Traceability in the Canadian Red Meat Sector: Do Consumers Care?

Increased traceability of food and food ingredients through the agri-food chain has featured in recent industry initiatives in the Canadian livestock sector and is an important facet of the new Canadian Agricultural Policy Framework (APF). While traceability is usually implicitly associated with ensuring food safety and delivering quality assurances, there has been very little economic analysis of the functions of traceability systems and the value that consumers place on traceability assurances. This paper examines the economic incentives for implementing traceability systems in the meat and livestock sector. Experimental auctions are used to assess the willingness to pay of Canadian consumers for a traceability assurance, a food safety assurance, and an on-farm production method assurance for beef and pork products. Results from these laboratory market experiments provide insights into the relative value for Canadian consumers of traceability and quality assurances. Traceability, in the absence of quality verification, is of limited value to individual consumers. Bundling traceability with quality assurances has the potential to deliver more value.     

Innovation and Future Direction of Supply Chain Management in the Canadian Agri-food Industry

The supply chains for agri-food products in Canada are being shaped by a number of forces including the globalization of markets, technological change and the increased focus by consumers — both domestically and internationally — on issues such as food safety, quality assurance and environmental sensitivity. This paper explores these changes, offering an explanation of why they are occurring, discussing the driving forces for change and providing examples from alternative supply chain structures in the Canadian agri-food sector.     

European Agriculture in the Wake of Globalisation: What are the Prospects for its Diversity?

The multifunctional European agricultural sector has not lost any of its significance for our society and our rural areas. Five building blocks and fields of action are of particular importance for the future: (1) Fulfilling our political responsibility in the current WTO negotiations, not only in economic, but also in social and ecological terms; (2) Recognising new opportunities and tapping into potential with foresight, potential which is currently becoming particularly apparent in the case of renewable resources; (3) Continuing to focus on the great strengths of the European agricultural sector: the long-term stability of our economic system, large market outlets virtually on our doorstep, high qualification and training levels, modern and efficient agricultural research systems and upstream and downstream industries, along with the wide variety of high-quality products and regional diversity; (4) Eliminating existing weaknesses, in particular by reducing bureaucratic obstacles; and (5) Early detection of threats and ensuring robustness and stability in European agri-food systems through development of adequate prevention and crisis response mechanisms. In this way, the 'European agricultural model' will become a motor for future development. After all, the multifaceted European agricultural sector can trigger and promote regional growth.     

Problems and Challenges in Reforming International Agricultural Economics

Starting from the premise that the agricultural economics profession is defined primarily by the range of problems on which it works, as opposed to the initial or developmental training of the individuals, the traditional analyses base narrowly on the neoclassical paradigm are increasingly insufficient for the problems commonly found in the agri-food industry. Two areas in which the profession is particularly weak are the economics and evolution of institutions, and the human capital component in economic development. For the latter, it includes both matching training to the nature and scope of problems facing individuals and the economics of human capital development and maintenance for a viable and growing agri-food industry. As well, new areas of endeavour such as environmental sustainability and property rights associated with biotechnology offer opportunity for leadership from the profession. Finally, with increasingly complex and interdependent problems in the agri-food sector, as well as the need to integrate processes for change into the analytical tool kit of the profession, the concept of strategic linkages across disciplines and professions will need to be pursued. Without such a multidisciplinary interdisciplinary approach, professional analysis founded narrowly on the neoclassical paradigm defeats the problem solving strength the profession has nurtured     

Making Markets Work: Modeling Agri-food Systems in Transition

Despite a decade of transition, the agri-food sectors of the former command economies consistently underperform relative to their potential. Underproduction and underinvestment are generally observed. This paper develops a model of bilateral monopoly linkages between firms along an agri-food supply chain. In the absence of competitive market forces and an efficient system of commercial law, deficient production and investment should be expected. If the agri-food sectors of the former command economies are to realize their potential, more resources will have to be devoted to reducing the transaction costs associated with broadening markets and enforcing contracts.
Bien que dix années aient passé, le secteur agroalimentaire des anciennes économies dirigées ne cesse d'enregistrer un rendement inférieur à celui auquel on pourrait s'attendre. La sous-production et le sous-investissement sont monnaie courante. Les auteurs proposent un modèle reproduisant le monopole bilatéral qui existe entre les entreprises du circuit d'approvisionnement agroalimentaire. En l'absence de concurrence sur le marché et d'un régime efficace de droit commercial, une production et des investissements insuffisants sont inévitables. Pour que le secteur agroalimentaire des anciennes économies centralisées réalise son potentiel, on devra investir plus de ressources afin de réduire les frais de transaction associés à l'élargissement des marchés et de garantir le respect des contrats.     

Reflections on technological progress in the agri-food industry: Past,present, and future

Technological advances—for example, from hand milking to robotic milking—are at the heart of economic transformation and have significantly shaped the agri-food industry and economic growth throughout history. A look at the lead article of the first issue (and the first volume, 1952) of the Canadian Journal of Agricultural Economics (CJAE) 70 years ago reveals an ongoing inquiry within the discipline about how technological progress has shaped how we manage our farms with the implications on aggregate industry productivity and food prices. The topics discussed along these lines in the first issue of the CJAE are still relevant today—for example, challenges with measuring productivity and innovation, diffusion of innovation, technological unemployment, demand for skilled workers, financing innovations, climate change and food security. Science, technology, and innovation for the 21st century hold the potential to foster resilient and sustainable intensification of farm production and productivity growth for the agri-food industry. In this address, I reflect on the past, present, and future impacts of technological innovations and productivity growth on the agri-food industry and discuss the implications for future research, welfare, and policy.     

Riding the Third Wave Implications of Biotechnology for the Canadian Seed Crop Industry

Biotechnology is causing dramatic changes in the seed industry on a national and global level. Further, the delivery of technology through seed is affecting all aspects of crop production. Coined the Third Wave of Development, it is a drive to meet specific end use traits through biotechnology. In light of this, the industry is seeing increased integration between all those involved in the chain of production. Adapting to this new environment creates significant challenges for the industry, including regulatory, international, handling, and structural.
As the Canadian seed industry changes dramatically to meet the specific needs of end users, there has been an increase in strategic alliances between both handling and seed companies to accommodate identity preserved production. There has also been an increase in mergers and acquisitions, as R&D companies attempt to marry novel trait developments with good germplasm and seed production expertise.
Yet, this is only the beginning as the integration of the seed industry with other aspects of the crop inputs sector applies even more pressure to integrate the agri-food industry right from plant breeding through to end use.     

Establishing a Framework for an Information System

Many decision errors arise out of a failure to understand the nature and structure of the information system that supports policy decisions, public or private. For a information system to be reliable and accurate three subsystems, data collection, inquiry (or analysis) and policy decision, must share the same base of concepts, measurable proxies porn the real world to represent those concepts, and compatible measurement techniques and processing designs in the data used. All information systems must be closely adapted to the specific context of the decisions they are intended to support.
Rapid globalization of markets and the parallel revolution in information technologies and supporting information infrastructure, institutions and human capital are transforming the agri-food sector. The food system is moving away from mass markets driven by the production of standardized commodities toward many smaller, diverse, and customized niche markets driven by consumer preferences for specific food characteristics. Concentration, vertical coordination and integration are growing, particularly in the livestock sector, and especially hogs. Information technologies now permit firms to discover and track consumer preferences while the new biotechnologies make it possible to create the characteristics in products that consumers desire in niche markets. Information has itself become an important commodity.     

Identity Preservation and International Trade: Signaling Quality across National Boundaries

Changing consumer preferences, technological advances, global agri-food markets and increasing regulation of food quality and safety have created the need for identity-preserved production and marketing (IPPM) systems, which bridge the gap between differentiated consumers' wants and traditional commodity-based agri-food production and marketing systems. The international trading regime is ill equipped to deal with these changes. In the absence of an agreed set of trade rules to regulate trade in differentiated food products, relying on IPPM systems or barring imports of "low-quality" goods become domestic policy choices. The latter is shown to be an inferior policy option. The sustainability of an IPPM across national boundaries is dependent upon its ability to credibly signal quality to consumers. Incentives to cheat erode this credibility. Horizontal and vertical cooperation through thirdparty certification are key to the long-run sustainability of IPPM systems.     

Information, Incentives and Institutions in the Agri-food Sector

This paper examines the factors driving changes in the agri-food sector with respect to food safety, quality assurances, technological change and the environment. External shocks change the nature, size and distribution of transaction costs, leading to institutional adaptation. Asymmetric and incomplete information provides the underlying theme of the paper, which draws on transaction cost economics to provide insights into the role of incentive mechanisms and institutions for the delivery of credible quality signals to consumers.     

Old and new partners: Similarity and competition in the EU foreign agri-food trade

This paper analyses the trade relationships among the EU-15 members and some emerging partners: the NMS, Turkey and China. The EU expansion to include 10 new countries has modified quite remarkably the features of agri-food trade in Europe. Some of the NMS, such as Poland, Hungary and the Czech Republic, significantly contribute to the international agri-food trade and, since the beginning of the process of EU accession, they have modified dramatically the exchanges with the EU-15. More recently, other countries such as Turkey and China have established new relationships with the EU. Turkey is a large Mediterranean country and, as a candidate to the EU accession, enjoys a differential treatment in the agri-food trade relationships with the EU. China can be considered as a new international competitor, growing at faster pace after having joined the WTO and increasing its agri-food trade exchanges with the EU. The analysis will focus on the measurement of the similarity of the agri-food exports of Italy and the remaining EU-15 member States with the new partners entering the EU-15 market. It will be carried out with the support of three different indicators: the export structure similarity index (ES), the product similarity index (PSI) and the quality similarity index (QSI), using the Eurostat database with an eight “digit” merchandize disaggregation and with reference only to agri-food exchanges. Results will indicate that there is little similarity, especially when a comparison is made between the exports of the EU-15 countries to the EU market. Moreover, quality remains a crucial factor for Italian and European agri-food products when competing with external products.     

Modeling and Measuring Productivity in the Agri-Food Sector: Trends, Causes and Effects

This article overviews recent trends in modeling and measuring productivity patterns, and in distinguishing their determinants and implications, for the agri-food sector. Theoretical methodologies as well as empirical implementation and results are discussed, with a view toward identifying those with potential for facilitating understanding of productivity measures, and ultimately using them for policy guidance. Productivity growth evidence for the food systems of the U.S., Canada and the U.K. is summarized, and recent studies distinguishing underlying causes of production structure patterns and linking them with market-structure patterns are reviewed, as a basis for assessing the key messages from and trends in this literature.
L'auteurfait un survol de révolution récente dans les domaines de la modélisation et de la mesure des courbes de productivité ainsi que de la caractérisation de leurs determinants et de leurs significations pour le secteur agroalimentaire. Il passe en revue les méthodes théoriques aussi bien que les applications empiriques et leurs résultats afin d'en dégager ceux qui pourraient faciliter la comprehension des mesures de la productivité et qui, éventuellement, pourraient servir de guide awe décideurs. L'auteur analyse les signes de croissance de la productivité des filières agroalimentaires observés aux Etats-Unis, au Canada et au Royaume-Uni. Enfln il examine les études récentes sur les causes sous-jacentes des évolutions des structures de production et sur leurs liens avec l'évolution des structures de marché, dans le but d'en dégager les messages et les tendances dés.     

Rural nonfarm activities and agricultural crop production in Nigeria

Although most rural households are involved in the farm sector, the nonfarm sector has grown significantly in recent decades, and its role in rural development has become increasingly important. This article examines the effect of participation in nonfarm activities on crop expenses of farm households in Nigeria. The relationship is modeled using a nonseparable agricultural household model that suggests that participating in nonfarm activities can relax the credit constraints facing farm households and reduce risk thereby helping households improve farm production and smooth consumption over time. The results show that participation in nonfarm activities by Nigerian farmers has a positive and significant effect on crop expenses and in particular on payments for hired labor and inorganic fertilizers. Separate analysis of the six geopolitical zones in Nigeria indicates that it is in the South-South and South-East zones where nonfarm participation appears to induce more hiring of labor. The results support the hypothesis that nonfarm participation helps relax liquidity constraints but suggests how that liquidity is used is zone-specific. In general, the results also indicate that liquidity is used more to pay for inputs into staple production as opposed to cash crops.     

Water Use in the Canadian Food Processing Industry

A number of studies have examined water use at the farm level, but water use by food processing firms has received relatively little attention. In light of current concerns regarding water conservation, the objective of this paper is to bridge this gap in our understanding of water use in the agri-food sector. Four aspects of water use (intake, treatment prior to use, recirculation and discharge) are examined for the Canadian food processing industry and three of its subsectors. Price and output elasticities are estimated using plant-evel data from a 1991 survey of water-using firms. Results indicate that all aspects of water use are sensitive to economic factors. Implications for government policies are identified.     

Science Policy and Agricultural Biotechnology in Canada

This paper examines Canadian science and technology (S&T) policies in the 1990s and the growth of the agriculture biotechnology sector. Drawing from several different data sources, we show that advances in biotechnology have made a substantive contribution to the agri-food landscape as evident by the growth in biotechnology companies, as well as the number of approved genetically modified field trials and canola biotechnology patents issued to inventors. We also show that Canadian inventors do not appear to have harvested a substantive number of enabling canola biotechnology patents as compared to U.S. and European inventors.     

How limiting is finance for Dutch dairy farms? A dynamic profit analysis

Accessibility to financial resources is considered a prevalent problem in the agricultural sector. We develop an approach to quantify the long-term opportunity costs of financial constraints in relation to peers who do not face any financial constraints. Using data on past financial performance, we assess creditworthiness and the size of an additional accessible bank loan to farmers. Combining this with data on reported expenditure, we determine the accessible finance. We quantify the opportunity cost as the forgone dynamic profit (intertemporal profit in current-value terms) from financial constraints. Using data envelopment analysis, we apply our approach to 264 specialised Dutch dairy farms for the years 2006–2017 and explore the potential impact of changes in finance provision for several scenarios. Our results show an increasing gap between frontrunners and other farmers, as the latter generate progressively less dynamic profit in comparison to their best peers. The gap between the dynamic profit of the average farm and that of its best peers from their production and investment decisions made over the span of 1 year grew from €40,040 in 2009 to €114,548 in 2017. However, the growth is not driven by insufficient access to finance. Financial constraints can only explain 6% of the forgone dynamic profit in 2009 and as little as 1% for 2017. The number of farms classified as financially constrained in comparison to their peers decreases in our sample from 44% in 2009 to 8% in 2017. This suggests that non-financial factors are driving the growing gap.     

Sustainability dimensions related to agricultural-based development: the experience of 50 years of intensive farming in Almería (Spain)

In the context of the current agri-food market, several factors have made it increasingly difficult to balance the components of sustainability in agricultural-based development. These factors include increasing internationalization, tighter control of distribution and frequent changes in agricultural policies. Indeed, in the framework of European rural policy there has been considerable debate in recent years concerning the role of the agricultural sector and how it should face the following challenges: productivity-competitiveness, environmental protection and socio-economic development. There is, therefore, a growing need for practical analyses that adopt a holistic approach. This paper analyses how this sector in the province of Almería (Spain), based on horticultural family farms, has risen to the above issues over recent decades. This case study provides some insights into the different trade-offs and synergies between sustainability dimensions. In particular, the integration of ecological, social and economic components may prove useful in helping other regions to adapt their agricultural systems, especially where these are characterized by small-scale farming.     

The Brazilian Cattle Sector: Status, Prospects and Controversies

The cattle sector in Brazil (and in other countries of South America) is substantial in terms of size and potential impacts in world markets. Due to the sheer magnitude and potential of the Brazilian cattle sector, it merits our attention. A trend to more productive cattle systems, new rules for trade in livestock products and more effective control of hoof and mouth disease in some areas of Brazil could cause it to become a more formidable beef exporter. Brazil also warrants attention because of the controversial practice of deforestation for cattle production in the Amazon rain forest. A vocal environmental lobby has decried cattle production in the Amazon, but this practice continues. This paper reviews the status, prospects and controversies of the beef sector in Brazil, with a special focus on deforestation and cattleproduction in tropical ecosystems.     

The price of sanctions: An empirical analysis of German export losses due to the Russian agricultural ban

The aim of this paper is to contribute to the vivid political discussion on the consequences of the Russian agricultural import ban on the German export market by quantifying export losses that German agri-food exporters encountered on the Russian market due to the agricultural import ban of 2014. A gravity-type approach is used to measure the sanction effect in a panel of German agri-food exports covering the period from January 1999 to June 2018. The ban effect is disentangled from a sequence of different geopolitically- and economically driven episodes. Once macroeconomic developments of the Russian economy as well as individual stages of decreasing trade cooperation in the preban period are accounted for, the import ban reduced German agri-food exports significantly but was not the major cause. Therefore, a simple elimination of the ban will not be enough to restore trade to the presanctions level.     

Pricing to Market Behavior by Canadian and U.S. Agri-food Exporters: Evidence from Wheat, Pulse and Apples

A fixed-effects model to control for time variation in marginal costs is employed to pinpoint evidence of price discriminatory behavior of Canadian and U.S. exporters of agri-food products. We test for evidence of pricing to market behavior and whether price discrimination or commodity/country characteristics may provide a plausible explanation. A distinguishing feature of our approach is to examine the time-series properties of the data by the conventional augmented Dickey-Fuller and recently developed panel unit root test. The panel data set employed in this paper consists of annual exchange rates and export prices for three agri-food products (wheat, pulse and apples) exported by Canada and the U.S. in foreign markets during 1980–98. Our fixed-effects model suggests that U.S. exporters are sensitive to exchange rate changes, while Canadian exporters in most cases raised price markups in response to a depreciated currency in overseas markets. The results highlight the differences in pricing policy that both countries employ to merchandise agri-food products in export markets.