Scale Effects and Mark-ups in the US Food and Fibre Industries: Capital Investment and Import Penetration Impacts

Capital investment patterns and import penetration are often alleged to influence firms' costs and prices, and thus economic performance. We examine the impacts of these factors on measures of scale economies, input demand/composition, and market power in the US food and fibre industries. Flexible variable cost functions incorporating quasi-fixity of three categories of private (internal) capital and two external technological and trade (import) factors represent the cost structures of the two industries. Pricing equations, based on inverse demand functions including import prices, represent output decisions. Cost and demand elasticities constructed from this model indicate reduced manufacturing costs from technical and trade, scale and capital effects. This increased cost efficiency arises largely from materials savings in the textiles industry and reduced labour use in the food industry. Mark-up behaviour is exhibited for most of the sample period in the textiles industry, and neither industry appears heavily affected by import prices.     

On the nature and magnitude of cost economies in hog production

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

Dynamic Area Allocation and Economies of Scale and Scope

This article applies the adjustment cost framework to the case of area allocation by simultaneously determining the levels of input demand and output supply. Dynamic measures of economies of scale and scope are defined for output‐specific areas. An application to a rotating sample of Dutch cash crops reveals that farmers have a strong incentive for specialisation, but that large adjustment costs for area allocation resulting in small adjustments toward the optimal level prevent them from doing so.     

Linkages between the farm and nonfarm sectors at the household level in rural Ghana: a consistent stochastic distance function approach

This article explores the effects within households of an expanding rural nonfarm (RNF) sector in Ghana. We ask whether the growing RNF sector allows for economies of diversification within farms, how it affects household input demands, and whether it has measurable effects in overall household production efficiency. We explore the intrahousehold linkages between agricultural and RNF activities, first assuming perfectly competitive input and output markets and then with market failures, in particular missing labor and credit markets. We then measure these linkages using a household level input distance function, finding high levels of inefficiency in Ghanaian farms. Also, there are cost-complementarities between the RNF sector and the agricultural sector, particularly with food crops in which the poorest tend to specialize. The expansion of the RNF sector increases demand for most inputs including agricultural land. Finally, we show that smaller farms tend to be more efficient, and that RNF output is helping the farm household to become more efficient, but the latter result is not robust.     

MANAGEMENT AND SIZE ECONOMIES IN THE ENGLAND AND WALES DAIRY SECTOR

Analyses of size economies in the England and Wales dairy sector have generally been made on the basis of comparisons of input-output measures. These measures have been classified according to input use and farm size and have led to conclusions about efficiency and structural change. This paper examines the influence of managerial ability on economies of size using econometrically estimated long-run average cost (LAC) functions from Milk Marketing Board data for 1980/1. The results show that the LAC curve is U-shaped though skewed to exhibit greater economies than diseconomies of size. Better managed farms are shown to produce any given level of output at lower average cost. Moreover, they have larger optimal levels of output.     

Economies of scale in the Swedish sawmill industry

In this study, scale elasticity and optimal size of the Swedish sawmill industry is investigated. An input distance function is used to compute scale elasticity. The result of the study shows that the average scale elasticity is above 1, indicating existence of economies of scale in the industry. By comparing the size of the average input - output vectors with the inefficiency adjusted input vector and the output vector for scale efficient units, we could see that, in general, there are gains to be made by expansion. However, some units may gain from becoming smaller.     

Market and Cost Structure in the U.S. Beef Packing Industry: A Plant-Level Analysis

A resurgence of consolidation in the U.S. meat packing industry in the past few decades has stimulated academic and policy debate. Issues raised include the role of cost economies in driving these patterns, and the effects on the agricultural sector (cattle producers) from market power. Here, plant level cost and revenue data for U.S. beef packing plants are used to estimate a cost-based model incorporating cattle- and output-market pricing behavior. The robust results indicate little market power exploitation in either the cattle input or beef output markets, and that any apparent evidence is counteracted by cost efficiencies such as utilization and scope economies.     

Decision-making Criteria for Purchasing Milk Quota at the Individual Farm Level

Dairy farmers wishing to contemplate purchases of additional quota should first consider what the appropriate time horizon on their investment should be. If the chosen time horizon is one year or less, the problem of estimating how much they can afford to bid for quota can be solved with simple budgeting techniques. On the other hand, if the time horizon is taken as several years, and this would seem rational, then capital budgeting techniques are required. However, in either case, investment in additional quota should be compared with alternative investment opportunities before a final decision is made. Where capital budgeting techniques are used, a modification of the net present value approach permits the farmer to take account of his time preference for money, and allows calculation of the break-even price, or the maximum affordable price to pay for additional quota. This approach necessitates the provision of estimates of the expected net returns from investing in quota for each year of the selected time horizon, as well as provision of estimates of the salvage value of the quota and an appropriate discount rate. The calculation of the expected net returns figures represents the most difficult task for the farmer. If expansion of milk shipments rests upon increasing output of milk per cow, then the short-run production function and marginal cost curve provide the appropriate reference points. The expected net return on investment in quota is then given by the area under the marginal revenue line and above the relevant portion of the marginal cost curve. If, however, all short-run variable input decisions have already been implemented at the optimum level, and expansion of milk shipments depends upon expanding the number of cows, or the “fixed” plant and equipment, or both, then the average total cost curve is the appropriate reference point. The expected net return on investment in quota is then represented by the difference between total net revenue at the new planned level of output and total net revenue at the existing level of output.     

DYNAMIC INTERRELATED DEMAND FUNCTIONS FOR FACTORS OF PRODUCTION AND THE AGGREGATE PRODUCTION FUNCTION IN UNITED KINGDOM AGRICULTURE

Taking the price situation as given in product and factor markets, a non-linear differential equation model of gross output, employment, capital accumulation, and gross input for united Kingdom agriculture is derived by incorporating internal adjustment cost functions into the representative decision-maker's objective function, and estimated using a discrete approximation. The results are consistent with efficient use of resources, but further incentives for capital investment and a greater exodus of labour could upset this. Adjustment costs as estimated account for 2.6 per cent of the value of output; those associated with net investment for 1.8 per cent, and those associated with employment and gross input for 0.57 and 0.23 per cent respectively.     

The Employment and Output Effects of Changing Patterns of Afforestation in Scotland

This paper considers the economy‐wide output and employment effects of the shift in forest expansion away from coniferous plantations towards broadleaf and native species. Four different woodland types are distinguished within a Scottish input‐output table and demand and supply multipliers estimated to show the total effects on the economy of a 100 hectare increase in the land area devoted to each type as well as a switch in land from agriculture. Results suggest that the output and employment effects of new native woodlands and farm woodlands are greater than those generated by planting additional coniferous woodlands of equivalent size. In addition, an increase in the area of these policy‐driven woodland types is likely to have positive effects, even when the expansion impinges onto agricultural land of average productivity. It is thus argued that the traditional economic objectives of forestry policy have not been compromised in the drive towards multi‐benefit woodlands.     

Food security,the labor market,and poverty in the Brazilian bio‐economy

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

京津冀协同发展下保定市建设用地对二三产业贡献的区域差异研究

作为京津冀核心城市之一,保定市土地供给与经济需求矛盾尤为突出。本文运用扩展后的柯布—道格拉斯生产(C-D)模型,测度2004-2013年保定市22个县(市)建设用地供给对二三产业的贡献,以期为保定市及各县建设用地科学管理提供依据。研究表明:2004-2013年保定市建设用地对二三产业的贡献值为12.69%,高于劳动力5.40%,低于固定资本78.47%;22个县市建设用地投入对二三产业发展贡献区域差异明显,这种差异主要受经济水平、区位条件、产业结构和资源条件等因素的影响。结论:保定市相关部门应因地制宜制定差异性建设用地供给指标,最大限度发挥有限土地资源产出水平,缓解土地供需矛盾。     

不同规模淡水鱼养殖投入产出比较分析——基于淡水鱼养殖成本收益面板数据的实证研究

淡水鱼养殖在我国水产业中占有非常重要的地位,深人研究淡水鱼养殖的投人产出情况具有重要意义。本文利用历年全国农产品成本收益资料汇编数据对不同规模养殖户——规模户和一般户的投入产出进行比较和经验验证,分析结果表明：淡水鱼单位面积养殖产值由资本、劳动力和技术进步决定;资本和技术对规模户的促进作用要高于一般户,而劳动力对一般户的单位面积产值具有明显的正面影响。     

土地托管影响粮食产出的内在机制及效率制约因素

本文从理论上揭示了土地托管影响粮食产出的内在机制及效率制约因素,并基于2014-2016年安徽、河南和山东3省10县调查形成的面板数据进行了实证检验。研究发现:土地托管对促进粮食产出具有显著影响。具体表现为:在土地托管模式下,通过整合粮食生产中的要素资源,有助于增加物质资本投入、改善人力资本结构,实现粮食生产过程中资本替代劳动以及高技能人力资本替代低技能人力资本,进而提高粮食产出水平。但在实践中,土地托管对粮食生产的促进效应还会受到土地资源条件和服务费支付方式等约束条件的影响。因此,在助推土地托管提高粮食产出水平的同时,不仅要注重要素投入的多样性,而且应关注要素投入的均衡匹配。     

Effective Costs and Chemical Use in United States Agricultural Production: Using the Environment as a "Free" Input

A cost–function–based production model is used to represent patterns of input use and output production in U.S. agriculture, and the implied costs of induced reductions in risk from agricultural chemicals ("bad outputs"). We estimate and evaluate shadow values for these harmful outputs, and the implied input– and output–specific substitution patterns, with a focus on the impacts on pesticide demand and its quality and quantity components. Using state–level data we find these measures to be statistically significant, vary substantively by region, and imply increased demand for effective pesticides associated with improvements in quality from embodied technology.     

The new economic geography of land use change: Supply chain configurations and land use in the Brazilian Amazon

In this paper we present a framework for understanding regional land use processes by incorporating the concept of agglomeration economies into agricultural frontier theory. We show that agricultural firms can obtain positive externalities from locating in close proximity to other agricultural firms, leading to agglomeration economies. Agglomeration economies lead to high levels of competition and diversity within a local agricultural supply chain and influence local prices, information flows, and private enforcement of environmental institutions. We use the theory of agglomeration economies to understand the development of soybean production in two counties along the Santarém-Cuiaba (BR-163) highway in the Brazilian Amazon: Santarém, Pará and Sorriso, Mato Grosso. We conclude that differences in environmental and land tenure institutions influenced the occurrence of agglomeration economies in these two counties, which in turn affected the total factor productivity of soy in each region. In particular, the supply chain became extremely competitive and diverse in Sorriso where few environmental regulations existed, while environmental restrictions reduced the diversification of the supply chain in Santarém. The presence of a soy agglomeration economy in Sorriso spurred innovation, increased productivity, and led to extremely rapid soy expansion in that county, while the monopolistic supply chain in Santarém reduced producers’ access to land and capital and impeded soy expansion.     

An Input-Output Analysis of the Impacts of Increased Export Demand for Saskatchewan Products

Five export scenarios were analyzed in this study. These included increases in the level of exports of: live cattle, slaughtered meat and meat products, grains, including wheat and other grains, crude oil, and potash. Each of these exports has a unique impact in terms of both absolute and relative values of several economic and resource demand criteria. A summary of rankings of the various scenarios' impacts is presented in Table 8. These rankings are based on the value of the economic and resource multipliers generated by each export scenario.
The above table indicates that there may exist trade-offs, in terms of the promotion of one type of commodity export versus another. For example, in terms of employment impacts, scenario B (meat and meat products) generates the largest impacts per dollar of final demand. Alternatively, this scenario is least preferred in terms of the contribution to provincial GDP and imports while at the same time requiring large amounts of energy.
The results presented in this paper can be applied for an analysis of regional economic development policies. That is, this type of analysis can be incorporated into a more general policy analysis of alternative regional development strategies. In this paper, only the benefits of expanded exports are estimated. The other side of the equation, of course, represents the costs of achieving these increased export levels. Examination of the excess capacity, investment needed to expand output and the opportunity cost of investment capital are important ingredients of the costs of achieving increased levels of export. However, in spite of these limitations, this study has shown that regional policy makers must be cognizant of the macro-level economic as well as resource use impacts of continued development of export markets.     

Sources of Subsectoral Growth in South Africa

Abstract

Although South Africa's growth performance has improved somewhat in recent years, it has generally been poor over the last few decades. This article uses Chenery's factor decomposition method to analyse the sources of growth in South Africa from 1970 to 2007. Using input–output data, the growth of each subsector is decomposed into components associated with export growth, import substitution, growth in domestic demand and growth in intermediate demand. The results highlight a dependence on domestic demand expansion as a source of growth since 2000, especially for manufacturing. Subsectors that relied primarily on domestic demand expansion generally performed relatively poorly. Technological change is the only component of growth with a consistently positive and statistically significant correlation with subsectoral growth. The analysis contributes to a better understanding of growth in South Africa, particularly in terms of subsectoral dynamics.     

Agriculture’s Inter‐industry Linkages,Aggregation Bias and Rural Policy Reforms

As agricultural policy reform and its effects have become increasingly territorialised, analyses that attempt to explain or predict impacts need to be both more localised and to identify spill‐over effects. Local and regional general equilibrium approaches have become increasingly popular because they can extend predictions of policy shocks obtainable from partial equilibrium sectoral models to identify the wider effects. However, agriculture is usually described as a single sector in input–output accounts, whereas policy shocks that affect constituent commodities with differential impacts will have inter‐industry effects that are different to those implied by average input–output coefficients. Regionalisation of aggregated input–output tables adds further to these difficulties. The objective of this study is to develop a practical method for dealing with these problems. It describes the theoretical basis of aggregation bias and shows how it can be measured, in two contrasting case study regions in the UK and Sweden. Having established that this is a significant issue, a simple but effective procedure is demonstrated, based on additional information on variable costs, which transforms policy shocks from a direct change in agricultural output to that transmitted to the suppliers of inputs. This method provides an impact close to that which could be calculated if the general equilibrium system had indeed been disaggregated, and supports use of this approach in impact studies where insufficient time or funding are available for complete disaggregation of an agricultural sector’s regional accounts.     

Accumulation by Dispossession and Socio‐Environmental Conflicts Caused by the Expansion of Agribusiness in Argentina

Drawing upon the concept of ‘accumulation by dispossession’, this paper analyses the expansion of agrarian capital in Argentina. A case study illustrates the social and environmental impacts of the expansion of agribusiness in central Argentina and the social struggle – both rural and urban – that has arisen to resist this process. Although government policies after the 2001 crisis differ in many ways from those of the 1990s, current agrarian policies are not significantly distinct from those followed during the pre‐crisis neoliberal period. Rather than ‘post‐neoliberal’, the new model could thus be better described as ‘neo‐extractivist’. With the connivance of the state, agribusiness is producing the largest‐ever transformation of natural capital into economic capital in the history of the region. Moreover, the latest policy developments suggest that Argentina is on the threshold of a new and deeper stage of agrarian capital expansion and wealth concentration, this time operating at a much larger scale.