Why do global long‐term scenarios for agriculture differ? An overview of the AgMIP Global Economic Model Intercomparison

Recent studies assessing plausible futures for agricultural markets and global food security have had contradictory outcomes. To advance our understanding of the sources of the differences, 10 global economic models that produce long‐term scenarios were asked to compare a reference scenario with alternate socioeconomic, climate change, and bioenergy scenarios using a common set of key drivers. Several key conclusions emerge from this exercise: First, for a comparison of scenario results to be meaningful, a careful analysis of the interpretation of the relevant model variables is essential. For instance, the use of “real world commodity prices” differs widely across models, and comparing the prices without accounting for their different meanings can lead to misleading results. Second, results suggest that, once some key assumptions are harmonized, the variability in general trends across models declines but remains important. For example, given the common assumptions of the reference scenario, models show average annual rates of changes of real global producer prices for agricultural products on average ranging between ?0.4% and +0.7% between the 2005 base year and 2050. This compares to an average decline of real agricultural prices of 4% p.a. between the 1960s and the 2000s. Several other common trends are shown, for example, relating to key global growth areas for agricultural production and consumption. Third, differences in basic model parameters such as income and price elasticities, sometimes hidden in the way market behavior is modeled, result in significant differences in the details. Fourth, the analysis shows that agro‐economic modelers aiming to inform the agricultural and development policy debate require better data and analysis on both economic behavior and biophysical drivers. More interdisciplinary modeling efforts are required to cross‐fertilize analyses at different scales.     

Anthropogenic and topographic correlates of natural vegetation cover within agricultural landscape mosaics in Turkey

Natural vegetation enhances the value of agricultural landscapes for people and wildlife. However, the role of anthropogenic versus topographic factors in driving the extent of natural vegetation cover within agricultural lands at large spatial scales remains unexplored. I assessed the influence of anthropogenic and topographic variables on the extent of agricultural mosaics with high natural vegetation cover in the country of Turkey where a large extent of natural and semi-natural vegetation is maintained by traditional agriculture. GIS layers depicting human land use, elevation, slope, roads and population data were obtained and summarized at two spatial scales, within provinces and for 100 km² grid cells covering the country’s entire agricultural land area. Average farm size was also obtained at province level. Hierarchical Partitioning was conducted to determine the independent effect of anthropogenic and topographic variables on the variation in agriculture with high natural vegetation. Slope had the largest independent effect on the variation in the proportion of agricultural mosaic with high natural vegetation cover. The extent of agricultural and settlement area also explained much of the variation in natural vegetation across both grid cells and provinces. The proportion of natural vegetation increased as human population and road density decreased across grid cells and as average farm size decreased across provinces. These results suggest that while topography is the primary driver of natural vegetation cover within agricultural mosaics in Turkey, the pressures associated with urban development and agricultural industrialization may also influence the cultural and wildlife value of agricultural landscapes.     

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

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

Energy substitutability in transition agriculture: estimates and implications for Hungary

Subsidised energy prices in pre‐transition Hungary had led to excessive energy intensity in the agricultural sector. Transition has resulted in steep input price increases. In this study, Allen and Morishima elasticities of substitution are estimated to study the effects of these price changes on energy use, chemical input use, capital formation and employment. Panel data methods, Generalised Method of Moments (GMM) and instrument exogeneity tests are used to specify and estimate technology and substitution elasticities. Results indicate that indirect price policy may be effective in controlling energy consumption. The sustained increases in energy and chemical input prices have worked together to restrict energy and chemical input use, and the substitutability between energy, capital and labour has prevented the capital shrinkage and agricultural unemployment situations from being worse. The Hungarian push towards lower energy intensity may be best pursued through sustained energy price increases rather than capital subsidies.     

Spatial-temporal characteristics and influencing factors of agricultural eco-efficiency in China in recent 40 years

Chinese agricultural output has been multiple under the intensive input of production factors since the reform and opening-up. Such a growth pattern that realizes high output through high input results in increasingly prominent environmental pollution problems. Considering the provincial panel data in China during 1978–2017 as the research units and taking agriculture in broad sense as the study object, the agricultural eco-efficiency (AEE) was measured by the Super-SBM Model, and the influencing factors were screened out from agricultural basic condition, agricultural industrial structure, agricultural development potential and agricultural input strength. The findings indicated that agricultural expected output and unexpected output were synchronously increased, while the change of input factors was totally different and gradually transferred to materiality from resources. In 1978–2017, AEE was increased to 0.713 from 0.405, with an increase of about 76%. And it approximately underwent four stages, including free development, reform promotion, market regulation and policy incentives. Under the resource restraint and policy incentives, AEE showed that Northeast, East and South China were higher than the national average level. North and Central China basically fitted for the national average level, and Southwest and Northwest China were lower than the national average level. Also, it was successively present in some spatial characteristics including polarization, differentiation, agglomeration and reconstruction on the provincial scale. The magnitude and direction of influencing factors indicated that the introduction of subsidy policies for compound fertilizers, an increase of farmers’ incomes, optimization of agricultural plantation structure, and maintenance of stable agricultural product prices could effectively improve AEE.     

Agricultural Supply Response: A Survey

This paper surveys the literature on agricultural supply response to prices in developing countries. Empirical estimates of elasticities depend both on the methodology adopted and on country-specific factors relating to technology, economic structure and macro constraints. The paper seeks to establish some general conclusions on supply responsiveness within these limitations. Supply response to output prices at the aggregate and at the crop levels is considered first. Crop-specific acreage elasticities range between zero and 0.8 in the short run while long-run elasticities tend to be higher — between 0.3 and 1.2. Yield elasticities are smaller and less stable than acreage elasticities. Clearly, inter-crop pricing can be relied upon to effect shifts in the commodity composition of agricultural output. Evidence also suggests that supply elasticities vary systematically with such factors as price and yield risks, multiple-cropping, the importance of the crop, farm incomes, farm size, tenancy and literacy. The most controversial and important aspect of supply response is the effect on aggregate agricultural output of agriculture's terms of trade. Conventional time-series estimates range from 0.1 to 0.3. A major cross-country study reports an aggregate elasticity as high as 1.66. It is argued that cross-country estimates are apt to exaggerate aggregate responsiveness while time-series studies underestimate it somewhat. For LDCs, a tentative range of 0.4 to 0.5 seems plausible. Hence, the distributive effects of the terms of trade are likely to be more significant than the allocative effects. Asian evidence shows that only a third of the inter-country differences in fertilizer use can be attributed to fertilizer price policies. Provided new technologies and infrastructure are in place, fertilizer subsidies can help in technology diffusion and in overcoming credit constraints. The choice between price supports and input subsidies will depend on a variety of country- or situation-specific factors. Nevertheless, a significant general factor favoring price supports is that they can more easily be coupled with price stabilization goals than input subsidies. Though sparse, the available evidence on the response of marketed surplus suggests that price policy is not a reliable instrument for regulating inter-sectoral trade.     

Extent and possible causes of intrayear agricultural commodity price volatility

Wheat, corn, rice, soybeans, and cotton experienced higher volatility in the second half of the 2000s. For the sample at hand, the unit root tests only validate a new period of high volatility for wheat and cotton. If in the next couple of years however, corn, rice and soybeans maintain their higher volatility, a new period of high volatility may also be validated statistically. Regarding the factors driving the intrayear volatility GMM estimates show that “commodity market fundamentals” i.e., the stock‐to‐use ratio and to a lesser extent the degree of internationalization, are the most systematically statistically significant coefficients among commodities. Over time, consecutive low stock‐to‐use ratios and a thin international market provoke typically high volatility. Speculative activity and liquidity in the agricultural derivative market have a stabilizing effect on the spot price, if any. Finally, “common macro” factors significantly impact volatility, especially the volatility of petrol and of exchange rates; their dispersion importance over the sample is quite sizeable. However, it is difficult to establish a link between, on the one hand, loose monetary policy, business cycle and inflation, and, on the other hand, commodity price volatility, as the sign of the estimated coefficient changes depending on the commodity and the estimated elasticities are quite low.     

Impacts of Norwegian Milk Quotas on Output Growth: A Modified Distance Function Approach

Quota regulations that prevent output expansion of farms and reallocation of output between farms can cause lower growth in output and productivity. The aim of this study was to explain the output growth rate of Norwegian dairy farms since 1976, and to decompose it into output, input, socioeconomic and technical change components. Instead of using the standard distance function approach for multi‐output technologies, we use a growth rate formulation, which automatically removes the farm‐specific effects. This formulation also helps to impose non‐negativity constraints on marginal products of inputs (input elasticities), which are often violated for many observations, especially when flexible functional forms are used. The farm‐level panel data cover three periods: before the quota scheme was introduced (1976–1982); the period with the most output‐restricting quota scheme (1983–1996); and the period with a more flexible quota scheme (from 1997 onwards). Results show that the milk quota regulations had a significant constraining effect on output growth, in particular on milk output in the period 1983–1996. Furthermore, the output mix has shifted towards meat production for the average farm. What emerges from this study is that output growth and technical change are negatively influenced by policy aims where productive performance has not been the primary objective, and that there is scope for increased farm growth if the quota regime is liberalised.     

The role of input vouchers in modernizing the fresh fruit and vegetable market in Turkey

Contractual arrangements between farmers and traders aiming at providing input/credit in return for output selling have been widely studied in the literature on agricultural economics. Nonetheless, there is one issue, which is barely mentioned in the literature: how to enforce the contract terms when traders offer credit in cash rather than input advances? This article aims to describe an innovation in farming contracts, used by fresh fruit and vegetable wholesalers in Turkey, which involves a kind of private voucher system. Drawing on original data collected from wholesalers—a segment in the supply chain hardly covered in the literature—we investigate the factors determining contract adoption using a two‐limit Tobit model. Our results suggest that this private voucher system contributes to supply chain coordination and facilitates smallholder farmer participation in export and supermarket channels, which are growing rapidly in this developing country.     

Seasonal and Spatial Variations in Demand for and Elasticities of Fish Products in the United States: An Analysis Based on Market‐Level Scanner Data

Seasonally and spatially varying demand elasticities would provide important information to seafood producers and marketers as well as policy makers. We analyzed the effects of season and space on (i) demand (translation effects) and (ii) price as well as expenditure elasticities of demand (scaling effects) for 13 finfish species in the United States. The paper used market‐level scanner data for 52 U.S. markets. Results suggest that not only the quantity demanded, but also the demand elasticities vary across species, seasons, and geography; not only does the degree of competition among finfish products vary considerably over space, but substituting products themselves change. These results highlight the importance of studying consumer demand behavior at species level, across seasons and geography, particularly as it sheds important light on some important policy issues such as the potential substitution between catfish and tilapia in the U.S. markets.     

International Supply Response

Long-run aggregate agricultural supply elasticities obtained from conventional supply functions fitted to time series data tend to be relatively inelastic in the range of 0.1 to 0.4. I argue that these estimates substantially understate the true long-run supply response in agriculture. Because of the lack of international input price data, implicit output/input price ratios are estimated from a production function assuming profit maximization. The estimation of an aggregate supply function utilizing these price ratios yields long run aggregate supply elasticities in the range of 0.90 to 1.19. These figures are substantially larger than those obtained from conventional supply functions fitted to time series data, but correspond closely to estimates reported in an earlier crosscountry study that used different price data for different points in time. The results imply that policies which distort domestic and/or world market prices of agricultural products cause greater output distortions in both the DCs and LDCs than are predicted by the small supply elasticities obtained from conventional supply estimation.     

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

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

Land use dynamics in the central highlands of Vietnam: a spatial model combining village survey data with satellite imagery interpretation

The paper investigates geo‐physical, agro‐ecological, and socio‐economic determinants of past land use change in two districts of Dak Lak province in the Central Highlands of Vietnam and assesses the influence of rural development policies on land cover change. Landsat satellite images from the years 1975, 1992 and 2000 are interpreted to detect land cover in two time periods. A survey in randomly selected villages provides primary recall data on socio‐economic and policy variables hypothesised to influence land use change. Secondary data on rainfall, soil suitability, and topography was obtained from meteorological stations and from a digital soil map and digital elevation model. All data were spatially referenced using geographic information systems (GIS) software. A reduced‐form, multinomial logit model is used to estimate the influence of hypothesised determinants on land use and the probabilities that a certain pixel has one of five land classes during either of the two periods. Results suggest that the first period from 1975 to 1992 was characterised by land‐intensive agricultural expansion and the conversion of forest into grass and agricultural land. During the second period, since 1992, the rapid, more labour‐ and capital‐intensive growth in the agricultural sector was enabled by the introduction of fertiliser, improved access to rural roads and markets, and expansion of the irrigated area. These policies, combined with the introduction of protected forest areas and policies discouraging shifting cultivation during the second period reduced the pressure on forests while at the same time increasing agricultural productivity and incomes for a growing population. Forest cover during the second period mainly increased due to the regeneration of areas formerly used for shifting cultivation.     

Measuring agricultural total factor productivity in China: pattern and drivers over the period of 1978‐2016

The Chinese agricultural sector has experienced a substantial increase in total output since dramatic reforms were introduced in 1978. This paper uses the index method to measure agricultural total factor productivity (TFP) for China’s crop and livestock industries, based on the gross output model from 1978 to 2016. We construct production accounts for the industries using input‐output relationships for the 26 main agricultural commodities and commodity groups, which account for over 90 per cent of the total agricultural inputs and outputs. The results show that China’s agricultural TFP grew at a rate of approximately 2.4 per cent a year before 2009, which is comparable to the main OECD countries and is double the world average. TFP growth accounts for approximately 40 per cent of output growth, suggesting that input growth was the main driver of output growth in the past. However, average productivity growth slowed down after 2009 though it has gradually recovered since 2012. The slowdown reflects the emerging challenges to existing farm production practices in Chinese agriculture, suggesting the need for further institutional reform.     

The potential impact of climate change on Taiwan's agriculture

This paper intends to estimate the potential impact of climate change on Taiwan's agricultural sector. Yield response regression models are used to investigate the climate change's impact on 60 crops. A price‐endogenous mathematical programming model is then used to simulate the welfare impacts of yield changes under various climate change scenarios. Results suggest that both warming and climate variations have a significant but non‐monotonic impact on crop yields. Society as a whole would not suffer from warming, but a precipitation increase may be devastating to farmers.     

Market structure and the demand for veterinary services in India

The livestock sector is emerging as one of the fastest growing agricultural sub‐sectors in India and the expectations are that this growth could further accelerate due to growing incomes and the high income elasticity of demand for livestock products. Given the size and relatively equitable distribution of livestock in India, this presents an excellent opportunity for the country to boost rural incomes and accelerate the pace of poverty reduction. But, successful capitalisation of such opportunities requires a policy regime that facilitates growth in productivity at the farm level as well as in the processing sector. The productive potential of animals depends crucially on the quality of nutrition, genetic material and the animal health system, and on all these counts, India has a poor record. The public sector continues to be the primary provider of veterinary services, and the deteriorating fiscal situation of most state governments is making it extremely difficult to either expand the reach of these services or improve the quality of service delivery. Although, on efficiency grounds, there is good rationale for commercialised delivery of these services, serious concerns prevail in India about the equity implications of private sector delivery or full cost recovery within the government system. Evaluation of the desirability of user fees or private delivery of livestock services requires an understanding of the factors influencing the demand for these services. This paper examines the nature of demand for veterinary services in three states of India and presents first estimates of demand elasticities for veterinary services. The results indicate that price is not an important determinant of the decision to use these services. Also, practically no variation is found in price elasticities across income groups. These results suggest that the fears of sharp declines in the use of these services as a result of full cost recovery and/or private sector delivery are unfounded.     

Policy Regimes and Performance of the Agricultural Sector in Latin America and the Caribbean During the Last Three Decades

In a review of the policy regimes and agricultural output performance in Latin America and the Caribbean (LAC) during the past three decades, the linear sequence of pre-reform, crisis and reform, and post-reform recovery is qualified, focusing on a sample of nine LAC countries. The sector did quite well during the ISI policy regime, criticized for its price discrimination, and does not show the assumed characteristics of the 'lost decade' during most of the 1980s, as even agricultural exports (in constant terms) remained important, only to suffer from drops in international prices. Residually treated in the macro-oriented reforms, it has never regained the growth rates under the SAP policy regime, while it was expected that it would benefit more than others. These unorthodox conclusions are founded on a detailed investigation into agricultural output and export performance, correlating it with a reform index (on a country basis).     

A Quantile Regression Analysis of the Effect of Farmers’ Attitudes and Perceptions on Market Participation

The objective of this study is to investigate the subjective determinants of farmers’ participation in output markets in five EU New Member States (NMS) characterised by large semi‐subsistence sectors. It employs quantile regression to model market participation reflecting the heterogeneity amongst farmers. The study also uses the Bayesian adaptive lasso to simultaneously select important covariates and estimate the corresponding quantile regression models. The empirical results show that only two variables affect all quantiles, while their effect varies across quantiles. Some of the remaining variables affect the share of output sold at the lower quantiles (i.e. for subsistence‐ and semi‐subsistence‐oriented farmers) only, whereas other variables are only significant at the upper quantiles (i.e. for more commercially oriented farms). Advisory services, and particularly agricultural business advice, and information and advice on markets and prices can facilitate the market participation of subsistence‐oriented farms.     

陕西省粮食产量预测及其影响因素的灰色关联分析

根据1988—2007年粮食生产相关指标的统计数据，借助灰色关联理论对影响陕西省粮食生产的粮食单位面积产量，农业劳动力，机械总动力，化肥施用量，受灾面积，粮食播种面积，农田有效灌溉面积，农村用电量等8项指标进行了灰色关联度的定量分析，总结出不同时间段主要影响因素，并根据关联度的大小排序，，结合该省实际情况，提出了针对性，可行性的建议；将灰色关联分析结果中关联度比较高的指标作为神将网络的输入层单元，借助基于动量法的BP神经网络的MOBP模型预测出未来2015年和2020年的粮食产量，经检验该模型的平均相对误差达到2．5％，为陕西省可持续发展战略的制定和规划提供可靠的数据和参考价值。     

The impact of the 1999 CAP reforms on the efficiency of the COP sector in Spain

The cereal, oilseeds, and protein crop sector (COP) occupies a prominent position within the European Union's agricultural sector. Within Spain, the COP sector accounts for almost a third of total Agricultural Guidance and Guarantee Fund expenses, and half of the utilized agricultural area (UAA). The COP sector is not only relevant because of its physical and economic magnitude, but also because of the political attention it receives. The Common Agricultural Policy (CAP) reforms that occurred during the 1990s paid special attention to this sector. This article aims to determine the impacts of Agenda 2000 on a sample of Spanish COP farmers' production decisions by using an output-oriented stochastic distance function. The distance function allows for an assessment of the reform-motivated changes on total output, input used, input composition, and crop mix. It also permits an assessment of the impacts of the reform on farms' technical efficiency.
Results show that the reform has shifted the production frontier inward and changed output composition in favor of voluntary set-aside land. With respect to input composition, Agenda 2000 induced a decrease in land, fertilizers, pesticides, and other inputs in favor of labor. In addition, Agenda 2000 has had a negative impact on technical efficiency.