Environmental Policy Uncertainty and Marketable Permit Systems: The Dutch Phosphate Quota Program

Tradable permits are generally considered as an efficient instrument to regulate pollution by individual producers. However, uncertainty about changes in or possible discontinuation of the program could make individual farmers reluctant to invest in tradable permits. This article uses the option approach to derive a theoretical model that shows the impact of policy uncertainty on investment in tradable quota. The empirical assessment provides weak evidence for the existence of option values due to policy uncertainty for phosphate quota in swine production in the Netherlands.     

Why should landowners in protected areas be compensated? A theoretical framework based on value capture

Many protected areas around the world are struggling to achieve financial stability and meet management costs, which is a difficult challenge. This difficulty is particularly acute in China, even though protected area conservation has been increasingly stressed upon in recent central policy announcements. The practice of providing supplemental funding for protected areas has been going on for years, but there is a lack of theoretical research on why and how landowners in protected areas could be compensated. This paper aims to fill the gap and make two contributions to the literature by explaining why landowners in protected areas should be compensated and who should pay for protected areas. The theoretical arguments on compensation for protected areas are first reviewed before we derive the theoretical framework of value capture for protected areas in China based on the principle of symmetry between burden and compensation. We conclude that local residents should be compensated according to the principle of equal public burden because the spatial regulation of protected areas has seriously restricted their land development rights. Furthermore, the beneficiaries of added land value in the process of the spatial regulation of protected areas can be categorized into three groups: the general public, residents around protected areas and some residents in protected areas (along the infrastructure site or in the upzoning area). Therefore, we structure a three-level value capture framework for protected areas. This is the first attempt to study compensation for protected areas based on value capture theory, which can provide guidance on protected area management for government leaders and researchers across the world.     

基于农户生产决策视角的耕地保护经济补偿标准测算

研究目的:基于农户生产决策理论,剖析耕地保护经济补偿标准形成机理,并以非粮化经济补偿标准为例进行实证测算,为国家实现耕地保护与粮食安全目标提供决策参考。研究方法:边际分析法,计量模型分析法与定性分析法。研究结果:多宜性耕地用途之间的边际利润差异是诱使耕地非粮化与非农化的经济动因,需要对限制完整耕地使用权所导致的农户利益损失进行合理的经济补偿。研究结论:耕地投入粮食生产的边际利润明显低于其他农地利用方式的利润,为了提高农户耕地保护与粮食生产动力,需要设置耕地保护经济补偿资金,并改革现有粮食直补方式与农地分散经营格局。     

The End of the Federal Tobacco Program: Economic Impacts of the Deregulation of U.S. Tobacco Production

In 2004, Congress ended the sixty-six-year-old federal tobacco program, effectively deregulating production and prices. With deregulation came a buyout package, with cigarette manufacturers agreeing to pay more than $3 billion in present value to quota owners and farmers. While the dollar values of compensation payments are known, the effects of the historic legislation on tobacco markets are uncertain. We examine these effects and their welfare consequences. We also consider the appropriateness of the buyout payments under alternative views of economic damages due to the quota system's demise.     

Profitability Development and Resource Reallocation: The Case of Sugar Beet Farming in Germany

Following the 2006 reform of the European Union sugar market, and in anticipation of the quota abolition, a reallocation of sugar production has occurred. Using a Lowe quantity index, we evaluate the productivity and profitability of sugar beet farming in Germany from 2004 to 2013. The results show that an increase in total factor productivity partly compensated for losses in terms of trade. Moreover, the contribution of production reallocation to sector productivity growth varied across regions with distinct ownership structures of sugar processing companies. These findings have implications for policy and industry, as it transitions to a liberalised market.     

Price Ceilings on Milk Production Quota Values: Future or Folly?

Since the inception of supply management in Canada during the 1970s, milk production quota has been used to regulate output and participation in the dairy industry. In recent years, milk quota values have increased dramatically, almost tripling in value since the mid 1980s. This led to the Dairy Farmers of Ontario intervening on the milk production quota exchange on two occasions: first, in November 2006 with a progressive transfer assessment and then in July 2009, replacing the former policy with a firm price ceiling—fixing the unit price of quota at $25,000. These policies represent a significant redistribution of economic benefits from milk producers selling their quota to those remaining in the industry. The objective of this study is to first explore the reasons for the increase in production quota values; and second, to assess the welfare and distributional effects of each of the two quota policy schemes. Our results suggest that the increase in quota values were driven by basic economic factors and that the efficiency losses from intervention in the quota exchange are nontrivial. We conclude by suggesting there are several alternative policy options that could minimize efficiency losses while moderating the escalation in quota values. Depuis la mise en place du système de gestion de l’offre au Canada dans les années 1970, les quotas laitiers sont utilisés pour régulariser la production et la participation dans l’industrie laitière. Au cours des dernières années, la valeur des quotas laitiers a fait un bond considérable et a pratiquement triplé depuis le milieu des années 1980. Cette situation a amené la Dairy Farmers of Ontario à intervenir à deux reprises dans le système d’échange de quotas laitiers : en novembre 2006, en imposant l’établissement d’un transfert progressif et en juillet 2009, en remplaçant la politique précédente par l’établissement d’un prix plafond ferme fixéà 25 000 $. Ces politiques permettent une importante redistribution des avantages économiques lorsque des producteurs de lait vendent leurs quotas à des producteurs qui demeurent dans le secteur. La présente étude visait d’abord à examiner les raisons qui sous‐tendent l’augmentation de la valeur des quotas de production et ensuite àévaluer le bien‐être et les effets distributifs de chaque plan de quotas. Les résultats de notre étude autorisent à penser que l’augmentation de la valeur des quotas a été motivée par des facteurs économiques fondamentaux et que les pertes d’efficacité découlant de l’intervention dans les échanges de quotas n’étaient pas sans importance. En conclusion, nous estimons qu’il existe plusieurs politiques de rechange qui pourraient minimiser les pertes d’efficacité tout en modérant l’escalade de la valeur des quotas.     

The Impact of Market Intervention on Quota Mobility: The Case of the Ontario Dairy Industry

We examine the relationship between farm‐level scale efficiency and quota purchases in the Ontario dairy quota market before and after the implementation of a progressive transfer assessment policy and a price cap policy. We find that scale efficiency has a positive effect on net quota purchases and that the two regulations slowed down this effect. The largest deterrent in the movement of quota from less efficient to more efficient producers occurred after the implementation of the capital asset pricing policy. If the capital asset pricing policy remains in effect, it will likely take a longer time to achieve an efficient allocation of quota across producers in the industry. Nous examinons la relation entre l'efficience d'échelle agricole et les achats de quota au sein du marché des quotas laitiers ontariens, avant et après l'implantation d'une politique d'évaluation progressive de transfert, et d'une autre de plafonnement des prix. Nous avançons que l'efficience d'échelle a un effet positif sur les achats nets de quota et que les deux politiques ont freiné cet effet. La plus grande dissuasion au sein du mouvement des quotas de producteurs moins efficients vers ceux qui le sont plus, survient après le plafonnement des prix. Si la politique de plafonnement des prix demeure en vigueur, il faudra attendre encore longtemps avant de réussir une allocation efficiente des quotas parmi les producteurs de l'industrie.     

Stop and Go Agricultural Policies with a Land Market

This article studies the design of farm policy in the presence of asymmetric information about farmers' productivity, a government objective to insure farmers a minimum "parity" income, an endogenous land rent, and diminishing returns on alternative (nonprogram crop) land uses. In this setting, acreage set asides are never part of an optimal farm policy, although compensated acreage limits are. When there are new farmer entrants who cannot be excluded from farm programs, optimal policy takes the form of a pure voluntary acreage limitation—or "buyout"—program in which high-cost producers participate and low-cost producers do not.     

Capability approach to compulsory purchase compensation: evidence of the functionings of land identified by affected landowners in Scotland

This research was inspired by the challenges faced by landowners seeking adequate compensation for all their losses following the compulsory acquisition of land by public authorities in Scotland. This research uses Sen’s ‘capability approach’ and argues that the well-being contribution of land extends beyond its market value and therefore compensation payable following compulsory acquisition should include these other losses. The aim of this research is to identify the valuable functionings (or usefulness) of land from the perspective of the existing landowners. The functionings which contribute to their well-being can be both financial and non-financial and should be appropriately compensated. This research identifies and creates a list of valuable ‘functionings’ of individual landowners who have suffered losses due to compulsory acquisition, servitude and severance under various public projects in Scotland. Qualitative Content Analysis is applied to analyse case reports prepared by the Lands Tribunal for Scotland. In-depth analysis of 19 relevant cases is performed with the use of NVIVO software and reveals a list of 15 different functionings of land. Results show that financial functionings are the most frequently discussed at the Lands Tribunal. The debate on the loss of financial benefits from expected and planned development on land in the near future is the most debated topic by the landowners.     

Termination of the WGTA: An Examination of Factor Market Distortions, Input Subsidies anc Compensation

Input subsidies are common in North American agriculture and create production and trade distortions. As the theoretical discussion in this paper shows, the Crow transportation subsidy was no exception. The Crow benefit was eliminated in 1996 with the elimination of the Western Grain Transportation Act. Under the "pay the producer" approach, farmers in western Canada were compensated for the removal of the Crow subsidy, but the compensation was nowhere near that required to make grain and oilseed producers in western Canada at least as well off as before the Crow subsidy was removed. This policy change satisfied the compensation principle but not the Pareto principle. Reasons are given why this was the case, including very divergent views from various farm groups such as the National Farmers Union, the Alberta Cattle Commission, and the Alberta Barley Growers Association.
Les intrants du secteur agricole sont souvent subventionnés en Amérique du Nord, ce qui fausse la production et les échanges. Comme l'illustre la discussion dans cet article, il en a été ainsi pour le tarif du Pas-du-Nid-du-Corbeau, dans les transports. Cette subvention a été abolie en 1996 avec l'abrogation de Loi sur le transport du grain de l'Ouest. Les producteurs de céréales et d'oléagineux de l'Ouest canadien ont été indemnisés, mais la somme qui leur a été versée était largement insuffisante pour qu'ils restent aussi bien lotis qu'avant l'abolition de la subvention. La nouvelle politique a satisfait le principe de la compensation, mais pas celui de Pareto. On explique le pourquoi de cette situation, l'une des raisons étant les points de vue tràs divergents de diverses associations agricoles.     

森林生态税的政策设计

森林作为陆地生态系统的主体 ,对改善生态环境、保护生态平衡起着决定性的作用。但由于森林生态效益的外在性 ,使得其价值补偿无法实现 ,从而成为我国森林生态建设的根本性制约因素。为此 ,本文分析了森林生态税政策设计的前提 ,进行了诸种主要生态经济政策利弊的比较 ,认为森林生态税是一种兼有公正和效率的生态经济政策。以此为基础 ,本文进一步探讨了森林生态税要素的设计 ,税收的归属 ,并对森林生态税制定的政策效应等问题 ,进行了较为系统的探讨。     

MARKETING BOARDS AND QUOTA POLICIES FOR CANADIAN FARM PRODUCTS: AN APPRAISAL OF PERFORMANCE*

Since the great economic Depression, Canadian farm operators have always emphasized the need to strengthen their bargaining position in the market place. Basically, farm operators believe that the individual farmer is in no position to bargain effectively in a product market with a few large firms.
Legislators have responded to the wishes of farm operators by enacting legislation which provides for the formation of compulsory marketing boards controlled by producers. An ever-increasing number of these boards are now in operation. The granting of exclusive powers to sell particular farm products, however, is one which involves the public interest and the public is, therefore, vitally interested.
This paper focuses attention on the exercise of the powers vested in these marketing boards through their use of quotas, and their limitations to entry of new producers into particular sectors of the agricultural industry. The paper indicates that there are some positive features to the quota policies pursued by marketing boards. Some economic security has been afforded farm operators with short-term stability engendered in particular sectors of agriculture. There are certain negative consequences of these quota policies, which affect the location of production and also impair the competitive strength of particular sectors of agriculture to which they are applied. They have also interfered with the most rational utilization of resources in associated industries. These aspects of the quota policies are, therefore, inconsistent with the public interest. The study outlines principles that should form the basis of a revitalized marketing policy that may be more consistent with the public interest.     

Issues relating to Agricultural Pricing Policies and their Analysis in Developing Countries

Agricultural pricing policies in developing countries are often the result of complex interactions between producer, consumer and merchant groups and their relative effectiveness in influencing government decision making. Even within governments, various ministries often have opposing views. In this environment one of the contributions a policy analyst can make is to attempt to quantify the effects of different policy options. This permits a more informed discussion which hopefully leads to better decision-making and an improved incentive environment. Many analyses of agricultural pricing policies have used the standard partial equilibrium analysis where no linkages between commodity markets were considered. In this paper we have considered cross-price effects. Also, we have discussed issues relating to other adjustments/refinements of the standard method so that a practitioner not familiar with the various methods can form an opinion of what the options are and what adjustments may be appropriate for a particular case in question. The adjustments relate to overvaluation of currencies, input price distortions, differences in the degree of distortions between producers and consumers, and variability of border prices. The inclusion of cross-price elasticities was important for assessing production, consumption and trade effects for Argentina, but for the other countries it resulted in only somewhat improved accuracy. The adjustment for exchange rates had a large impact in Egypt and was important for other countries as well. This underlines the importance of exchange rates as key variables for agricultural pricing policies in general. The numbers show that the traditional taxation policies of agricultural products in the sample of developing countries is somewhat less widespread than in the past. These policies, however, continue to favor consumers over producers, with significant losses for some of the latter. The large size of welfare losses, especially compared to efficiency losses, highlights the importance of correcting distorted prices that adversely affect the poorest sections of society. Also, the usual government objective of taxing producers to raise revenues is frequently defeated by the large subsidies provided to consumers. For the partitioner, for whom time is often of the essence, the assessment of welfare effects using the partial equilibrium method may provide reasonably good ‘first cut’ estimates of the order of magnitude of the impact of distortions. But often, these 'base case estimates' can and should be adjusted for a number of possible factors. The analyst needs to determine how important accurate estimates of key variables are to the policy makers; he or she then needs to compare the costs involved in generating or gathering the data and doing the calculations with the benefits of a broader and more accurate analysis of the distortionary effects of the particular case in question.     

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.     

Welfare Impacts of the Canada-U.S. Softwood Lumber Trade Dispute: Beggar Thy Consumer Trade Policy

The welfare impacts of the 1987–91 Canadian "voluntary" 15% lumber export tax and the current 6.51 % U. S. import duty are analyzed using a simultaneous equations model of the softwood lumber market. The results show that U.S. consumers suffer losses 35% to 45% of those endured by Canadian producers. Canadian national welfare was much higher under the voluntary export tax, indicating the Canadian government erred in unilaterally terminating the agreement. In both instances, the U.S. government pursued policies that benefited domestic producers at the expense of U.S. lumber consumers, with no attempt or discussion of compensation. Thus, this appears to be a case of "beggar thy consumer" trade policy.     

The Future of European Union Dairy Policy

Even if the quota regime has been extended until 2007–08 as part of the Agenda 2000 reform adopted in March 1999, the European Union (EU) dairy sector is currently experiencing large uncertainty over future policy. This paper examines EU dairy policy issues and assesses their likely implications. It mainly addresses the central question of dismantling the quota and intervention support mechanisms. Simulation results illustrate how three factors (marginal costs of production, import tariffs on dairy products and compensatory payments granted to dairy producers) may affect the outcomes of a quota elimination scenario.
Même si le régime des quotas a été prolongé jusqu'en 2007–2008 à l'occasion de la réforme Agenda 2000 de mars 1999, le débat sur la nécessité d'une réforme plus importante de la politique laitiére européenne n'est pas clos. Dans ce papier, nous analysons les différentes contraintes auxquelles l'Union européenne doit faire face et ses implications pour le secteur laitier communautaire. L'attention est centrée sur les conséquences d'une suppression du régime des quotas et du mécanisme de l'intervention. Les résultats de simulation montrent comment les conséquences d'un tel scénario dépendent de trois facteurs, i.e., les coûts marginaux de production du lait, la protection tarifaire sur les importations européennes de produits laitiers et les mesures de compensation accordées aux producteurs de lait.     

Quota Transfer Assessments and Efficiency

In order to fund production/marketing quota redistributions or reduce the amount of quota outstanding, regulators often tax quota asset market trades. This assessment is shown to impede the transfer of quota to more efficient producers if rental markets are prohibited. Inefficient producers will produce too much, and the magnitude of cost inefficiencies will increase with the size of the assessment tax. Possible remedies to the problem are also discussed.     

Technical,allocative and economic efficiencies in swine production in Hawaii: a comparison of parametric and nonparametric approaches

Technical, allocative and economic efficiency measures arc derived for a sample of swine producers in Hawaii using the parametric stochastic efficiency decomposition technique and nonparametric data envelopment analysis (DEA). Efficiency measures obtained from the two frontiei approaches are compared. Firm-specific factors affecting productive efficiencies are also analyzed. Finally, swine producers, potential for reducing cost through improved efficiency is also examined. Under the specification of variable returns to scale (VRS), the mean technical, allocative and economic efficiency indices are 75.9%, 75.8% and 57.1%, respectively, for the parametric approach and 75.9%, 80.3% and 60.3% for DEA; while for the constant returns to scale (CRS) they are 74.5%, 73.9% and 54.7%, respectively, for the parametric approach and 64.3%, 71.4% and 45.7% for DEA. Thus the results from both approaches reveal considerable inefficiencies in swine production in Hawaii. The removal of potential outliers increases the technical efficiencies in the parametric approach anil allocative efficiencies in DEA, but, overall, contrary to popular belief, the results obtained from DEA are found to be more robust than those from the parametric approach. The estimated mean technical and economic efficiencies obtained from the parametric technique are higher than those from DEA for CRS models but quite similar for VRS models, while allocative efficiencies are generally higher in DEA. However, the efficiency rankings of the sample producers based on the two approaches are highly correlated, with the highest correlation being achieved for the technical efficiency rankings under CRS. Based on mean comparison and rank correlation analyses, the return to scale assumption is found to be crucial in assessing the similarities or differences in efficiency measures obtained from the two approaches. Analysis of the role of various firm-specific factors on productive efficiency shows that farm size has strong positive effects on efficiency levels. Similarly, farms producing market hogs arc-more efficient than those producing feeder pigs. Based on these results, by operating at the efficient frontier the sample swine producers would be able to reduce their production costs by 38-46% depending upon the method and returns to scale considered.     

Structural Change and Policy Reform in the UK Dairy Sector

Estimation of a cost function for a representative sample of UK dairy producers allows future re‐structuring of the industry to be simulated using a model which incorporates producers' differential costs and milk prices. Consideration is also given to reductions in producer prices and to the introduction of an A/B quota system. The results indicate that, despite the history of quota trading in the UK, there is considerable scope for further restructuring in the industry to take advantage of differential incentives between producers. It is also projected that UK milk supply would increase if quota restrictions were removed.     

Differentiated products and supply controls in the analysis of agricultural policy reform: the case of tobacco

With a multi-market model of the U.S. tobacco and cigarette industries, we analyze the impact of a reduction in the assistance to U.S. tobacco producers by relaxing production quotas with nonbinding price support and by lowering tariffs on tobacco imports. The results show the importance of incorporating differentiated product and supply control assumptions into agricultural policy analysis.