Protecting Forests Through Farming. A Dynamic Model of Nontimber Forest Extraction

Forest resource extraction by local communities has been cited as a major impediment to the efficient management of protected forests. This paper develops a two sector dynamic model for farming and forest resource extraction by communities living in the forest periphery. The model assumes that land under forestry is constant and households allocate their time to farming and forestry. Comparative dynamic results suggest that higher prices for agriculture output, lower input prices, better knowledge of farming techniques and a lower discount rate may result in a higher equilibrium stock of forest resources. Tobit analysis with primary data collected from the Sinharaja forest in Sri Lanka provides supportive empirical evidence.     

Spatial and Temporal Changes in the U.S. Hog, Dairy, and Fed-Cattle Sectors, 1975–2000

The hog, dairy, and fed-cattle sectors have become more geographically concentrated within states across the country. Hog and dairy inventories increased in nontraditional production regions but fed-cattle inventories increased only in the three major producing states. Regions in the northeastern quadrant of the United States tended to experience an attrition pattern of geographical concentration in livestock production. In contrast, an augmentation pattern is evident in the western regions where absolute inventory numbers increased along with geographical concentration. The patterns are most closely associated with changes in regional processing capacity.     

Does Canada Need Mandatory HACCP? Evidence from the Ontario Food Processing Sector

The likelihood of the voluntary adoption of hazard analysis and critical control point (HACCP) among food processing firms is evaluated by exploring the perceptions of food safety managers with respect to a range of possible motivating factors including the exogenous pressure to adopt HACCP, efficacy of existing food safety controls, perception that HACCP will improve the firm's food safety controls, relative costs and benefits of HACCP implementation, impact of HACCP on business performance, and the nature of barriers to implementing HACCP. While market‐based factors exert substantial pressure on firms to adopt HACCP, many food safety managers perceive that their existing food safety controls are adequate to meet existing food safety demands. While good manufacturing practice (GMP) and traceability are considered the most efficacious food safety controls, HACCP is most often perceived to provide intangible and “incidental” benefits that are often not recognized by food safety managers a priori. An important barrier to the voluntary adoption of HACCP is the perceived questionable appropriateness of HACCP for enhancing food safety controls, while financial constraints can be an absolute barrier to implementation. The results suggest a number of potential strategies through which the implementation of HACCP might be facilitated and enhanced through cooperation and coordination between regulators and industry organizations. La probabilité que les entreprises de transformation des aliments adoptent volontairement le système HACCP (analyse des risques et maîtrise des points critiques) a étéévaluée en examinant les perceptions des gestionnaires de sécurité alimentaire envers certains facteurs de motivation possibles tels que la pression exogène, l'efficacité des moyens de contrôle existants, la perception voulant que le système HACCP améliore le contrôle de la sécurité alimentaire de l'entreprise, les coûts et les avantages relatifs de la mise en place du système, les répercussions du système sur la performance de l'entreprise et la nature des obstacles à la mise en place du système. Bien que des facteurs de marché exercent d'importantes pressions pour que les entreprises adoptent ce système, de nombreux gestionnaires de sécurité alimentaire estiment que leurs moyens de contrôle existants répondent adéquatement aux demandes actuelles de sécurité alimentaire. Bien que les bonnes pratiques de fabrication (BPF) et la traçabilité soient considérées comme les moyens de contrôle de la sécurité alimentaire les plus efficaces, le système HACCP est le plus souvent perçu comme procurant des avantages intangibles et ?accessoires? qui, souvent, ne sont pas reconnus a priori par les gestionnaires de sécurité alimentaire. La pertinence discutable perçue du système HACCP comme moyen d'améliorer le contrôle de la sécurité alimentaire constitue un important obstacle à l'adoption volontaire du système, bien que les contraintes financières peuvent être un obstacle absolu à sa mise en place. Les résultats suggèrent un certain nombre de stratégies potentielles grâce auxquelles la mise en place du système pourrait être facilitée et améliorée par la collaboration et la coordination entre les organismes de réglementation et les entreprises de l'industrie de la transformation des aliments.     

Using Copula Functions in Bayesian Analysis: A Comparison of the Lognormal Conjugate

Bayesian techniques have been applied to analyze sequential investment decisions in the capital budgeting literature. This article introduces copula-based Bayesian analysis as an alternative to the traditional approach where conjugate relationships do not exist. Using a numerical example, we illustrate the steps involved in the copula-based Bayesian approach. Graphical techniques for selecting an appropriate copula are also discussed. The unique ability of copulas to model nonlinear dependence rationalizes the use of copula functions as an alternative technique.     

Factors determining intercropping by rubber smallholders in Sri Lanka: a logit analysis

Variables related to farmers' awareness and attitudes towards intercropping of immature rubber (Hevea brusiliensis) stands, extension contacts, education level, and experience with farming other crops are positively associated with the probability of adoption. Higher levels of off‐farm income are associated with reduced intercropping in immature rubber stands. Farmers who are sole owners of the land and engaged in full or part‐time rubber farming show lower adoption rates than other land ownership groups. Social participation, family size, experience with farming rubber, immature and mature rubber stands size, and the nature of the land (flat/sloped) do not significantly influence adoption. These conclusions were obtained from a logit model estimated by employing the results of a survey of 588 smallholder rubber farmers from five major rubber‐growing regions in Sri Lanka.     

Multi-attribute preference modelling and regional land-use planning

Forest management policy decisions are complex due to the multiple-use nature of goods and services from forests, difficulty in monetary valuation of ecological services and the involvement of a large number of stakeholders. Multi-attribute decision techniques can be used to synthesise stakeholder preferences related to regional forest planning because it can accommodate conflicting, multidimensional, incommensurable and incomparable objectives. The objective of this paper is to examine how the Analytical Hierarchy Process (AHP) can be used to incorporate stakeholder preferences in determining optimal forest land-use choices. The Australian Regional Forest Agreement Programme is taken as an illustrative case for the analysis. The results show that the AHP can formalise public participation in decision making and increase the transparency and the credibility of the process.     

Crack spread option pricing with copulas

A copula-based approach for pricing crack spread options is described. Crack spread options are currently priced assuming joint normal distributions of returns and linear dependence. Statistical evidence indicates that these assumptions are at odds with the empirical data. Furthermore, the unique features of energy commodities, such as mean reversion and seasonality, are ignored in standard models. We develop two copula-based crack spread option models using a simulation approach that address these gaps. Our results indicate that the Gumbel copula and standard models (binomial, and Kirk and Aron (1995)) mis-price a crack spread option and that the Clayton model is more appropriate. We contribute to the energy derivatives literature by illustrating the application of copula models to the pricing of a heating oil–crude oil “crack” spread option.