On structural change,the social stress of a farming population,and the political economy of farm support

A rationale for providing support to the farm sector in the course of economic development and structural change is a growing gap between the incomes of non‐agricultural workers and the incomes of farmers. Drawing on a model that enables us to analyze the level of social stress experienced by farmers as employment shifts from the farm sector to other sectors, we find that even without an increasing gap between the incomes of non‐agricultural workers and the incomes of farmers, support to farmers might be needed/can be justified. This result arises because under well‐specified conditions, when the size of the farm population decreases, those who remain in farming experience increasing aggregate social stress. The increase is nonlinear: it is modest when the outflow from the farm sector is relatively small or when it is large, and it becomes more significant when the outflow is moderate. This finding can inform policymakers who seek to alleviate the social stress of the farming population as to the timing and intensity of that intervention.     

A general equilibrium analysis of production subsidy in a Harris-Todaro developing economy: an application to India

Since 1950s India has advocated import substituting industrialization policies to promote its manufacturing sector. The end result was creation of a dual economy: highly favored manufacturing sector with high and rigid wages and neglected agricultural sector with low wages and poverty. Because of the higher wages in the manufacturing sector, the rural laborers migrate to the urban sector, a typical characteristic of the Harris-Todaro developing economy. Realizing this crisis, the Indian government recently initiated policies to boost agricultural production to curb the labor migration and improve the welfare of the rural population. In this study, we develop a computable general equilibrium (CGE) model for India by incorporating Harris-Todaro economic characteristics of unemployment, labor migration, farm dependant population, and labor-intensive agriculture. We use the model to analyze the effects of agricultural production subsidy policies on employment, factor price, output price, output levels, and welfare in agricultural and manufacturing sectors. Our findings show that agricultural production subsidy increases agricultural production, reduces unemployment, raises the wage rate in the agriculture sector, augments the consumption among the rural and urban households, and increases the rental rate for capital in agricultural sector.     

Analysis of Sector Interactions and Stability in a Rural Region of NSW*

The technique of input-output analysis is applied to a statistical subdivision in the wheat-sheep zone of NSW for the purpose of analyzing the economic linkages between the rural and urban sectors of the region. The economic structure of the region is examined and the flow-on effects of changes in farm sector income on specific sectors and the region as a whole are analyzed. Finally, some implications of the results for stabilization and regional development are discussed.     

U.S. farm dynamics and the distribution of U.S. agricultural subsidies

The persistent instability of the agricultural sector is the fundamental premise of most agricultural policy. Yet no research has ever quantified the aggregate dynamics of individual farms in the US. This article is the first to combine the US Census of Agriculture with the Agricultural Resource Management Survey to observe the dynamics of nearly 1.5 million farms. The data reveal substantial variation in farm size expansion and contraction. Most of this variation is unobservable in the sector totals reported by the US Department of Agriculture each year. The distribution of agricultural subsidies suggests that subsidies become more important as farms get smaller and may play a role in slowing farm size contraction.     

Protectionary bias in agriculture: A pure economic argument

Empirical evidence suggests that the agricultural sector in the developed countries has enjoyed a greater degree of protection than the import-competing manufacturing sectors. Usually this is attributed to strong farm lobbies and hence on political factors. We provide a theoretical model and a possible explanation of this phenomenon based on purely economic arguments. Two importables are accommodated in a three-good three-factor model of trade and production, one is a labor-intensive manufacturing good and the other is an agricultural commodity. This captures the trade pattern of a typical industrialized country with an agricultural sector such as Europe and the USA. We show that uniform tariffs in agriculture and labor-intensive manufacturing will definitely hurt the land owners in real terms and may reduce their absolute return. Hence, if there has to be protection, it has to be biased in favor of agriculture.     

核心-边缘理论在区域旅游规划中的运用

核心－边缘理论为区域旅游规划提供了建构区域旅游空间结构系统的认知模型。运用这种空间结构模型，在进行旅游资源的区域整合，景区土地利用功能配置与都会城市旅游圈层构造，以及促进区域旅游联动发展方面可取得满意的实践成果，核心与边缘地区应该是一种平等竞争，优势互补，合作互嬴的空间关系，发展核心，带动边缘，是区域旅游发展的重要战略兴措，发展中地区要注意培育旅游核心区，形成旅游创新活动基地，带动边缘区域发展，壮在整个区域的旅游竞争力。     

Is wealth found in the soil or in the brain? Investing in farm people in Malawi

Should a typical developing country invest more in agriculture or education? At what stage of development is it optimal to invest more in each of these sectors? These are important questions that governments of developing countries grapple with when designing investment plans. In this paper, I propose a soil–human capital conceptual framework of development and use it to explain estimates of agricultural returns to schooling in Malawi. I use panel survey data for Malawi and rely on the exogenous education policy changes and spatial variation in access to schooling to identify effects of schooling on agricultural incomes. In addition, I correct for selection into income activities within a panel data and instrumental variables estimation framework. I find annual agricultural returns to schooling in Malawi of 3%–4% after correcting for selection and unobserved heterogeneity and 7% in the uncorrected specifications. I also find consistently higher returns to schooling in the nonagricultural sector for those not living in the village of birth and higher returns in the agricultural sector for those living in the village of birth. Given the size of the farm sector, wealth in Malawi is still in the soil, but that future growth in wealth depends on human capital investments.     

中国城市化与服务业的协调发展研究

城市化与服务业存在密切关系,通过构建两者的耦合协调度模型,对2001-2009年中国各地区城市化与服务业发展水平的协调程度进行比较分析,研究结果表明,中国各地区城市化与服务业发展水平都在不断提高,但地区差异较大,东部地区与中西部地区之间的差距扩大;城市化与服务业发展水平呈现显著的正相关关系;从协调度来看,各地区耦合协调度不断提高,优质协调的省份和严重失调的省份都较少,轻度失调和基本协调的省份较多;从耦合协调度的空间分布来看,东部地区耦合协调度明显优于中西部地区。     

The effects of macroeconomic factors on South African agriculture

Significant research efforts have been devoted to understanding the effects of macroeconomic factors on the agriculture sector. Analysing the sources of volatility in the industry is critical for designing appropriate policies to stabilize agricultural markets, reduce poverty and increase economic growth. Agriculture is a competitive sector with prices that are more flexible than those in nonagricultural sectors. This article uses annual data over the 1957–2004 period and a vector error-correction model in investigating the dynamic effects of exchange rates, money supply and other macroeconomic variables on the agricultural sector in South Africa. Overall, real exchange rates, interest rates, inflation and money supply (M3) shocks have significant and persistent impacts on agricultural output, prices received by farmers and farm input prices. M3 and interest rate shocks tend to put agriculture in a cost-price squeeze. Agricultural price movements are a source of macroeconomic instability in the country. Real exchange rate shocks shift relative prices in favour of agriculture in the long-run, thereby, boosting farm incomes and accelerating poverty reduction in the country.     

Assessing the socio-economic dimensions of the rise of organic farming in the European Union

Organic farming is considered one of the most important rural development tools in the European Union, often connected to the socio-economic objectives of small-farm support and employment generation. Using an EU-27 regional panel data-set from 2000 to 2010, I show that the share of a region’s agricultural area under organic methods is positively associated with average farm size. Furthermore, I show that the share of organic farming in a region is not associated with higher application of agricultural labor per hectare. Both results question the connection between organic farming and the aforementioned objectives, and point to the conventionalization of European organic farming.     

ECONOMIC GEOGRAPHY WITH TWO REGIONS: CAPITAL ACCUMULATION AND ECONOMIC STRUCTURE*

This paper proposes a compact two-region economic model with endogenous capital accumulation. The system produces one industrial commodity and service. Each region consists of one industrial sector and one service sector. The model describes the interaction between capital accumulation, the regional distribution of capital and labour, the division of labour, the capital distribution within each region, land rents, regional service prices and commodity prices over time and space. Accepting some simplifying assumptions, we show a way to integrate economic geography. equilibrium theory and neo-classical growth theory. We analyse how differences in regional resources such as land and amenities and the preference structure of the population may affect the equilibrium structure of economic geography.     

AGRICULTURAL PRICE AND INCOME POLICY: A NEED FOR CHANGE

Agricultural price and income policies operate within a framework established more than 50 years ago. This framework assumes that agriculture is dominated by "family farms," and that the agricultural economy is relatively independent of international and other domestic economic considerations. Yet, the structure of the farm sector today differs greatly from that of 50 or even 20 years ago. The U.S. economy relies on international markets to dispose of 20 to 30 percent of U.S. agricultural output. These changes call for reorientation of U.S. farm policy.     

A framework for implementing information and communication technologies in agricultural development in India

Knowledge is an increasingly significant factor of production in modern agriculture. Information and Communication Technologies (ICTs) can accelerate agricultural development by facilitating knowledge management. Based on an evaluation of several ICT initiatives in rural India, a framework to guide policy and implementation of ICTs in Indian agriculture is proposed. In this framework, agricultural development is visualized from two perspectives, a rural incomes and livelihoods perspective at the farm level, and a sustainability perspective at the regional level. The implementation of ICTs is proposed in three unique institutional environments: (i) closed vertical supply chain network for agribusiness enterprises, (ii) an open chain network with dynamically evolving partners and supply chain situations for the public, non-governmental and multilateral organizations, and (iii) a spatial data services network to address natural resources management and sustainability concerns. Each environment is assessed to identify its appropriate business models centered around ICTs, required technologies, scope for up-scaling the models, and required institutional and policy initiatives. In the future, as ICT infrastructure grows and connectivity and hardware costs decline, the critical constraints are likely to be the development of appropriate policy and institutional environments for the creation and delivery of information and knowledge to the end users. Significant policy, institutional networking and capacity building initiatives will be required at various levels to overcome the constraints and effectively integrate ICTs into the agricultural development process in India.     

THE FARM DEBT CRISIS: TEMPORARY OR CHRONIC?

This paper's objective is to analyze the etiology of the crisis confronting the farm sector and its creditors. It draws on data for the period 1950 to 1984 to argue that: (1) rising productivity of farm assets led to large increases in asset values during the 1950s, 1960s, and 1970s; (2) rising asset values significantly altered the incentive structure of agriculture; and (3) the resulting capital-gains based agriculture of the postwar period motivated farmers to alter their capital structure in ways that made the current financial debacle inevitable once the income growth from assets tapered. From this basis, the paper concludes that farmers' borrowing behavior was substantially more responsible for the existing crisis than often-cited adversities in the markets for agricultural commodities. Accordingly, a farm incomes policy cannot remedy the situation, and the current consolidation in agricultural debt—though painful—represents an unavoidable adjustment for American agriculture.     

An analysis of price and output behavior in the Indian economy: 1951–1973

This article attempts to analyze the behavior of prices — absolute as well as relative — and real outputs in the Indian economy over the period 1951–1973. This is done in a general equilibrium framework through specifying a macro-econometric model of the economy, emphasizing the supply constraints arising from the agricultural sector and the foreign sector. The model equations are estimated through two stage least squares estimation procedure, using annual data for the period 1951–1973. The impact of fluctuations in agricultural output and foreign exchange shortages on prices and outputs in the economy is explored within the model framework.     

Smartphone-based agricultural extension services and farm incomes: Evidence from Zhejiang Province in China

Smartphone use in rural China has grown rapidly, leading to the fast development of smartphone-based agricultural extension services. However, there is limited research on the income effects of smartphone-based agricultural extension services in rural areas. In this study, we analyze the causal effects of smartphone-based agricultural extension services (“Zhe'yang'shi” WeChat application as an example) on farm incomes in Zhejiang, China, using a staggered difference-in-differences method with panel data from 400 crop farmers. Our results show that adopting smartphone-based agricultural extension services increases farm income from soil testing formula fertilizer fields by 15.39% and total farm income by 16.31%.     

Mexican agricultural trade under the GATT

Expected effects from partially lifting tariff barriers on the Mexican agricultural sector are investigated using a restricted profit function (RPF) approach. Short-run and intermediate-run effects of the implementation of GATT minimum tariff provisions on Mexican agricultural trade are examined. Specification tests reveal the appropriateness of the RPF approach, that exports should not be aggregated with non-traded production into a single output, and that the farm sector behaves as an ‘almost’ price-taking, profit-maximizing firm. Policy simulations suggest important short-run changes in agricultural trade and chemical use and intermediate-run changes in agricultural trade, labour wage, chemical use, capital investments, and net farm income.     

Biotechnology Development in Spain: A Change of Paradigm?

This article presents a quantitative and qualitative analysis of the Spanish biotechnology sector, including its scientific, business, policy and social aspects. The study differentiates two sub-sectors, considered to be the most representative: Biopharma and Agro-food. The results show that biotechnology development in Spain has entered a new phase. Traditionally, research and development in Spain followed an unstructured path built around regional spaces and driven by factors and influences external to Spain. However, the emergence of a fast-growing sector of spin-off companies from the public research system, specifically in the Biopharma sector, points to a change of model of development of the industry, on the national as well as the regional level. The data also show the key role which public policy plays in creating a suitable framework for innovation and point to the need of analyzing the influence of social and cultural factors on the development of the biotechnology sector.     

The economic consequences of substituting carbon payments for crop subsidies in U.S. agriculture

There is a growing body of literature on the costs of sequestering carbon. However, no studies have examined the interplay between farm commodity programs and carbon sequestration programs. This study investigates two dimensions of the interaction between farm commodity programs and afforestation programs, using a price-endogenous sector model of agriculture in the United States. First, this study compares the fiscal and welfare costs of achieving specific carbon targets through afforestation, with and without current farm programs. Second, it examines the welfare, fiscal, and carbon consequences of replacing existing farm subsidies, wholly or in part, with payments for carbon. Two approaches, Hicksian and Marshallian, are investigated. In the first, the sector model is used to quantify the carbon consequences and fiscal costs associated with various combinations of farm commodity and carbon sequestration programs that leave consumers and producers in the U.S. agricultural sector no worse off than under existing farm programs. The second approach focuses on the carbon and welfare consequences of various farm commodity and carbon sequestration programs that hold total program fiscal costs constant at current levels. Althouth the methodology and data are applied to the United States, the issues addressed are common in a number of developed nations, particularly within the European Union (EU). Adapting existing sector models in these nations to perform similar analyses would provide policy makers with more precise information about the nature of the trade-offs involved with second-best policies for replacing farm commodity subsidies with tree planting subsidies.The research reported in this paper was partially funded by the United States Environmental Protection Agency under contract number 68W90077. It does not reflect the official position of that agency. Mention of trade names does not constitute endorsement.     

Biotechnology Development in Spain: A Change of Paradigm?

This article presents a quantitative and qualitative analysis of the Spanish biotechnology sector, including its scientific, business, policy and social aspects. The study differentiates two sub-sectors, considered to be the most representative: Biopharma and Agro-food. The results show that biotechnology development in Spain has entered a new phase. Traditionally, research and development in Spain followed an unstructured path built around regional spaces and driven by factors and influences external to Spain. However, the emergence of a fast-growing sector of spin-off companies from the public research system, specifically in the Biopharma sector, points to a change of model of development of the industry, on the national as well as the regional level. The data also show the key role which public policy plays in creating a suitable framework for innovation and point to the need of analyzing the influence of social and cultural factors on the development of the biotechnology sector.