An economic model of aboriginal fire‐stick farming

Australian Aborigines faced a resource management problem, which they addressed though burning regimes, referred to as fire‐stick farming. While dynamic economic analysis is clearly applicable, to date there have been no attempts to use it to model burning regimes. This paper develops a delayed‐response optimal‐control model to describe Aboriginal fire‐stick farming. The model explains a collective welfare maximizing burning regime that successfully controlled wildfires, protected the resources essential to survival, and, incidentally, produced a biodiverse landscape and limited greenhouse gas emissions. When the parameters of the model are changed to reflect the current institutional realities of reduced access to the land, and less direct dependence on it, traditional Aboriginal burning is prevented or delayed, fuel loads build up and uncontrolled fires are more likely to occur, damaging previously protected species. If Aboriginal burning is to be used to control fires successfully in a modern resource management context, it is necessary to adjust for changes in the institutional incentive structure. Payments for carbon offsets are an example of replacing lost incentives with new ones.     

Understanding Landscape Stewardship – Lessons to be Learned from Public Service Economics

We argue that public service economics provides a new perspective on landscape stewardship by explaining it as human‐to‐human transfer of partial property rights. These mutually linked exchanges involve rights to use, to access, or to control and allocate land, labour, skills or information. From the perspective of public service economics, we identify the actors involved in landscape stewardship and distinguish entrepreneurial strategies for service provision based on resource orientation, user orientation or competiveness orientation. The difficulties in evaluating the quality of services in general and landscape stewardship in particular result in substantial uncertainty. Three types of contracts that cope differently with this uncertainty can be distinguished: contracts focusing on the technical process, on the intended outcome or on the choice of suppliers based on trust and features of their performance potential. We conclude that a service economics perspective can add to the understanding of landscape stewardship. Due to the fact that ‘public service’ is already a well‐known and broadly acknowledged concept in society, public service economics could possibly provide more rapid progress towards a better co‐ordination of supply and demand for landscape qualities than other more novel concepts.     

Are In‐House and Outsourcing Innovation Strategies Correlated? Evidence from the European Agri‐Food Sector

We analyse European agri‐food firms’ choices about innovation in‐house or through outsourcing and provide empirical evidence about the correlation between these strategies. The relationship between the innovation strategy and firm‐, industry‐ and innovation‐specific characteristics is analysed through a bivariate probit model, which uses firm data from the EFIGE Bruegel‐UniCredit dataset. Transaction cost, resource base and knowledge governance arguments are used to explain the choice of innovation strategy. Our results show that the decisions to innovate in‐house or through outsourcing are independent from each other. In addition, we find that several organisational characteristics such as communication systems, human resource practices and specialisation are likely to influence both strategies. Conversely, organisational characteristics such as the allocation of authority and the business network do not seem relevant in determining the innovation strategies of the European agri‐food sector.     

Using an economic experiment to estimate willingness‐to‐pay for a new maternal nutrient supplement in Ghana

Scaling up access to supplements designed to prevent undernutrition, such as new small‐quantity lipid‐based nutrient supplements (SQ‐LNS), may require distribution via both public channels and retail markets. The viability of SQ‐LNS retail markets will hinge on household‐level demand. We use an economic experiment to characterize initial willingness‐to‐pay (WTP) for a maternal SQ‐LNS product in Ghana. WTP is positive for most participants, though below the estimated cost of production for many. WTP varies depending on income, assets, and parity status. These findings have implications for the design of public health policy and hybrid public–private delivery mechanisms.     

Home‐grown food and the benefits of sharing: The “intergenerational pact” in postsocialist Moldova

The policy literature on postsocialist Europe tends to frame smallholders' practices of food self‐provisioning and sharing as driven by necessity and proposes land consolidation to increase productivity and efficiency. However, these practices generate nonfinancial benefits, which need to be accounted for. In this paper, I test the socio‐economic relevance of these practices in the Republic of Moldova, the country with the highest density of farming households in Europe and whose government has embraced the rural modernization agenda to integrate into the EU economic space. I carry out quantitative estimates using the household budget survey and complement the results with qualitative insights from an original smallholder survey. I find that food self‐provisioning and sharing are positively related to subjective well‐being and that there is an “intergenerational pact,” with home‐grown food flowing from late‐adulthood smallholders to urban‐based young families and the vulnerable elderly. A counterfactual analysis shows that poverty and inequality would be higher in the absence of donated food, especially in urban areas. The preservation of smallholder farming through widespread access to land could thus help fight poverty and provide social benefits vis‐à‐vis land consolidation.     

Drinking water and off‐farm labour supply: between‐gender and within‐gender bias

In this paper, we use the China Health and Nutrition Survey (CHNS) panel data to analyse the impact of drinking water on off‐farm labour supply. A two‐stage least squares (2SLS) multivariate Tobit regression model with random effects was applied. We find that impacts of drinking water conditions on off‐farm labour supply may be greater for women than men but depends on the specific family role or family structure. A strong within‐gender effect exists in households. For example, daughters are not sensitive to water access nor water quality, but householder's spouses are sensitive to water access, and daughters‐in‐law are sensitive to water quality. Our findings suggest that infrastructure development in improved access to safe water has contributed positively to reductions in traditional gender biases, evening the playing field between daughters, daughters‐in‐law, mothers and mothers‐in‐law. We also find that water the infrastructure program may actually encourage off‐farm labour mobility, reducing the supply of agricultural labour and the share of household labour on the farm. Thus, a broader approach to water policy should also include public investment in achieving greater labour efficiency and productivity.     

Deregulation reforms,resource reallocation and aggregate productivity growth in the Australian dairy industry

Deregulation reforms in the Australian dairy industry had long‐lasting repercussions for Australian agriculture and the wider Australian economy. Using farm‐level data from 1979 to 2013, we investigate the effect of these reforms on productivity in the Australian dairy industry which arose from correcting resource misallocation between farms and across segregated state milk markets. Our results demonstrate that after the dairy reforms in 2000, relative market share shifted from less productive farms to more productive ones, and between farms using different production systems – generating additional productivity gains for the farm sector, but imposing some costs on downstream manufacturers by strengthening the seasonality of milk supply. Lessons from the Australian experience provide timely guidance for those countries exploring deregulation now or in the future to improve the industry‐level agricultural productivity growth through facilitating resource reallocation from less efficient to more efficient farms.     

Differential livelihood impacts of oil palm expansion in Indonesia

In this article, the impacts of oil palm adoption on livelihoods of smallholder farm households are analyzed. The study builds on survey data from Sumatra, Indonesia. Treatment‐effects and endogenous switching regression models suggest that smallholder households benefit from oil palm adoption on average. Part of the benefit stems from the fact that oil palm requires less labor than rubber, the main alternative crop. This allows oil palm adopters to allocate more labor to off‐farm activities and/or to expand their farmland. For households with a low land‐to‐labor ratio, rubber is typically a more lucrative crop than oil palm. Depending on various social and institutional factors, households’ access to land, labor, and capital varies, contributing to impact heterogeneity. Welfare gains associated with oil palm are more pronounced among households that have formal land titles and access to additional land to expand their farm size during the process of adoption.     

University licensing of patents for varietal innovations in agriculture

There has been a sharp increase in the number of patented agricultural varieties from public universities in the United States. We develop an experiment to examine the revenue stream to universities from licensing plant‐based innovations. In the experiment we asked subjects to bid for access for a patented input that would be used to produce a differentiated product; treatments were employed to solicit bids that were financed by fees, royalties, and a combination of the two mechanisms under exclusive and nonexclusive contracts. The literature studying the economics of downstream duopoly competition in quantity suggests that revenues for the innovator would be greatest under a nonexclusive contract that uses fees and royalties. In our experiment we allow more than two firms to obtain access to the patent in the nonexclusive treatments, and our empirical results suggest that innovator revenues are greatest when royalties are used alone in a nonexclusive contract.     

Efficiency Effects of Access to Information on Small‐scale Agriculture: Empirical Evidence from Uganda using Stochastic Frontier and IRT Models

Low power home electrical items such as radios, mobile phones and televisions are an important source of agricultural information for small‐scale farmers in developing countries. To empirically test the effects of access to information from these items on efficiency in agriculture, we formulate a stochastic frontier model augmented with a technical efficiency model that controls for an index capturing farmers' ‘ability to access information’. The index is constructed with a 2‐parameter item response theory (IRT) model based on farmers' access to the electrical items. Using six rounds of panel data on small‐scale farmers in Uganda, we find empirical evidence of a significant and positive relationship between farmer ability to access information and farm efficiency. There is also evidence that the size of these effects is larger for more literate hence better educated farmers. Greater access to information also appears to be associated with increased variance of (in)efficiency and output although the form of the increased variances is underpinned by low risk of lower efficiency and output realisations and high likelihood of higher efficiency and output realisations. Our findings imply that access to limited quantities of electricity needed to power these electrical items can have positive farm efficiency effects, and hence the importance of off‐grid electricity (e.g. standalone solar panels) for small‐scale farmers in typically isolated communities in developing countries.     

How well do conservation auctions perform in achieving landscape‐level outcomes? A comparison of auction formats and bid selection criteria

This paper studies the performance of auction design features regarding pricing mechanisms and bid selection criteria for securing wildlife zones across different holdings. We compare two pricing mechanisms: a discriminatory‐price auction and a uniform‐price ascending auction, and four bid selection criteria on the basis of: total bid, bid‐per‐value ratio, bid‐per‐area ratio and a mixed criterion where bids are formed on the basis of cost but they are selected based on the bid‐per‐value ratio. We develop a best‐response group‐bidding model for a discriminatory‐price auction where bidders form optimal group bids for individual wildlife zones. In the uniform‐price ascending auction, individual landholders respond to prices, which are successively raised by the auctioneer and whenever all the landholders from a single zone agree to participate (i.e. the first zone is formed), the auction stops. Based on numerical simulations using a bio‐economic model of malleefowl conservation, we observe that the discriminatory‐price auction is more cost‐effective than the uniform‐price ascending auction. However, the budgetary cost‐effectiveness of a discriminatory‐price auction is sensitive to bidder uncertainty about the number of competing bidder groups and the highest cost of establishing a wildlife zone among these groups. In terms of bid selection, the mixed bid selection criterion performs best. We discuss the policy implications of these findings.     

Adoption of Drought Tolerant Maize Varieties under Rainfall Stress in Malawi

We examine adoption of drought tolerant (DT) maize varieties using a four‐round panel dataset from six districts in Malawi. There is an increase in adoption of DT maize from 3% in 2006 to 43% in 2015 in our data. We focus on the effect of past drought exposure on adoption and the likelihood of DT maize being distributed under the Farm Input Subsidy Programme (FISP). Results show that past exposure to drought increases the probability of DT maize seed being distributed through FISP. Farmers who accessed maize seed subsidy coupons and were previously exposed to late season dry spells are more likely to use the seed subsidy coupon to redeem DT maize seed. The likelihood of adoption and adoption intensity (area under DT maize) are positively influenced by previous early season dry spells and access to seed subsidy. Previous late season droughts also positively affect adoption intensity. On the other hand, area share under DT maize is positively correlated with early season dry spells and past exposure to late season dry spells but negatively related to seed subsidy. FISP in Malawi appears to have stimulated adoption of DT maize directly through subsidy and indirectly through generating farmers’ experiences of the performance of DT varieties under drought conditions.     

Adoption of climate‐smart practices and its impact on farm performance and risk exposure among smallholder farmers in Ghana

Increased climate variability during the last four decades has made the agricultural environment in many developing countries more uncertain, resulting in increasing exposure to risk when producing crops. In this study, we use recent farm‐level data from Ghana to examine the drivers of individual and joint adoption of crop choice and soil and water conservation practices, and how adoption of these practices impacts on farm performance (crop revenue) and exposure to risks (skewness of crop yield). We employ a multinomial endogenous switching regression model to account for selectivity bias due to both observable and unobservable factors. The empirical results reveal that farmers’ adoption of crop choice and soil and water conservation leads to higher crop revenues and reduced riskiness in crop production, with the largest impact on crop revenues coming from joint adoption. The findings also show that education of the household head, access to extension and weather information influence the likelihood of adopting these practices. Thus, enhancing extension services and access to climate information and irrigation can reduce gaps in adoption of soil and water conservation and crop choice, considered as climate‐smart practices that will eventually improve crop revenues and reduce farmers’ exposure to climate‐related production risks.     

The impact of index‐insured loans on credit market participation and risk‐taking

Index‐insured loans offer considerable advantages over standalone insurance policies for improving farmers’ access to agricultural credit. However, research on demand for such products and their impact on profitable investment decisions has been limited and conflicting. In this article, we investigate the impact of index insurance on demand for credit and investment decisions using a lab‐in‐the‐field experiment conducted in rural Tanzania. We find that index insurance increases demand for credit and high‐risk high‐return investments.     

Forecasting housing land requirements

Summary

Because of pressures on the countryside by private housing development, the Government and the planners have become increasingly involved in planning policy issues and in forecasting land requirements. The forecasting techniques used are examined, and their translation into local allocations through structure and local plans and land availability studies are looked at. The demand for more land releases is attributed more to structural changes in the housebuilding industry and local land shortages in the south‐east than to real shortfalls in housing provision. There is a need for improved monitoring systems for land resource management, particularly in balancing ‘green‐field’ releases against development/redevelopment in existing urban areas.     

Vacant industrial premises and local development: A survey,analysis and policy assessment of the problem in Stoke‐on‐Trent

Summary

This paper presents the results of some survey work carried out in 1985 and in late 1987 on the subject of vacant industrial premises (VIPs) in the Stoke‐on‐Trent area. The issue of VIPs is briefly discussed at the outset and attention is drawn to the virtual information void that exists as regards the topic. The main core of the paper discusses the results of a survey of VIPs conducted in Stoke‐on‐Trent in 1985 and 1987. A typology of VIPs is suggested and, using a components of change approach, trends in the mid‐1980s are analysed. Detailed consideration is made of individual components ‐ including premises persistently vacant and reoccupations ‐ and several themes are developed. These include questions of the local distribution of VIPs components; the problems of returning premises to use; and the policy issues involved. The survey results reveal that over 3 million ft² of vacant industrial floorspace was available in early 1985 but that the figure had fallen to less than 2 million ft² by late 1987.     

The impact of water access on short‐term migration in rural India

Migration is an important risk‐reduction strategy for households in developing countries. In this paper, we examine the impact of rainfall variability and irrigation availability on short‐term migration decisions in India. Our results show that both rainfall shocks and the availability of irrigation impact the decisions of households to dispatch migrants. For irrigation, we find that migration responds to costs and that deep fossil‐water wells, which provide a constant source of water, eliminate any benefit of short‐term migration. This suggests that regions with access to more secure and stable sources of water are less likely to rely on migration as an income‐smoothing mechanism, at least in the short run. Whether this holds in the long run will depend on the continued stability and availability of irrigation water.     

Beyond One‐Size‐Fits‐All: Differentiating Market Access Measures for Commodity Systems in the Kenyan Highlands

Market access measures employed by economists and spatial analysts may not adequately capture local market or product‐specific variation. Analysis is conducted on the effects of market access on two commodities in the Kenyan highlands: milk and bean seeds. Both simple and composite measures of market access are applied to spatial price formation models to create spatial price decay functions in the context of household‐specific transaction costs. Composite measures of market access include negative exponential (using travel time or distance as cost) and gravity measures. The results demonstrate that the effects of market access differ significantly depending on the particular goods of interest. Simple measures of market access have the advantage of being more easily interpretable, and should therefore be preferred when communicating research outputs to the non‐scientific community, especially decision‐makers. The implications are that research addressing commodity‐specific development questions needs to look beyond generic measures of market access and develop tailored measures that reflect the characteristics of the commodity system of interest. The analysis also demonstrates that spatial price formation can be used to generate potentially more accurate measures of unit‐distance marketing costs.     

Does a nutritious diet cost more in food deserts?

Food deserts and their potential effects on diet and nutrition have received much attention from policymakers. While some research has found a correlation between food deserts and consumer outcomes, it is unclear whether food deserts truly affect consumer choices. In this article, we compare food prices in food deserts, defined as low‐income, low‐access census tracts, and nonfood deserts to observe whether and to what extent consumers face higher prices for a complete diet in food deserts. If a nutritionally complete diet costs significantly more in food deserts, resident consumers may be constrained from consuming healthier foods. We use store‐level scanner data from a nationally representative sample and calculate a census‐tract level Exact Price Index (EPI) based on a food basket defined by the Thrifty Food Plan (TFP). The EPI addresses potential biases from both product heterogeneity and variety availability. We find that the overall price impact of living in a food desert is small; low‐access areas have only 3.5% higher EPI than high‐access counterparts. However, consumers who are constrained to shop within their own census tracts face a much higher EPI than high‐access counterparts (9.2%). The higher EPI primarily comes from lower variety availability in food deserts.     

Socio‐economic differentiation from a class‐analytic perspective: The case of smallholder tree‐crop farmers in Limpopo,South Africa

South African agrarian policy aims to integrate smallholder tree‐crop farmers into high‐end value chains with growth and employment potential, generally neglecting socio‐economic differentiation amongst them. This paper aims to analyse socio‐economic differentiation amongst tree‐crop farmers in Vhembe District, Limpopo, using a class‐based analysis based on livelihood diversification and accumulation. Cluster analysis of survey data and semi‐structured interviews reveals that most tree‐crop farmers engage in petty commodity production, internally differentiated by their combination of income sources and livelihood strategies. Farmers' ability to engage in accumulation and upward class mobility is generally severely constrained by limited access to capital. Agricultural diversification offers livelihood potential but limited possibility for accumulation, whereas salaried nonfarm work offers more promising prospects for accumulation but limited livelihood opportunities. A minority demonstrated characteristics of small‐scale capitalist farmers, internally differentiated by their reliance on salaried employment or agricultural production. The findings challenge the notion of an undifferentiated class of market‐oriented smallholders.