The social cost of labor in rural development: job creation benefits re-examined

Job creation effects are examined as they would apply to social analysis of rural development programming by public or private sector agencies. A synthesis and critique are provided of approaches to valuing the social opportunity cost of labor. These approaches vary according to whether or not unemployment is present in the pre‐project state and according to whether or not there is interregional migration in response to project hiring. Graphical, partial equilibrium analysis illustrates why, in general, job creation and project employment give rise to social costs, not benefits. The magnitude of these social costs is shown to depend upon the presence of payroll taxes, wage subsidies and unemployment, in addition to the market's supply and demand elasticities. These social costs may be reduced or offset in specific instances where projects increase the value of labor's productivity or reduce its costs, such as with job training, worker mobility and skill development projects. Careful attention to these approaches can help society choose correctly among alternative development proposals and among alternative (labor‐intensive versus capital‐intensive) technologies.     

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.     

The economic benefits of rabbit control in Australian temperate pastures by the introduction of rabbit haemorrhagic disease

The European rabbit is present in most Australian environments and causes economic loss in agricultural systems by reducing production and imposing control costs on producers and governments. Research into rabbit control has recognised the need for reliable benefit‐cost analysis to justify inputs into rabbit management. This paper provides estimates of the costs of rabbits in Australian temperate pasture systems and of the long‐term benefits of reducing rabbits by the introduction of rabbit haemorrhagic disease (RHD). Rabbits impose annual costs on wool producers in the temperate pasture areas of between 7.1 and 38.7 million Australian dollars (mA$) depending on their density. Controlling rabbits by RHD has the potential to generate substantial long‐term economic benefits by reducing grazing competition with sheep. Reducing rabbit costs by 25% generated 15‐year net present values (NPVs) between 18.4 and 97.3 mA$ at various pre‐RHD rabbit densities. A 50% reduction in rabbit costs increased the total NPVs between 36.9 and 202.4 mA$, virtually all of which was captured by temperate area wool producers. The corresponding benefit‐cost ratios were between 2.9:1 and 16.2:1 for a 25% rabbit reduction and 5.9:1 and32.4:l for a 50% reduction, where the total costs of the RHD program in the temperate pasture areas were incurred by the wool industry. The analysis provides guidelines for the economic evaluation of other pest problems in agricultural production systems.     

Exploring the cost effectiveness of land conservation auctions and payment policies*

This article evaluates the cost‐effectiveness of the Catchment Care Australian conservation auction. It provides evidence of auction cost effectiveness, and estimates cost savings from two discrete components: (i) the opportunity cost revelation incentive provided by the auction mechanism, and (ii) the improved environmental targeting capacity that results from development of a scientifically based environmental benefits assessment capacity. Results show that there are potentially very large returns associated with the latter component that have been overlooked in the literature. Additionally, transaction costs involved with administering the case study conservation auction and the prior non‐auction payment policy are compared. We find that the administration costs for the auction were greater than or equal to those associated with the prior policy. Estimates of relative cost effectiveness across policies are shown to be sensitive to the methods of comparison. In this case study, there is inelastic supply of the last units of environmental benefit. This inelasticity results in large estimated auction comparative cost advantage when the benefit metric is the estimated cost required to achieve auction aggregate environmental benefit. Estimated benefit of the auction is much less when measured as environmental benefits attainable with alternative payment policies subject to the auction budget constraint.     

Payments for environmental services to promote “climate‐smart agriculture”? Potential and challenges

Payments for environmental services (PES) have gained wide popularity as approaches to promote environmentally friendly land use or agricultural production practices. Yet academics have also voiced concerns against seeing PES as a panacea. This article discusses whether PES is an appropriate and promising approach to promote so‐called “climate‐smart agriculture” (CSA) practices, which we define as agricultural production practices that contribute to CO₂ emission reductions and/or removals and provide benefits to farmers via increased productivity and profits and reduced vulnerability to climate change. PES appears most promising for the promotion of CSA practices in small‐scale farming contexts with low incomes. Effective design, however, requires solid estimates of cost and benefit flows from CSA adoption over time, accounting for differences in socioeconomic and ecological conditions, and addressing the risk of leakage. Funding for such PES will likely have to come from public sources, and seems most promising where synergies with other objectives such as agricultural development, food security, and climate adaptation or other environmental services exist. The potential of alternative approaches for CSA support such as taxation with rebates for CSA practices, CSA‐related investment support such as microcredits, and hybrid approaches such as conditional microcredit should be further investigated.     

The economic costs and benefits of a participatory project to conserve maize landraces on farms in Oaxaca,Mexico⋆

Conventional methods were used to assess the benefits and costs of an unconventional project whose purpose was to test whether participatory crop improvement can encourage Mexican farmers to continue growing maize landraces by enhancing their current use value. Findings suggest that farmers as a group earned a high benefit‐cost ratio from participating, though from the perspective of the private investor the returns were low. The project also generated social benefits, but these would be difficult (and costly) to measure. There was a gender bias in both participation and benefits distributions, though there is some evidence of a welfare transfer to maize deficit households. Application of other valuation approaches will be necessary in order to assess both the private and social benefits of similar projects.     

The importance of managing the costs and benefits of bird activity for agricultural sustainability

The behaviour of wild animal species in agricultural landscapes may confer benefits to growers through the provision of ecosystem services (e.g. control of agricultural pests) or inflict costs through direct or indirect damage to crops or livestock. The literature on the costs that species inflict or the benefits they provide has evolved largely independently with few attempts to synthesize information across studies. However, managing cost–benefit trade-offs to maximize agricultural productivity while ensuring native species conservation is vital to the future of ecologically sustainable agriculture. Using birds as a case study, we review the two bodies of literature on the costs and benefits attributed to bird activity in agricultural landscapes. In each case, we examine the major types of costs (e.g. consumption of crops) and benefits (e.g. pollination of crops) and assess approaches to quantifying these in terms of changes in crop yield or monetary value. We then synthesize this information to examine options for balancing cost–benefit trade-offs through coordinated and integrated management strategies that consider all aspects of species activity in agricultural landscapes. Employing strategies that successfully balance costs and benefits is fundamental to future food security and agricultural sustainability.     

Comparing a best management practice scorecard with an auction metric to select proposals in a water quality tender

The focus of this paper is to compare different evaluation frameworks for selecting landholder proposals to improve water quality. The case study is a water quality tender performed in the Burdekin region in Northern Australia in 2007/2008 where bids could be assessed using an inputs-based best management practice scorecard or an outputs-based auction metric. The scorecard approach and other variants of multi-criteria analysis are commonly applied in grant schemes, where landholder proposals are rated by a range of inputs-based criteria. Output-based approaches are typically applied in water quality and conservation tenders, where an environmental benefits index is constructed to summarise the environmental improvements generated by each proposal. These then allow projects to be selected on the basis of cost effectiveness. The case study evaluation reported in this paper demonstrates that the input focus of multi-criteria analysis type assessments are flawed, and that the efficiency of public funding can be more than doubled using auction metrics to assess proposals for landholders to improve water quality.     

Measuring Farm and Market Level Economic Impacts of Improved Maize Production Technologies in Ethiopia: Evidence from Panel Data

While it is often recognised that agricultural technology adoption decisions are intertwined and best characterised by multivariate models, typical approaches to examining adoption and impacts of agricultural technology have focused on single technology adoption choice and ignored interdependence among technologies. We examine farm‐ and market‐level impacts of multiple technology adoption choices using comprehensive household survey data collected in 2010/11 and 2012/13 in Ethiopia. Economic surplus analysis combined with panel data switching endogenous regression models are used to compute the supply shift parameter (K‐shift parameter), while at the same time controlling for the endogeneity inherent in agricultural technology adoption among farmers. We find that our improved technology set choices have significant impacts on farm‐level maize yield and maize production costs, where the greatest effect appears to be generated when various technologies are combined. The change in maize yield and production costs results in an average 26.4% cost reduction per kilogram of maize output (the K‐shift parameter). This increases the producer and consumer surpluses by US$ 140 and US$ 105 million per annum, respectively. These changes in economic surplus help to reduce the number of poor people by an estimated 788 thousand per year. We conclude that deliberate extension efforts and other policies that encourage integration of technologies are important for maize technologies to yield their full potential at both farm and market levels.     

Investigating Preferences for the Local Delivery of Agri‐environment Benefits

Since 2005, Environmental Stewardship (ES) has been the principal agri‐environment scheme for England and is the key instrument for the delivery of increased environmental benefits from agricultural landscapes. The main objective of this study is to investigate the hypothesis that individuals have greater relative preferences for the environmental benefits associated with agri‐environment schemes when they are delivered within those landscapes closest to where they live. A choice experiment approach based on a national survey provides the data and a mixed logit approach is used to model relative preferences for the environmental benefits of ES across five generic landscape types. Results show that most respondents have a preference for benefits delivered in those areas closest and most accessible to where they live.     

Determinants and impact of sustainable land management (SLM) investments: A systems evaluation in the Blue Nile Basin,Ethiopia

Ongoing debate over water management along the Blue Nile and land degradation in Ethiopia emphasizes the need for efficiency gains in agricultural production through sustainable land management (SLM). However, previous SLM studies overlook the tradeoffs involved in maintaining SLM investments over time. We address this limitation by combining a household survey that evaluates the economic impacts of SLM investments and maintenance, with a hydrological model that explores location‐specific infrastructure effects. We then use a multi‐market model to evaluate the impacts of alternative SLM investments on agricultural production, prices, and incomes over time. Analysis suggests SLM investments must be maintained for at least seven years to show significant increases in value of production, and that terraces on moderate and steep slopes are most effective in increasing agricultural yields. However, the benefits of terracing do not outweigh the cost of foregone off‐farm labor opportunities, nor compensate for lower agricultural prices from increased supply. Thus, SLM investments must be paired with other input and infrastructure investments, as well as subsidies for initial labor costs, in order to incentivize adoption and long‐term SLM maintenance.     

Cost‐effective strategies to mitigate multiple pollutants in an agricultural catchment in North Central Victoria,Australia

Strategies to reduce phosphorus and sediment yields are identified for two Australian catchments using a nonlinear optimisation model. This provides novel insight into the cost‐effective management of dual pollutants of water courses in Australia. A strong degree of complementarity between the two pollutants is highlighted, given the adsorption of phosphorus to sediment that augments the value of gully and streambank management for mitigation. However, the relationship between the two pollutants is asymmetric. A 30 per cent reduction in phosphorus yield achieves a 75 per cent reduction in sediment yield in one catchment, while a 30 per cent reduction in sediment yield achieves only a 12 per cent reduction in phosphorus yield. Sediment abatement costs are low given the efficiency of gully and streambank management. A 30 per cent phosphorus reduction lowers profit by 3–7 per cent, while a 30 per cent sediment reduction lowers profit by around 1 per cent. Land‐use optimisation requires spatial heterogeneity in land‐use and gully/streambank management responses. Overall, this research demonstrates the need to determine whether one pollutant is more important than another, while recognising the potential that mitigation practices possess for the reduction of multiple emissions during their evaluation.     

Evaluating alternative “countermeasures” against food contamination resulting from nuclear accidents

Nuclear accidents such as Chernobyl have far reaching impacts on ecological systems. Likewise they have major implications for agricultural systems, since crops and livestock can become contaminated and rendered unfit for human consumption. A range of “countermeasures” exists, however, which can mitigate these impacts and allow food products to be saved. The CESER project has been concerned with the development of a system to assess the environmental side‐effects of such countermeasures. Estimates of the economic costs of these environmental side‐effects have been made for a number of case study sites in the UK, using environmental models and an original contingent valuation study. Estimates of farm level (private) costs are also included.     

基于污染物通量超标排放的生态补偿方法

针对污染物通量核算生态补偿量方法中单位污染物削减成本忽略了污染物来源差异性以及污染物通量核算未考虑年内实际水文、水质特征的问题,从污染物削减成本和污染物通量两个方面对该方法进行改进。污染物削减成本按照污染物来源分为点源污水(主要为工业废水、城市生活污水)和农村非点源污水(主要为农村生活污水、农业生产污水)削减成本两部分,根据不同废水来源的处理成本,按污染物排放量比重加权平均得到削减成本;同时,对年内划分水期,分别核算污染物通量。选取沱江支流上的濑溪河渝川缓冲区进行实例验证。结果表明:核算结果基本能够反映区域污染特征,核算金额也更加真实可信。     

The Governance of Rural Land in a Liberalised World

Liberalisation of agricultural policies reduces the influence of policy on land‐use decisions, but environmental policy objectives remain. Governance provides an approach that recognises the role of institutions and collective action. The formulation of environmental policy objectives in terms of the provision of public goods raises questions as to the role of economic valuation and as to whether the definition of ‘goods’ may misdirect policy attention. An alternative approach relates to ecosystem services and sees management issues in terms of ecosystem resilience and the adaptive governance of socio‐ecological systems. Governance involves a mix of regulation, markets, government incentives and collective action. Regulation sets the domain within which markets operate and social judgements as to property rights are required as a basis for exchanges. Depending on commodity prices, agri‐environment schemes may be required either to reduce agricultural production intensity or to keep land under production. The diffuse nature of the environmental benefits and costs of land uses, the complexity of ecosystems and the need to co‐ordinate land management decisions indicate a role for local adaptive co‐management of land resources. Governments play a major role in supporting the institutional framework within which this can take place.     

Measuring the cost of liquidity in agricultural futures markets: Conventional and Bayesian approaches

Estimating the cost of liquidity in agricultural futures markets is challenging because bid‐ask spreads are usually not observed. Based on an ability to reflect simulated data from Roll's spread model, we assess the effectiveness of conventional and Bayesian bid‐ask spread estimators under different market conditions. Conventional serial covariance and absolute price change spread estimators appear to be biased. Hasbrouck's Bayesian estimator generates small costs of liquidity whose values depend on the correlation and noise in the data. The absolute value Bayesian estimator is precise and works well under conditions of high levels of noise and correlation usually found in agricultural futures markets. Using data from live cattle (LC) and lean hog (LH) contracts, we find similar patterns of performance that produce economically meaningful cost of liquidity differences.     

Marginal abatement costs of greenhouse gas emissions: broadacre farming in the Great Southern Region of Western Australia

Broadacre agriculture is a major emitter of greenhouse gases (GHG). To improve efficiency of climate change policies, we need to know the marginal abatement costs of agricultural GHG. This article combines calculations of on‐farm GHG emissions with an input‐based distance function approach to estimate the marginal abatement costs for a broadacre farming system in the Great Southern Region of Western Australia. The results show that, in the study region, the average marginal abatement cost for the 1998–2005 periods was $29.3 per tonne CO₂‐e. Farms with higher crop output shares were found to have higher marginal abatement costs. Overall, our results indicate that broadacre agriculture is among the lowest cost sources of GHG mitigation.     

International and Institutional R&D Spillovers: Attribution of Benefits among Sources for Brazil's New Crop Varieties

Reported rates of return to agricultural R&D are generally high, but they are likely to be biased, particularly because of attribution problems—mismatching research benefits with costs. The importance of attribution biases is illustrated here with new evidence for Brazil. During 1981–2003, varietal improvements in upland rice, edible beans, and soybeans yielded benefits of $14.8 billion in present value (1999 prices) terms. Attributing all of the benefits to Embrapa, a public research corporation accounting for more than half of Brazil's agricultural R&D spending, the benefit-cost ratio would be 78:1. Under alternative attribution rules, the ratio drops to 16:1.     

Economics of Soil Conservation: The Upper Mahaweli Watershed of Sir Lanka

This paper estimates the benefits and costs of soil conservation in the Upper Mahaweli Watershed of Sir Lanka. The costs of soil erosion control include the implementation costs of control measures, while the benefits are reductions in the costs of soil erosion. In contrast to many studies in developed countries, the on‐site benefit of soil erosion control in Sri Lanka is estimated to be greater than the off‐site benefit While a social benefit‐cost analysis demonstrates that it is socially desirable to implement conservation measures, the private financial analyses indicate that it is feasible for individual farmers to adopt the conservation measures. Despite private economic feasibility, programs addressing farmers' reluctance to adopt soil conservation measures may be preferable to public intervention in soil conservation activities when the on‐site benefits are greater than the off‐site benefits.     

河北省现代农业园区多要素评价及优化研究

[目的]现代农业园区在我国农业和农村经济中发挥着重要作用,通过对现代农业园区多要素进行评价,进而优化选择开发项目,以期有效地拓展农业功能,提高农业附加值,实现现代农业生态效益、社会效益及经济效益的共同发展。[方法]通过实地调查法采集相关资料和数据,文献查阅法了解现代农业园区的研究成果及研究现状,结合层次分析法对现代农业园区进行评价及优化选择。[结果]河北省现代农业园区中多要素权重排序为园区基础设施(0.27)社会效益(0.22)生态效益(0.21)科技能力(0.17)经济效益(0.13)。得分结果显示,带动农民致富户数、人才引进与培养、农产品产出率、技术推广能力、园区绿化率、农作物种植面积、园区就业人数、农业技术成果转化能力、处理废弃物的能力及供电能力对现代农业园区的发展贡献较大。[结论]河北省现代农业园区在今后的发展中要加强农业机械化水平的建设,增加示范园区的建设比例,尽量减少高投资、耗时久的项目,以确保园区稳定的经济效益,促进园区健康持续地发展。