economic Loss Due to Reputation Damage: A New Model and Its Application to Fukushima Peaches
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-12-02
    Shigeru Matsumoto; Viet‐Ngu Hoang

    Consumers have responded negatively to agricultural products originating from the Fukushima prefecture after the 2011 Fukushima Daiichi nuclear power plant incident. These consumers’ behavioural changes have caused substantial economic losses for the producers located in contaminated regions through reductions in market prices, consumption quantities and market shares. Remarkably, these losses are observed also for uncontaminated products, posing an opportunity for research in reputation damage. However, existing literature is very rare on empirical modeling of such losses. We utilise the Dixit–Stiglitz demand framework to derive a simple but efficient empirical model that uses market data to quantify reputation damage. This model estimates changes in the perceived quality of a product originating in contaminated regions in relation to those products originating from other competing regions. The model also measures subsequent loss in market share for those products grown in contaminated regions. In our application to Fukushima, results suggest that consumers’ valuation of peaches from Fukushima decreased dramatically (between 22.5% and 23.6%) in the year the nuclear accident occurred, but rapidly recovered in the following years. The results also show that the degree of impact varies across wholesale markets. Fukushima farmers lost about 13.1–18.9% of sales due to reputation damage. Estimates from our proposed models deliver meaningful information in the context of policy interventions such as transfer programmes financed by gainers to compensate reputation losses.

  • Yield Variability and Harvest Failures in Russia, Ukraine and Kazakhstan and Their Possible Impact on Food Security in the Middle East and North Africa
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-12-02
    Sergio René Araujo‐Enciso; Thomas Fellmann

    Exports from Russia, Ukraine and Kazakhstan (RUK) help to improve global wheat availability and, hence, global food security. During the past 15 years, however, RUK wheat exports have shown high variability, mainly because they have been repeatedly diminished by severe harvest failures. We present an outlook for RUK wheat production and exports up to 2027, taking into account possible yield variability and harvest failures, and focusing on the impact on food security in the Middle East and North Africa (MENA), the world’s major wheat importing region. For the analysis we use the stochastic version of the Aglink‐Cosimo model. Simulation results show that wheat yields in RUK are a major source of uncertainty for international wheat markets. The projected substantial increases in world market prices due to limited RUK wheat exports threaten food security in MENA and highlight the need for both stabilising RUK yields and novel complementary food security approaches to decrease MENA’s vulnerability to disruptions in agricultural world markets.

  • How Do Cultural Worldviews Shape Food Technology Perceptions? Evidence from a Discrete Choice Experiment
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-11-15
    Yang Yang; Jill E. Hobbs

    Agricultural biotechnology (genetic modification) has encountered resistance from many consumers, resulting in disparate regulatory approaches across different jurisdictions. The recent advent of CRISPR‐Cas9, or gene editing, offers the potential for significant improvements in plant breeding. However, little is known currently about consumer responses to the technology. A factor often omitted from previous economic analyses of consumer acceptance of new food technologies is underlying human values or worldviews. Drawing upon cultural cognition theory and using data from a survey of Canadian consumers, we examine the influence of cultural values on food choice behaviours. Respondents’ pre‐existing cultural values are measured on two dimensions: hierarchy‐egalitarianism and individualism‐communitarianism. Choice behaviours are captured using a discrete choice experiment featuring a sliced apple product with two consumer‐oriented attributes (non‐browning and antioxidant‐enhanced) and three novel food technologies (gene editing, genetic modification, edible coating). Using a random parameters logit model with error components we find pre‐existing cultural values to be significant determinants of choice behaviours. Individuals pre‐disposed towards a hierarchical worldview are more accepting of novel food technologies, as are individuals with a communitarian worldview. While the use of gene editing results in negative marginal utilities in a food choice situation, the effect is not as large as with genetic modification, suggesting there is scope to ameliorate potentially negative reactions to the technology with value‐compatible messages.

  • The Evolving Structure of Chinese R&D Funding and its Implications for the Productivity of Agricultural Biotechnology Research
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-10-30
    Jinyang Cai; Weiqiong Chen; Jikun Huang; Ruifa Hu; Carl E. Pray

    China’s research and development (R&D) policy has changed considerably over recent decades, and great changes occurred in 2006 when the main programme objective of China’s R&D changed from the 863 Programme and 973 Programme to the National Science and Technology Major Project. One topic that has drawn extensive attention is whether the investment reform improved R&D productivity in China. Using a unique panel dataset from 160 universities, this paper examines the effect of the investment reform on productivity improvement in China’s agricultural biotechnology sector. We use a panel count data model with a dynamic feedback mechanism to model the knowledge production process. Strong evidence indicates that the investment reform greatly contributes to knowledge output production in China’s agricultural biotechnology sector. We also find that the input quality is more important than the absolute quantity; human research capacity exhibits the greatest contribution to the output of patents; past knowledge accumulation helps produce more patents; and entry barriers to patent production exist in China’s agricultural biotechnology sector. Moreover, the patent explosion in China may have been largely caused by improvements in the human capital input quality.

  • Competitive Storage, Biofuels and the Corn Price
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-10-28
    Christopher L. Gilbert; Harriet Kasidi Mugera

    The use of corn as an ethanol feedstock has been stimulated by US biofuels policy. This has changed both the position and the slope of the corn demand curve and increased the pass‐through from crude oil to corn prices. The principal constraints on ethanol consumption and production have been regulation (the biofuels mandate), capacity constraints in ethanol refining and the blend wall, which puts a ceiling on the ethanol content of gasoline. The incidence of these constraints has varied over time. We model these impacts within the competitive storage model using structural break regression analysis. Our analysis shows that the pass‐through has varied over time in relation to the share of ethanol in total US corn use. Our analysis provides robust empirical evidence of an increase in the pass‐through from crude oil to corn prices over the period from the start of the century to a high level over 2004–2008 when corn use in ethanol was growing very fast. This enhanced sensitivity was driven by competition for corn as an ethanol feedstock with stock demand exerting strong upward pressure on the corn price.

  • A Meta‐analysis of the Willingness to Pay for Cultural Services from Grasslands in Europe
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-09-16
    Robert Huber; Robert Finger

    We investigate the willingness to pay (WTP) for cultural ecosystem services from grasslands using a meta‐analysis based on 32 eligible research papers that provide in total 79 estimates. The average WTP (corrected for purchasing power) across these studies is 38 Euros per person per year. Yet, our analysis reveals that the transfer of these results needs careful evaluation. More specifically, it is essential to frame the monetary valuation exercise in relation to the direction of grassland change. A switch from cropland to grassland reduces WTP by 90 Euros while an increase in less‐intensive land‐use in mountain regions raises WTP by 53 Euros. We conclude that for an adequate consideration of grasslands in holistic ecosystem services assessments, the direction of grassland change is important.

  • Do Medium‐scale Farms Improve Market Access Conditions for Zambian Smallholders?
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-08-29
    William J. Burke; Thomas S. Jayne; Nicholas J. Sitko

    This study is motivated by the need to understand how the rise of medium‐scale farms in Africa is affecting small‐scale farm households. Survey evidence over the past decade has shown a dramatic rise in the prevalence of ‘medium’ sized farms between 5 and 100 hectares, but smaller farms still constitute the vast majority of farms and rural households. Prior evidence highlights a co‐evolution between the concentration of landholdings, surplus production volumes, and entry of larger traders into the market. Whether these changes tend to impact on smallholders negatively, crowding them out of markets, for example, or positively, potentially opening new marketing channels, is an empirical question. Using a multi‐stage model for maize market participation in Zambia, we find that in areas where medium‐scale farms are growing, even the smaller farms are becoming more likely to sell maize, more likely to sell to the private sector, more likely to sell to larger traders, and expected sales amongst sellers are higher. On balance, the growth of medium‐scale farms and large‐scale traders seems to have positive spillover effects on nearby smallholder marketing options.

  • Agricultural Commercialisation and Nutrition in Smallholder Farm Households
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-08-23
    Sylvester Ochieng Ogutu; Theda Gödecke; Matin Qaim

    Commercialisation of smallholder agriculture is important for rural economic growth. While previous studies have analysed effects of commercialisation on productivity and income, implications for farm household nutrition have received much less attention. We evaluate the effects of commercialisation on household food security and dietary quality with a special focus on calorie and micronutrient consumption. We also examine transmission channels by looking at the role of income, gender, and possible substitution effects between the consumption of own‐produced and purchased foods. The analysis uses survey data from farm households in Kenya and a control function approach. Generalised propensity scores are employed to estimate continuous treatment effects. Commercialisation significantly improves food security and dietary quality in terms of calorie, zinc and iron consumption. For vitamin A, effects are insignificant. Commercialisation contributes to higher incomes and increased nutrients from purchased foods, but it does not reduce the consumption of nutrients from own‐produced foods. Enhancing market access is important not only for rural economic growth, but also for making smallholder agriculture more nutrition‐sensitive.

  • Does Conservation Agriculture Change Labour Requirements? Evidence of Sustainable Intensification in Sub‐Saharan Africa
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-08-16
    Guillermo Montt; Trang Luu

    Population growth, increasing wealth and changing diets require agriculture in Sub‐Saharan Africa to intensify to meet future food demand and ensure food security in the region. Conservation agriculture can increase yields in the long run and reduce the negative environmental impacts of intensive farming. In changing the mix of resources used and how they are managed, the adoption of conservation agriculture can have a direct impact on farm labour. We study the relationship between conservation agriculture and labour input requirements as observed in five Sub‐Saharan African countries. We focus on the amount of work required and the source of the work employed (household or hired, by gender, by children and by production stage). We apply multinomial endogenous switching regression models on a panel of household and farm data from Ethiopia, Kenya, Malawi, Mozambique and Tanzania. We find that conservation agriculture increases farms’ labour input requirements. Higher demand is driven by more work during the harvesting and threshing stages. Increases in labour requirements are usually met by household labour, not paid work. The workload change is also higher for women than for men, and, in certain cases, is met by children.

  • Comparing Compliance Behaviour of Students and Farmers. An Extra‐laboratory Experiment in the Context of Agri‐environmental Nudges in Germany
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-08-12
    Denise Peth; Oliver Mußhoff

    Increasing popularity of economic experiments for policy impact analysis has led to an on‐going debate about the suitability of students to substitute professionals as experimental subjects. To date, subject pool effects in agricultural and resource economics experiments have not been sufficiently studied. In order to identify differences and similarities between students and non‐students, we carry out an experiment in the form of a multi‐period business management game that is adapted to an agri‐environmental context. We compare the compliance behaviour of German agricultural students and German farmers with regard to water protection rules and analyse their responses to two different green nudge interventions. The experimental results reveal that the direction of the response to the policy treatments is similar. Even unexpected behaviour could be reproduced by the student sample. Nevertheless, the magnitude of the treatment effects differed between the two samples. This implies that experimenters in the field of agricultural and resource economics could use the subject pool of students to analyse the direction of nudge policies. If predictions should be made about the magnitude effects, we suggest using a professional subject pool.

  • Food Safety and Adverse Selection in Rural Maize Markets
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-07-29
    Didier Kadjo; Jacob Ricker‐Gilbert; Gerald Shively; Tahirou Abdoulaye

    Without enforced standards or reliable third‐party verification, food safety threats such as pesticide residues and aflatoxin contamination are generally unobservable or only partially observable to both buyers and sellers, especially of staple foods in rural maize markets in sub‐Saharan Africa. As a result, sellers have more information about food quality than do buyers. Such information asymmetries can impede market development and undermine human health. We study farm household behaviour in the context of imperfect food safety information. We pool observations obtained from 707 food storage containers maintained by 309 farm households in Benin, surveyed following the maize harvests of 2011/2012 and 2013/2014. Our results indicate that when a household perceives a food safety risk associated with application of insecticides, on average it is 33 percentage points less likely to apply insecticides to maize it intends to consume than it is to maize it intends to sell. These individuals are also more likely to sell maize than households without food safety concerns. Results highlight the potential value of improved storage technologies and quality control to promote market transactions and reduce hidden health risks.

  • Trade effects of geographical indication policy: The EU case
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-07-17
    Valentina Raimondi; Chiara Falco; Daniele Curzi; Alessandro Olper

    Using a new detailed dataset on country‐product information on European Union (EU) Geographical Indications (GIs), we study the impact of this food quality policy on trade margins over the 1996–2014 period. We consider the effect of GIs on both intra‐ and extra‐EU trade margins (extensive and intensive), as well as on export (and import) unit values. Our main results show that GIs affect trade flows differently depending on whether GIs are produced by the exporter or importer country. The presence of GIs in the exporter country systematically exerts a positive trade effect on both the extensive and intensive trade margin. When registered only in the importer country, GIs seem to act weakly as a trade‐reducing measure, at least at the intensive trade margin. In addition, GIs positively affect export prices, consistent with the idea that GI products are perceived by consumers as higher quality goods. Importantly, extra‐EU trade margins react similarly to those on intra‐EU trade. These results have clear and interesting implications concerning the EU strategy of promoting the protection of GIs worldwide.

  • Profitability and Efficiency of High Nature Value Marginal Farming in England
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-07-17
    Mauro Vigani; Janet Dwyer

    The UK Brexit vote triggered a new wave of policy developments for a future outside the EU. In this context, we analyse the business performance of English hill and upland farms, characterised by marginal economic conditions but also high nature value (HNV). The analysis aims to help identify farm‐level management and policy options for greater economic, environmental and social sustainability. Business performance is measured as technical efficiency and the occurrence and persistence of abnormal profits, estimated through stochastic frontier analysis and static and dynamic panel‐data methods. The results help indicate rationales for recent trends including farm enlargement, farm family diversification, and agri‐environment scheme entry. The single farm payment is found to be negatively associated with farm technical efficiency while agri‐environmental subsidies were positively associated to short‐term farm profitability. Farm adaptation and resilience during a period of likely turbulence in external circumstances is discussed in light of these findings, as well as potential parallels with marginal HNV areas across Europe.

  • Sustainable Agriculture – Life beyond Subsidies: Lessons from New Zealand
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-08-09
    Caroline Saunders

    This address explores the importance for agricultural sustainability of different types of capital assets, especially knowledge capital, drawing on recent research in New Zealand that has aimed to expand the contribution of the primary sector to sustainable wellbeing. I begin with an overview of the theory on what constitutes sustainability and wellbeing, focusing on connections between wellbeing, capabilities and different types of capital stocks, and highlighting the importance of knowledge capital for wellbeing. Recent trends in New Zealand and United Kingdom agriculture provide the applied context for analysis of some key knowledge issues facing agriculture, framed by the capability theory of the firm following David Teece. The paper finishes with a brief conclusion on the implications for the UK.

  • The Effects of Non‐tariff Measures on Agri‐food Trade: A Review and Meta‐analysis of Empirical Evidence
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-01-10
    Fabio Gaetano Santeramo; Emilia Lamonaca

    The increasing policy interest and academic debates on non‐tariff measures (NTMs) has stimulated a growing literature on how NTMs affect agri‐food trade. The empirical literature provides contrasting and heterogeneous evidence, with some studies supporting the ‘standards as catalysts’ view, and others favouring the ‘standards as barriers’ explanation. To the extent that NTMs can influence trade, understanding the prevailing effect, and the motivations behind one effect or the other, is a pressing issue. We review a large body of empirical evidence on the effect of NTMs on agri‐food trade and conduct a meta‐analysis to disentangle potential determinants of heterogeneity in estimates. Our findings show the role played by the publication process and by study‐specific assumptions. Some characteristics of the studies are correlated with positive significant estimates, others covary with negative significant estimates. Overall, we found that the effects of NTMs vary across types of NTM, proxies used for NTMs, and levels of detail of studies. The estimated effects are also influenced by methodological issues and publication processes.

  • Consumer Willingness to Pay Price Premiums for Credence Attributes of Livestock Products – A Meta‐Analysis
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-03-15
    Wei Yang; Alan Renwick

    Livestock products, such as dairy and beef, are increasingly regarded as resource intensive and concerns are raised about animal welfare and environmental sustainability. As a result, consumer awareness of these issues has led to an increasing demand for products with high quality credence attributes (CAs) that cannot be directly experienced or identified. A number of empirical studies have attempted to estimate consumers' willingness to pay (WTP) for CAs, which represents the additional value placed on the benefits that they derive from those products. However, there are significant differences in these WTP estimates, mainly because both consumers' perceptions of CAs and the conditions of the studies vary. We conduct a meta‐analysis to examine consumers' WTP for different CAs of livestock products based on a systematic review of relevant studies. Meta‐regression models are used to control for the heterogeneity of WTP estimates and investigate factors that affect the estimation of WTP. Overall 555 estimates derived from 94 papers reporting WTP are included in this study. Meta‐regression results establish the presence of systematic WTP variation associated with types of products, CAs, and locations, though also indicate that WTP is subject to systematic variation associated with study methodology.

  • Willingness to Pay for Insured Loans in Northern Ghana
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-02-18
    Richard A. Gallenstein; Khushbu Mishra; Abdoul G. Sam; Mario J. Miranda

    Index insurance has been heralded as a potential solution to risk management problems faced by smallholder farmers in developing countries. Despite its potential, demand for standalone index insurance contracts has remained low in early field trials. We investigate the willingness to pay for drought index insurance‐backed loans in northern Ghana using contingent valuation. We find that index insurance lowers overall demand for agricultural loans. We also compare micro‐level index insurance, provided directly to farmers, with meso‐level insurance, provided to the credit agency and find that farmers appear to prefer micro‐level insurance. Finally, farmers are willing to pay to avoid basis risk.

  • Bilateral Information Asymmetry in the Design of an Agri‐Environmental Policy: An Application to Peatland Retirement in Norway
    J. Agric. Econ. (IF 2.506) Pub Date : 2018-12-06
    Wonjoo Cho; David Blandford

    Agriculture is a significant source of global greenhouse gas (GHG) emissions. GHG mitigation through agri‐environmental programmes could be important in achieving emission reduction targets under the 2015 UN climate agreement. This study uses the principal‐agent model to examine a peatland retirement programme to reduce agricultural emissions in Norway. The focus is on the role of the government's private information in programme design. Two cases are examined. First, optimal contracts are derived when farmers have private information about the costs of implementing peat land retirement, but the government reveals its information on the resulting public benefits through differentiated contracts. This corresponds to the standard targeting strategy with one‐sided information asymmetry. In the second case, an informed principal model developed by Maskin and Tirole in a 1990 study is employed to address bilateral information asymmetry. Using the informed principal model, the government offers the same menu of contracts to farmers in order not to disclose information on the public benefits from land retirement. Empirical results show that the government can achieve a higher payoff by using a pooling offer.

  • Attribute Specific Impacts of Stated Non‐Attendance in Choice Experiments
    J. Agric. Econ. (IF 2.506) Pub Date : 2018-11-15
    Suva Kanta Mohanty; Kelvin Balcombe; Richard Bennett; Giuseppe Nocella; Iain Fraser

    In this paper, we generalise existing approaches to the treatment of stated attribute non‐attendance data in discrete choice experiments by allowing attribute specific impacts. We implement this approach by employing an extended hierarchical Bayes logit model specification. To illustrate this approach, we consider data collected to examine Indian consumers’ preferences for traditional aromatic rice varieties. Our results regarding stated attribute non‐attendance reveal that, our new approach shrinks marginal utilities of non‐attenders substantially compared to stated attenders, with significant differences in the shrinkage between some of the attributes. In addition, our results reveal the way in which non‐attendance of attributes interact with each other and the impact that this has on the distribution of willingness to pay estimates.

  • Value‐Chains in the Andes: Upgrading for Ecuador's Blackberry Producers
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-04-12
    Jeffrey Alwang; Victor Barrera; Graciela Andrango; Juan Dominguez; Anibal Martinez; Luis Escudero; Carlos Montufar

    We apply a value chain approach to examine how blackberry producers in Ecuador can improve production and marketing practices to obtain more favorable prices. Results show that general upgrading actions are associated with improved producer prices, and specific activities, such as seeking information from reputable sources can lead to substantial welfare improvements. The paper goes beyond most value chain studies which treat participation in a ‘modern’ value chain as a discrete state. Ecuador's blackberry industry is evolving incrementally with no clearly discernible ‘modern’ market chains. Instead, producers incrementally make improvements in multiple dimensions. Relatively low‐cost practices, many of which do not imply substantial risk or investment, are associated with price improvements. Obstacles to participation in incremental value chain upgrading activities are not insurmountable. In particular, scale of production is not a limiting factor: small‐scale producers are not precluded from adopting improved practices and they do not suffer in terms of price received.

  • Adverse Shocks in Agriculture: The Assessment and Management of Downside Risk
    J. Agric. Econ. (IF 2.506) Pub Date : 2018-11-08
    Jean‐Paul Chavas

    This paper investigates the assessment and effects of adverse shocks on agricultural production, with an application to corn yield. Adverse shocks are assessed by the probability of facing low yields, i.e. by the probability of being exposed to downside risk. Defined in terms of willingness‐to‐pay to eliminate risk, the ex‐ante cost of facing adverse events is evaluated under prospect theory. Prospect theory is relevant in the evaluation of adverse shocks as it identifies a role for both loss aversion and oversensitivity to low probability events. The analysis is applied to experimental data on corn yield in the US Corn Belt. Estimates show how the distribution of corn yield is affected by management and technology. Implications for the cost of adverse shocks are examined. The results show how management and technology can reduce exposure to adverse shocks and lower the cost of risk in agriculture.

  • Contracting Institutions, Agro‐food Trade and Product Quality
    J. Agric. Econ. (IF 2.506) Pub Date : 2018-12-19
    Jan Fałkowski; Daniele Curzi; Alessandro Olper

    The agro‐food sector has experienced a profound transformation of contractual arrangements along the value chain, coinciding with important technological innovations and product quality upgrading. Our understanding of the impact that this transformation has had on trade flows in the agricultural sector is very limited. In particular, we have limited knowledge about the extent to which the patterns in agro‐food trade have been driven by the quality of contractual institutions. Using existing measures which capture the sensitivity of agro‐food products to contractual imperfections, we show that countries with better contract enforcement specialise in the production of food which requires higher level of relationship‐specific investments. We also find that countries with better contracting institutions and producing contract‐intensive goods specialise in exporting high quality foods. In addition, we show that the quality of contracting institutions might importantly affect the process of product quality upgrading.

  • Public–Private Partnerships for Biosecurity: An Opportunity for Risk Sharing
    J. Agric. Econ. (IF 2.506) Pub Date : 2018-12-19
    Rosa Mato‐Amboage; Jonathan W. Pitchford; Julia Touza

    Private efforts to prevent and control biological pests and infectious diseases can be a public good, and so incentivising private biosecurity management actions is both desirable and problematic. Compensation contracts can encourage biosecurity efforts, provide support against the collapse of economic sectors, and create an insurance network. We conceptualise a novel biosecurity instrument relying on formal compensation private–public partnerships using contract theory. Our framework explains how the public sector can harness increased private biosecurity measures by making payments to agents which depend both on their performance and that of the other stakeholders. Doing so allows the government to spread the risk across signatory agents. The framework also improves our understanding of government involvement due to public effects of biosecurity, influenced by the private agents’ capacity to derive private benefit from their own efforts on monitoring and control. Lastly, these theoretical results provide a foundation for further study of contractual responsibility sharing for pest management.

  • Herd Growth, Farm Organisation and Subsidies in the Dairy Sector of Russia and Kazakhstan
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-01-15
    Martin Petrick; Linde Götz

    Initially taken as a template for farm restructuring after the demise of collective agriculture, the ‘Western family farm model’ has taken root in the former Soviet countries only belatedly and incompletely. We examine dairy structures in Russia and Kazakhstan and analyse the drivers of recent herd growth. We are specifically interested in the role of farm management and organisation, vertical integration, and the role of policy. Regression analysis based on a sample of 180 randomly selected commercial dairy farms, using an innovative simultaneous equation framework, shows that better herd management and access to milk marketing contracts were more effective in stimulating herd growth than current subsidy payments. We do not find evidence that milking plants belonging to corporate entities or even supra‐regional agroholdings grow more substantially than medium‐sized individual farms. Twenty‐five years after the end of central planning, structural change among commercial dairy farms in Russia and Kazakhstan appears similar in many ways to the patterns observed in the West more recently: smaller farms catch up in terms of herd growth and classical family‐run operations coexist with or even emulate vertically integrated agribusinesses based on hired labour. In moving toward this ‘new normal’ of farming structures, commercial dairy farms in Russia may even be a few steps ahead of their Western counterparts. At the same time, the still sizeable but stagnating group of subsistence producers in rural households finds no equivalent in the West.

  • The Potential for Nitrogen Abatement Trading in Agriculture: A Hypothetical Market Experiment
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-02-18
    Line B. Hansen; Mette Termansen; Berit Hasler

    The effectiveness of nitrogen abatement trading as a policy measure relies on both heterogeneity in costs and environmental effectiveness across landscapes. Cost‐efficient implementation may therefore critically depend on spatial distributions of farm and farmer characteristics in water catchments. We use a spatially specific hypothetical market experiment to analyse the likelihood of farmers’ enrolment into nitrogen abatement trading contracts, and derive demand and supply functions for farmers’ nitrogen abatement. We find that farm characteristics influence both the decision whether to supply or purchase nitrogen abatement, as well as the amounts being traded. The derived demand and supply functions for farmers’ N abatement, using hypothetical market experiment data, can be used to reveal the variability in costs of abatement within a market. This provides valuable information to test potential trading schemes ex ante, to evaluate potential economic gains from policy implementation.

  • Product Differentiation and Cost Pass‐Through
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-02-03
    Jens‐Peter Loy; Christoph Weiss

    The present paper extends the existing literature on vertical price transmission and cost pass‐through by investigating the impact of product differentiation. We apply distance‐measures of product differentiation to a specific product market (yoghurt) within one country (Germany). Results from a panel‐error‐correction model for 30 products sold in 432 stores over a period of 312 weeks suggest that product differentiation explains a significant share of differences in cost pass‐through rates: more differentiated products command higher prices and are characterised by lower equilibrium cost pass‐through rates as well as more sluggish price adjustment.

  • Market Integration and Market Efficiency under Seasonal Tariff Rate Quotas
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-08-09
    Judith Hillen

    Switzerland applies seasonal tariff rate quotas (TRQs) for the import of many fruits and vegetables during the domestic harvest season. We examine how this system affects the relationship between Italian and Swiss tomato prices and test for physical market integration and spatial equilibrium conditions over time. We use detailed, transaction‐based data on trade flows and trade costs and estimate an extended parity bounds model, following Barrett and Li (2002). We confirm that in the summer season, when TRQs are in place, markets are inefficient. While quota holders receive positive rents, the marginal rents for importers without quota shares are negative. This inhibits trade flows above the in‐quota import quantity allowed by TRQs. Hence, despite leading to inefficiencies and creating rents for importers, seasonal TRQs are effective in protecting domestic production against competing imports.

  • Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects: Comment
    J. Agric. Econ. (IF 2.506) Pub Date : 2019-05-02
    Henry W. Kinnucan;

    Lloyd's review of the literature on food price transmission in the Journal of Agricultural Economics (2017) is incomplete in that it omits discussion of technical change and international trade. The purpose of this Comment is to explain why these topics are essential for a proper understanding of price transmission. As a by‐product of the discussion, I show that the pass‐through and pass‐back equations that serve as the basis for Lloyd's theoretical insights are more general than one might think based on Gardner's (American Journal of Agricultural Economics, 1975) discussion of these equations.

  • Estimating the Enduring Effects of Fertiliser Subsidies on Commercial Fertiliser Demand and Maize Production: Panel Data Evidence from Malawi.
    J. Agric. Econ. (IF 2.506) Pub Date : 2017-04-14
    Jacob Ricker-Gilbert,T S Jayne

    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.

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