Tracing the Effects of Agricultural Commodity Prices and Food Costs

We estimate a system of product and input-demand equations for food-processing industries to trace the links among farm commodity prices, food-processing costs, and food prices. Disembodied technical change, which likely reflects increasing consumer demand for convenience and product variety, has sharply reduced agricultural materials demand relative to most other food-processing inputs. This implies weakening impacts of farm price shocks on food prices. But improving quality and falling relative prices for agricultural inputs, in combination with increasing factor substitution, has counteracted these forces to encourage greater usage of agricultural inputs in food processing, and limit these trends.     

Effects of supermarket monopsony pricing on agriculture

Potential effects of alleged monopsony pricing of farm food products by supermarkets on farm product prices, quantities, incomes and land values are assessed relative to competitive behaviour. A long‐run comparative static equilibrium model is used. For export‐competing and import‐competing products, the farm food input supply curve facing the supermarkets is close to perfectly elastic and this limits monopsony behaviour. At the margin, the opportunity to reallocate agricultural land between traded and nontraded farm products means a highly elastic supply function for nontraded food inputs facing supermarkets and very limited monopsony effects.     

OPTIONS FOR REDUCING INPUTS TO AGRICULTURE: A NON-ECONOMIST'S VIEW

By adopting new (higher output) technology farmers have largely compensated for the steady fall in ‘real’ EEC farm prices: as a result food production is in surplus. Because immediate price cuts adequate to curb production are unlikely, further restriction on farm output (e.g., milk quotas) appears unavoidable. Farmers must then aim to reduce their input costs so as to produce their ‘quota’ as cheaply as possible. The paper examines options for reducing inputs, and concludes that more research on lower-input production systems is urgently needed, and that the economic discipline must be closely integrated with this research. It notes that a shift towards ‘less intensive’ farming would be in line with public concern on the environment, food quality and animal welfare.     

GAINS FROM TRADE IN INTERMEDIATE INPUTS IN THE UK FOOD SYSTEM

In this paper we report estimates of the specialisation gains associated with trade in intermediate agricultural and food inputs. A Vertically Integrated Sectors (VIS) modelling approach is employed to compare the levels of factors required to produce imported intermediate inputs domestically with those required to produce the “compensating” exports needed to purchase the imported intermediates. On the basis of the 1979 UK input-output tables, an average of 10.6 per cent fewer factors would have been required in agriculture and 2.2 per cent fewer in food processing with trade in intermediate inputs than without. The results support the view that the promotion of domestic production of agricultural inputs via import substitution would be costly.     

Farmers' Buying Selection Criteria of Agricultural Inputs

The Malaysian farmers' selection criteria of agricultural inputs, attitudes towards selecting the inputs, and the influence of socio-demographic factors in the selection of inputs were examined by using a personal interview with vegetable farmers. It was found that farmers perceived quality as most important criteria in selection of inputs, while advertising was perceived as least important. Vegetable farmers have favourable attitudes towards quality, product availability and fair prices, and less favourable attitudes towards advertising influence. The socio-demographic factors such as income, farm size, geographical distribution, education level, and ethnic group (race) have some influence on farmers' selection criteria of agricultural inputs.     

Examining the relationship between farm size and productive efficiency: a Bayesian directional distance function approach

Achieving sustainable food security and increased farm income will depend on how efficient production systems are in converting available inputs to produce outputs. Using data from Malawi, we estimate a Bayesian directional technology distance function to examine the relationship between farm size and technical efficiency. Our results support the existence of an inverse relationship between farm size and productive efficiency, where small farms are more efficient than large farms. On average, farms exhibit inefficiency levels of 60%, suggesting that productivity could be improved substantially. Improving productive efficiency and food security will require farms to operate in ways where the size of cultivated area is matched by nonland production inputs such as labor, fertilizer, and improved seeds. The results highlight the need for policies that could incentivize farmers to adopt productivity‐enhancing technologies and, where possible, to allocate excess land to lease markets.     

Food scares, market power and price transmission: the UK BSE crisis

This paper is concerned with the impact of food scares, principallythe BSE crisis in the UK, and focuses on price transmissionin vertically related markets. We show that if market powerhas an effect on the farm–retail margin, this determinesthe specification of the cointegrating relationship and thusprovides a test of market power. The results for the UK beefchain suggest that we cannot reject the importance of marketpower. The impact of the BSE crisis on farm prices is foundto be more than double that on retail prices, thus corroboratingpublic concerns regarding a differential impact of food scareson retailers and producers.     

Farm Input, Farm Output and Retail Food Prices: A Cointegration Analysis

This paper investigates the adjustment mechanism between farm input prices, farm output prices and food retail prices in Canada. Johansen's maximum likelihood approach is used in addition to the Engle-Granger approach to test for cointegration. Contrary to the common assumption that farm output prices are more flexible than farm input prices, it is found that farm output prices, though cointegrated, are weakly exogenous in the sense that they do not respond in a systematic manner to disequilibrium in farm input prices and retail food prices. Evidence is found to support “cost push” and “demand pull” theories but, since food retail prices carry a heavier weight in the cointegration relations, it can be concluded that shocks manifesting themselves (first) at the retail level do not persist as long. Cet ouvrage se concentre sur le mécanisme d'ajustement entre les prix des intrants à la ferme, les prix payés aux producteurs agricoles et les prix de l'alimentation au détail au Canada. Les techniques développées par Johansen et par Engle et Granger sont utilisées pour vérifier des hypothèses reliées à la cointegration. Contrairement à la présomption que les prix payés aux agriculteurs sont plus flexibles que les prix de leurs intrants, on a découvert que les prix payés aux agriculteurs, bien que cointégrés, sont exogènes au moindre degré dans le sens qu'ils ne s'ajustent pas en fonction du déséquilibre dans les prix des intrants et les prix de l'alimentation au detail. La théorie voulant que les prix montent à cause des hausses dans les prix des intrants est vérifiée de même que la théorie alternative voulant que les ajustements des prix se fassent du détail aux intrants. Fluctuations occasionées par des changements dans les prix de l'alimentation au détail sont dissipées plus rapidement que les ajustements causés par des variations dans les prix des intrants.     

A QUARTERLY MODEL OF THE AUSTRALIAN AGRICULTURAL SECTOR*

Several farm sector econometric models are reviewed initially and the aggregation problem highlighted. A thirty-equation model of the Australian agricultural sector is specified in which farm output, stocks and exports and the domestic demand for farm products are endogenous, as well as farm, export and retail prices. Disaggregation is into food and non-food components of unprocessed output, and the processing of food is traced through to final demand. The model is estimated by a modified 2SLS procedure using quarterly data covering the period 1960-1970.     

Spatial allocation and the shadow pricing of product characteristics

The paper considers an industry transforming primary commodities (farm products) into processed commodities (food products). It focuses on the allocation of embedded characteristics (carbohydrate, protein, etc.) both across space and among commodities. The approach generates a spatial competitive market equilibrium of production, consumption, transformation, and trade for both primary and processed commodities, along with the spatial distribution of shadow prices for the product characteristics. The model provides a basis for analyzing the allocation and pricing of agricultural products, food products, and characteristics in spatial markets. The empirical usefulness of the model is illustrated in the context of regional resource allocation in the U.S. dairy sector.     

Evolving Dynamic Relationships Between the Money Supply and Food-Based Prices in Canada and the United States

The objective of this paper is to analyze the relationships between the money supply and food-based prices (farm input, farm output, retail food prices) and shed some light on contradictory results in the literature by performing the analysis on two countries, testing and allowing for structural change, and decomposing long-run relationships in terms of speed of adjustment and adjustment amount. Money neutrality is rejected for all of the periods in both countries. However, some of the required conditions for money neutrality held temporarily in the U. S. This could be attributed to differences in policy-induced market signal distortions. In both countries, demand-pull forces have grown stronger, and the cost-push forces have grown weaker. In Canada, this is consistent with a growing and more concentrated retail sector exercising price leadership on farm input and farm output prices.     

High food commodity prices: will they stay? who will pay?

Much of the public discussion of the food price crisis has focused on the sharply increased use of food commodities for biofuel production, framing debate in simple food versus fuel terms. Reality is more complex. Multiple forces drove food prices to high levels and, according to findings we report in this article, these forces will sustain high prices over the medium term. We also find that the distinction between high world prices for food commodities and the consumer costs of food is an important one to make. Food consumers do not buy raw food commodities at international prices. The degree to which the price of traded food commodities and the price of food are related depends on a long list of factors, most of which operate to dampen price transmission. In the search for appropriate policy response, it is essential to measure consumer effects correctly and to apportion properly the causes of current high prices.     

Input and output technical efficiencies of wheat production in Kerman, Iran

The Iranian government encourages farmers to produce wheat (a common agricultural enterprise) by increasing farm productivity and efficiency. In this paper, using a Cobb–Douglas frontier production function, a simple relationship between a farm‐level output‐based technical efficiency measure (the Timmer index) and an input‐based measure (the Kopp index) is first developed. Then, using 1995 data from 164 farms in Kerman province, Iran, the average Timmer and Kopp indexes were estimated at 0.93 and 0.91, respectively, and were found to be similarly affected by farm size (positively up to about 9 ha) and by input ratios, though with rather small explanatory power. Thus, there seems some but limited scope to increase the profitability of Iranian wheat production either by increasing the product, given input levels, or by decreasing inputs for the current level of wheat production. However, since wheat producers may be able to adapt their production process more easily and quickly by implementing new techniques, i.e. by more efficient combination of inputs, than by adopting new technology, correction of input over‐use can be regarded as a policy with speedy if limited effect in this case.     

Slotting Allowances as a Facilitating Practice by Food Processors in Wholesale Grocery Markets: Profitability and Welfare Effects

Slotting allowances, which are lump-sum transfers paid by food manufacturers to grocery retailers in return for various retail concessions, are becoming increasingly common in wholesale grocery markets. This article extends the literature on slotting allowances by considering two features that previously have been ignored: the role of food processors in determining these pricing arrangements, and the effect of slotting allowances on the size and distribution of economic surplus. Slotting allowances motivated by food processors increase procurement quantities and farm prices, and this raises farm surplus, increases total producer surplus, and improves consumer welfare in the food system.     

实际价格、粮食可获性与农业生产决策——基于农户模型的分析框架和实证检验

按照市场一价定律的逻辑,所有生产者和消费者在市场上面临同一个价格并据此作出生产或消费决策。然而,农产品生产者和消费者的双重身份却导致农户在同一个农产品市场上得到或付出不同的价格,其差异主要取决于运销成本。因此,影响农户生产或消费决策的是其实际获得或付出的价格而非统一的市场价格。此外,出于对粮食安全的追求,农户所在地区的...     

The Influence of Labor Price Change on Agricultural Machinery Usage in Chinese Agriculture

The substitution between rural labor and machinery has been a key determinant of farm production, structure, and efficiency in most developed countries and is expected to play a key role in shaping the future of Chinese agriculture. Using disaggregated farm‐level data from Hebei and Shandong provinces of China, we calculated the Allen and Morishima elasticities of substitution between labor and machinery. These elasticities were based on seemingly unrelated regressions and three‐stage least squares estimates of the translog cost function and input cost share functions. In contrast to previous studies, we dissaggregate machinery inputs into three categories: large, medium, and small. In addition, the issue of endogeneity in output quantity and input prices is also addressed. The results show strong evidence of substitution between labor and the three categories of machinery inputs. The findings also support substitution among the three categories of machinery themselves.     

AN INTERMEDIATE INPUT MODEL OF DAIRY PRODUCTION USING COMPLEX SURVEY DATA

Agricultural production is often characterised by multiple inputs and multiple outputs to multiple production processes. Where an output from one process is used as an input to another, this output is called an intermediate product. This is a common situation when a farm produces both crops and livestock. The analysis of production efficiency is important for the evaluation of agricultural policy, but until recently, no methods have explicitly included intermediate products. This study applies a non-parametric technique of efficiency measurement which includes intermediate products. The data set is a sample of dairy farms drawn using a complex survey design. The use of non-parametric efficiency measurement and the subsequent application of bootstrapping and kernel density estimation to the results allow inferences to be drawn concerning the whole population from which the sample was drawn. We find that the decomposition of production into subproduction processes reduces the dimensions of problem specification, with the effect that a larger number of variables may be usefully included in the model.     

Changes needed in agricultural policy for female-headed farm families in tropical Africa

The decline in per-capita agricultural production has been reversed somewhat in tropical Africa by the structural adjustment programs which have increased producer prices, liberalized marketing and devalued currencies. But the 30% of smallholder farm households which are female-headed will not be assited much due to their special constraints of shortages of labor and credit, lack of extension visits and appropriate labor-saving technologies. For these households, the authors argue, improved extension services, credit for agricultural inputs, small ruminant animals and poultry, labor-saving devices and craft inputs will be necessary to increase their incomes and levels of living.     

国际石油市场变异与中国的能源战略

石油及其制品,无论作为生产中的中间投入,还是用于居民生活消费,都是一次性消费品,石油交易在本原上应属于产品市场.由于期货市场的发展,国际石油市场投机性增强,属性发生变异-从产品市场演变为具有产品市场和虚拟经济市场双重性的市场,并形成经济泡沫.在这样的市场上,消费者要被迫按资产价格购买消费品.这类泡沫很难消除,中国宜调整能源战略,以适应形势,抵御损害,使自己立于不败之地,并谋求长治久安之计.     

粮食、食品价格和CPI的VAR实证研究

综述了目前国内关于粮食价格、食品价格对CPI的影响机制的研究.选取2001年7月至2012年12月的月度数据,通过VAR进行了粮食冲击效应分析,采用Johansen检验进行了三者因果的验证,合理解释了食品价格和粮食价格、CPI三者之间的影响关系.结论：在研究的时间段中,粮食价格和食品价格的增长都会引起物价水平的增长;物价水平的上涨也会影响到粮食价格.但是,物价水平对食品价格、粮食价格对食品价格的变化却影响不明显.