Modeling differentiated quality standards in the agri-food sector: the case of meat trade in the enlarged EU

Quality standards play an increasingly important role in international agri-food trade, and their functioning as nontariff barriers to trade is widely discussed. We argue that food quality standards imposed by importing countries are more than just border measures and can have profound effects on the market structure of the exporting industry, thereby significantly influencing the supply response. We develop a stylized oligopoly model that accounts for compliance costs (fixed and variable) and investigate alternative policy options to explore different mechanisms an importing county may use to enhance the quality of its imports. The model explicitly recognizes the coexistence of complying and noncomplying firms, which is a situation often found in low-income countries where a small modern export-oriented segment invests in meeting foreign quality standards. We use the adjustment of the Polish meat sector to the tight EU food quality standards as an empirical example. The simulations show that a subsidy scheme can promote compliance with standards and can contribute to an upgrade of the industry in the exporting country, but its marginal effectiveness is diminishing.     

Returns on Investments in Energy-saving Technologies Under Energy Price Uncertainty in Dutch Greenhouse Horticulture

Conventional net presentvalue calculations evaluating the profitabilityof investments in energy-saving technologies inDutch horticultural outlays predict a muchhigher rate of adoption of these technologiesthan is actually observed. This paper tries toexplain this gap by applying a real optionsframework. Hurdle rates for investments in twotypes of energy-saving technology are estimatedusing simulated future revenue streams, givenuncertainty regarding energy prices and energytax policies. Hurdle rates found in this wayare on average about 1.76 times the hurdlerates that result from net present valuecalculations. Furthermore, this paper tests thepredictive value of the theory by estimating alogit model. This model relates the incidenceof having invested in an energy-savingtechnology to the difference between the returnon investment and the hurdle rate. Thepredictive power turns out to be encouraging,as the statistical tests indicate that higherhurdle rates tend to reduce rates of technologyadoption.     

Endogenous International Technology Spillovers and Biased Technical Change in Agriculture

This paper analyzes trade-related knowledge flows from an innovating country to other countries. It is assumed that knowledge is embodied in commodities traded between countries and that the potential productivity of this knowledge is determined by the local usability of foreign technologies. The usability of foreign knowledge is dependent on the local absorption capacity (such as knowledge infrastructure and human capital) and on structural differences (factor endowments or climate) between countries. In agriculture, a large portion of the knowledge is embodied in inputs which cause factor-biased technical change in the receiving sectors. Trade-related knowledge transmission is introduced in an applied multi-region general equilibrium model (GTAP) to study the macro-economic and sectoral impacts of knowledge spillovers and of trade policies. Endogenous embodied technology spillovers bear some important implications for trade policy, because protective measures preclude countries not only from cheaper imports but also from foreign technologies.     

Climate change and trade in agriculture

Agricultural productivity in both developing and developed countries will have to improve to achieve substantial increases in food production by 2050 while land and water resources become less abundant and the effects of climate change introduce much uncertainty. Already less resilient production areas will suffer the most, as temperatures will rise further in tropical and semi-tropical latitudes and water-scarce regions will face even drier conditions. International trade plays an important role in compensating, albeit partially, for regional changes in productivity that are induced by climate change. While a well-functioning international trade system can support the adaptation to climate change-related challenges, trade policies as such are imperfect instruments to induce less emissions globally. A well-functioning international trading system can support the adaptation to climate change-related challenges. Hence welfare gains from reforms to trade policies may be greater than normally measured if they also reduce GHG emissions globally.     

Designing analytical data frameworks

The article is about design of analytical data frameworks that make optimal use of micro data available to serve the needs of the policy analyses and create a maximum number of data checks at the macro or meso level. As the SNA is one of the most extensive analytical data frameworks, the notions developed in this paper will be applied mainly to data segments of the SNA and in particular to a much used data segment of the SNA, i.e. the Supply and Use Table (SUT). The larger part of the paper focuses on defining a simplified SUT and using a so-called "system of classifications and correspondences," that is based on international SNA and classification standards but taking into account specific features of the economy of a country, data availability and the type of analysis served by the framework. The simplified SNA should be comprehensive, but should avoid unnecessary cross-classifications of data and details.