Spatial determinants of productivity growth on agri‐food Spanish firms: a comparison between cooperatives and investor‐owned firms

This study analyses the effect of the spatial factor, location, and interaction effects among peer companies, on the productivity growth of agri‐food companies in Spain. With this aim, we build a productivity growth index and apply a multiequational Seemingly Unrelated Regression on a sample of 344 Spanish cooperatives and investor‐owned firms for the period 2010–2012. Our findings show that agri‐food firms are influenced by spatial factors finding interesting differences between cooperatives and investor‐owned firms. With regard to the geographical location, cooperatives in the western of Spain show higher productivity growth rates, whereas investor‐owned firms in the northeast of Spain present better results. The interaction effect among closer peer companies is also a relevant factor to determine the productivity growth in agri‐food companies. This factor is more relevant for cooperatives than for investor‐owned firms.     

Technology and the future bioeconomy

New discoveries in life sciences and the challenge of climate change are leading to the emergence of the bioeconomy where basic methods of advanced biology are applied to produce a wide array of products while also improving environmental quality. The emergence of the bioeconomy is a continuing evolutionary process of transition from systems of mining nonrenewable resources to farming renewable ones. This transition benefits from the modern tools of molecular biology that have expanded the human capacity to breed new organisms and utilize them to increase productivity in agriculture and fisheries as well as produce a wide array of products that were extracted in the past. This transition is leading to the integration of the agricultural sector with the energy and mineral sectors. The introduction of biotechnology has already improved the productivity of medicine as well as agriculture but, in the case of agriculture, has encountered resistance and regulatory constraints. The evolution of the bioeconomy requires continuous public investment in research and innovation as well as the establishment of a regulatory framework and financial incentives and institutions that would lead to continuous private sector investment in the development and commercialization of new products. One of the biggest challenges is the development of a regulatory framework that would control possible human and environmental externalities from new biotechnology products and, at the same time, not stifle innovation.     

Do farmers benefit from participating in specialty markets and cooperatives? The case of coffee marketing in Costa Rica1

Historically low prices in the conventional coffee market have caused financial and social hardship among coffee farmers. In the face of this crisis, specialty markets have attracted the attention of the international donor community. These market segments have shown consistent growth over the last decade and exhibit price premiums in international markets. Therefore, if higher prices are passed on to farmers, access to specialty markets could help to alleviate the crisis brought on by low prices in the conventional sector. The present study attempts to identify the factors that determine farmers' participation in specialized markets and whether participation in these markets leads to higher prices for farmers. A two-stage model is used to analyze farmers' marketing decisions and their effect on the prices received. This procedure allows us to control for the endogeneity bias introduced by the marketing choice. Our results indicate that farmers participating in the specialty coffee segment do in fact receive higher prices than those participating in conventional channels. Additionally, we find that participation in cooperatives has a positive impact on the probability that a farmer chooses to grow specialty coffee and analogously on the prices that they receive. Based on these results, it seems that efforts to increase participation in the specialty coffee segment and in cooperatives would help to lessen some of the hardships brought on by low prices in the conventional coffee sector.     

Enhancing productivity on suburban dairy farms in China

Dairy farms in China's suburban areas have been playing an important role in providing urban markets with fresh milk. With the rising demand for fluid milk and dairy products in the cities, there is a perception that small and scattered dairy farms in China's provinces are gradually disappearing and more concentrated dairy cattle farming is being formed near suburban areas. This article uses farm‐level survey data and stochastic input distance functions to make estimates of total factor productivity (TFP) on suburban dairy farms, as well as for the entire dairy sector. The results show that over the past decade TFP growth has been positive on suburban dairy farms, and this rise in productivity has been driven mostly by technological change. However, at the same time we find that, on average, the same farms have been falling behind the advancing technical frontier. We also find one of the drivers of the suburban dairy sector is the relatively robust rate of technological change of these farms, which has been more rapid than on farms in the dairy sector as a whole. The results suggest that efforts to achieve greater adoption of new technologies and better advice on how to use the technologies and manage production and marketing within the suburban dairy sector will further advance productivity growth in the sector.     

Multinationals vs. Cooperatives: The Income and Efficiency Effects of Supply Chain Governance in India

The impact of multinational firms on the domestic agricultural sector in developing countries is controversial, in particular in India. Relying on a unique set of household‐level data from the state of Punjab, we study the biggest dairy company in the world (Nestlé) in India and compare its vertical spillover effects on upstream suppliers to other market channels (informal sector and cooperatives). We find that farmers that supply informal channels are less efficient and earn lower profits per dairy animal than farmers supplying the cooperative and the multinational sector. Furthermore, we find that farmers using the multinational channel are more efficient than farmers in the cooperative channel, but equally profitable. Hence, we do not find that supplying the cooperative channel is more beneficial for local dairy farmers than supplying the multinational channel. Overall, however, dairy productivity and profitability levels are still dramatically low, with substantial scope for dairy development.     

Smallholders,institutional services,and commercial transformation in Ethiopia

This article examines the role of institutional services of credit, input supply, and extension in the overall commercial transformation process of smallholder agriculture in Ethiopia. Survey data collected in 2006 from 309 sample households in three districts of Ethiopia are used for the analyses. Tobit regression models are used to measure the effect of access to services on the intensity of inputs use for fertilizer and agrochemicals. A probit model is used to measure these effects on the adoption of improved seeds. Intensity of use of seeds is analyzed using an ordinary least squares model. Logarithmic Cobb–Douglass functions are estimated to analyze the effect of access to services on crop productivity. Heckman's two‐stage estimation is used to examine determinants of household market participation and the extents of participation. Results show that access to institutional support services plays a significant role in enhancing smallholder productivity and market orientation. Our results imply that expanding and strengthening the institutional services is critical for the intensification and market orientation of smallholder agriculture in Ethiopia. In particular, appropriate incentives and regulatory systems are urgently needed to encourage the involvement of the private sector in the provision of agricultural services.     

Do input subsidy programs “crowd in” or “crowd out” commercial market development? Modeling fertilizer demand in a two‐channel marketing system

Many governments in developing countries distribute fertilizer at subsidized prices in an effort to stimulate small farmers' agricultural productivity and food security. Prior fertilizer demand studies have largely failed to account for the effects of government programs on farmers' commercial purchases. Using a double hurdle model and nationally representative rural household panel data in Zambia, we distinguish between these sources and measure the contemporaneous "crowding in" and "crowding out" effects of government input programs on commercial fertilizer sales. Where the private sector is relatively active and average wealth is higher (areas seemingly more likely to be targeted by government programs), results indicate that subsidies have substantially crowded out the private sector, in some cases to the point that such programs could actually lower overall fertilizer use. On the other hand, in poorer areas where the private sector is relatively inactive, subsidies help to generate demand and crowd in private sector retailers. Empirical studies explicitly modeling farmers' fertilizer purchase behavior within a dual marketing framework can provide important insights for agricultural policy discussions in developing countries.     

Cooperatives, regulation and competition in Norwegian agriculture

This article analyses the efficiency of current market regulations and market structure in Norwegian agriculture. Based on their potential to coordinate farmers' supplies, large marketing cooperatives are assigned a market regulation role. However, market prices frequently tend to fall below target prices, spurring costly additional market regulations. This is not necessarily a result of inefficient coordination by the cooperative. Using a mixed market model, the study shows that over production may be explained by the competition between marketing cooperatives and investor-owned wholesalers (IOW), typically weakening the cooperatives' ability to coordinate market supply. This conclusion is robust over a variety of IOW contracts. However, to what extent competition is to blame, depends on the target price level and the contract structure of the IOW. Moreover, it is shown that current market interventions to remove excess supplies may induce further incentives to increase production.     

Does individualization help productivity of transition agriculture?

There are large differences across transition countries with respect to agricultural‐sector performance and corresponding scope of farm restructuring and shift to individual farming. In this article we analyze the impact of individualization on productivity growth within an augmented neoclassical growth model framework. This approach allows us to circumvent criticisms on the grounds of lack of theoretical and objective criteria for inclusion of explanatory variables. Furthermore, in the empirical analysis using a panel data covering 15 transition countries over the period 1990–2001 and applying a generalized method of moments with instrumental variable estimator we are able to control for the impact of various factors and the potential endogeneity of variables. Our estimation results are robust and support the view that the shift to individual farming, as well as the overall economic reforms, has positively contributed to the productivity growth in agriculture during the first decade of transition.     

Productivity growth and convergence in crop, ruminant, and nonruminant production: measurement and forecasts

Projections of future productivity growth rates in agriculture are an essential input for a great variety of tasks, ranging from development of an outlook for global commodity markets to the analysis of interactions between land use, deforestation, and ecological diversity. Yet solid projections for these variables have proven elusive—particularly on a global basis. This is due, in no small part, to the difficulty of measuring historical total factor productivity growth. Consequently, most productivity projections are based on partial factor productivity measures that can be quite misleading. The purpose of this work is to provide worldwide forecasts of agricultural productivity growth till the year 2040 based on the latest time series evidence on total factor productivity growth for crops, ruminants, and nonruminant livestock. The results suggest that most regions in the sample are likely to experience larger productivity gains in livestock than in crops. Within livestock, the nonruminant sector is expected to continue to be more dynamic than the ruminant sector. Given the rapid rates of productivity growth observed recently, nonruminant and crop productivity in developing countries may be converging to the productivity levels of developed countries. For ruminants, the results show that productivity levels in developing countries are likely to be diverging from those in developed countries.     

Public infrastructure and productivity growth in Greek agriculture

Recent research has focused on the effect of public infrastructure on economic performance. In this paper, a model of Greek agriculture's technology and behaviour is constructed based on the dual cost function framework. The model provides a decomposition of productivity growth into the components technical change, returns to scale, and public infrastructure. The empirical estimates indicate that public infrastructure investment provides a significant return to agriculture and augments productivity growth. Over the period 1960–1995, the impact of public infrastructure on productivity growth in livestock and crop production is found to be positive, although it has been declining since the late 1970s. These results strongly suggest that a decline in public infrastructure investment can partly explain the observed decline in the productivity growth of Greek agriculture in the 1980s.     

Size and industry effects in the performance of agricultural cooperatives

The objective of this study is to determine if there are important size and industry effects on financial performance of agricultural cooperatives. The performance of 43 dairy, food, grain, and farm supply cooperatives in the U.S. was analyzed over the period 1970-1987 using financial ratios derived from accounting data. The analysis revealed significant size and industry effects. Large regional cooperatives are more efficient in utilizing their assets to generate sales, while small regional cooperatives have higher profitability. The findings suggest that the emphasis on growth may not always produce beneficial results among agricultural cooperatives. Among the four industries studied, the dairy regional cooperatives appear to be the strongest performers, while the food marketing cooperatives are characterized by the lowest performance measures. Since both dairy and food cooperatives engage in value-added processing, this difference in performance makes it difficult to reach clear conclusions about possible advantages of disadvantages or vertical integration relative to traditional cooperative activities. Trend analysis indicates that the profitability of the agricultural cooperatives in all industry and size categories declined in response to the downturn in U.S. agriculture after 1980. While the decline in profitability was at similar rates for both large and small cooperatives, the variation of efficiency and leverage was in opposite directions. Large cooperatives may be expected to continue improving their asset utilization without relative improvement in profitability, and increasing the level of their debt in relation to equity.     

河北省蔬菜合作社发展的问题、潜力及对策

文章针对大农业市场发展的时代背景,分析了河北省蔬菜合作社发展中面临的主要问题及其发展的内在潜力和优势,继而提出河北省蔬菜合作社应以重质量、创品牌和规范管理为基础,进一步创新合作机制,逐步建立和完善现代营销模式,坚持发展循环农业和生态农业之路,推动合作社可持续发展及进一步增收增效。     

Capital market imperfections in economic transition: empirical evidence from Ukrainian agriculture

This article investigates the link between financing and investment in Ukrainian agriculture during economic transition. The main contribution of the study is to provide empirical evidence for the coexistence of financial constraints and soft budget constraints (SBCs). This is of particular importance because credit constraints and SBCs have completely different economic effects. The lack of differentiation between these forms of capital market imperfections yields overlapping effects of financing on investment and may therefore cause a misinterpretation of econometric results. Our empirical analyses are based on an econometric estimation of the Euler investment equations for 529 large farms from three Ukrainian regions between 2001 and 2005. The results confirm that financial variables significantly influence farms' investment, providing empirical evidence of an imperfect capital market in Ukrainian agriculture. It turns out that credit constraints in the Ukrainian agricultural sector are more important than SBCs. We show that the estimated level of financial constraints for profitable farms with access to loans is higher if both types of capital market imperfections are appropriately distinguished.     

Facing financialization: The divergent mutations of agricultural cooperatives in postapartheid South Africa

This paper analyses the transformation of the South African (former) grain cooperatives since 1994. These entities played a key role in the institutional architecture of the apartheid regime, ensuring the domination of white commercial farmers over the sector. Within the framework of the deregulation of the economy and the agricultural sector, such entities faced transformations of modern capitalism, especially the growing power of financial actors and markets. Although white commercial farmers still largely retain these inherited structures, these companies are presently being targeted more and more by private takeovers and/or private equity deals. Based on two specific empirical examples of private equity deals affecting South African grain cooperatives, this paper describes this financialization process in practice, in particular by analysing the interaction between financial and agricultural actors and the alliances on the ground that determine its “success.” In doing so, it details the different trajectories of these (former) cooperatives, highlighting the resilience, mutation, and extinction of commercial agriculture in South Africa.     

Assessing Total Factor Productivity Growth in Sub‐Saharan African Agriculture

The importance of the agricultural sector in the economic development process is well known. Improvements in agricultural productivity are often found to spill into other areas of a developing economy, potentially improving the standards of living of urban and rural workers alike. Given the importance of this sector, accurate measures of total factor productivity (TFP) across countries can be helpful in identifying conditions, institutions or policies that promote agricultural development. In this article, we estimate TFP growth in agriculture for a panel of 39 sub‐Saharan African countries from 1961 to 2007. We also develop a set of development outcome measures theoretically consistent with strong agricultural performance to serve as external validation of our results. We find that three estimation methods (stochastic frontier, generalised maximum entropy, and Bayesian efficiency) generate relative rankings that are consistent with the development outcome measures, providing external validation of the methods. However, the data envelopment analysis approach performs poorly in this regard.     

Mitigation potential and costs for global agricultural greenhouse gas emissions1

Agricultural activities are a substantial contributor to global greenhouse gas (GHG) emissions, accounting for about 58% of the world's anthropogenic non‐carbon dioxide GHG emissions and 14% of all anthropogenic GHG emissions, and agriculture is often viewed as a potential source of relatively low‐cost emissions reductions. We estimate the costs of GHG mitigation for 36 world agricultural regions for the 2000–2020 period, taking into account net GHG reductions, yield effects, livestock productivity effects, commodity prices, labor requirements, and capital costs where appropriate. For croplands and rice cultivation, we use biophysical, process‐based models (DAYCENT and DNDC) to capture the net GHG and yield effects of baseline and mitigation scenarios for different world regions. For the livestock sector, we use information from the literature on key mitigation options and apply the mitigation options to emission baselines compiled by EPA.     

Impact of cooperatives on smallholders' commercialization behavior: evidence from Ethiopia

This article examines the impact of marketing cooperatives on smallholder commercialization of cereals using detailed household data in rural Ethiopia. We use the strong government role in promoting the establishment of cooperatives to justify the use of propensity score matching to compare households that are cooperative members to similar households in comparable areas without cooperatives. The analysis reveals that although cooperatives obtain higher prices for their members, they are not associated with a significant increase in the overall share of cereal production sold commercially by their members. However, these average results hide considerable heterogeneity across households. In particular, we find that smaller farmers tend to reduce their marketed output as a result of higher prices, whereas the opposite is true for larger farmers.     

Economic development and the role of agricultural technology

In earlier debates on economic development, the agricultural sector's role was somewhat controversial. While dualistic models highlighted the importance of agriculture, the mainstream literature placed a greater emphasis on the creation of a modern industrial sector. Soon agriculture disappeared from the mainstream development literature to re‐emerge recently with a variety of multiple‐sector growth models emphasizing the key role of agriculture and specifically technology in agriculture. This article is an empirical cross‐country analysis of agricultural technology's role in economic development. Specifically, the hypothesis being tested is whether improvements in agricultural technology have a significant impact on long‐run economic growth. The results indicate that agricultural modernization has a positive effect on both measures of economic growth and human development.     

The impact of decoupled subsidies on productivity in agriculture: a cross‐country analysis using microdata

The decoupling of direct payments from production introduced in the reform of the Common Agricultural Policy is expected to make production decisions more market‐oriented and farmers more productive. However, ex‐post analyses of the productivity of farms have yet to uncover any evidence of a positive impact of the decoupling policy on farm productivity. Using Irish, Danish, and Dutch farm‐level data, we identify whether the decoupling policy has contributed to productivity growth in agriculture and farm product adjustment behavior. We find some evidence that the decoupling policy had significant positive effects on farm productivity and behavioral changes related to farm specialization.