A hedonic approach to estimating the supply of variety attributes of a subsistence crop

The article extends the household hedonic model by estimating a supply function for variety attributes of a subsistence crop in a developing economy. The model is applied to bananas in Uganda, making use of disaggregated data on variety‐specific farm‐gate banana bunch prices and attributes, while accounting for the semisubsistence nature of banana‐producing households. The article is motivated by the need to understand the attribute trade‐offs made by farmers at the farm gate in light of targeted variety improvement efforts and their impact on banana markets. Whether variety improvement will pay off at the market level requires a more detailed examination of the relative worth of banana attributes within the structure of consumer preferences and production technologies related to bananas in Uganda. The results confirm the importance of consumption and production attributes in selling behavior. Quality and bunch size are found to be complements at the farm gate. Banana bunches that capture a premium at the market will be those that provide bundles of desirable consumption and production attributes simultaneously. By revealing important price–attribute relationships, the findings provide guidance for crop improvement efforts and diversification choices, while taking into account implicit market signals for output attributes.     

EU Food Safety Standards,Pesticide Use and Farm‐level Productivity: The Case of High‐value Crops in Kenya

This article provides an empirical analysis of the impact of European Union (EU) private food safety standards on pesticide use and farm‐level productivity among small‐scale vegetable producers in Kenya. We apply an extended three‐stage damage control production framework, accounting for multiple endogeneity problems, to farm‐level data collected from a random cross‐sectional sample of 539 small‐scale producers. Estimation results show that farmers producing vegetables for the domestic market use significantly lower quantities of pesticides than do export farmers. However, contrary to findings elsewhere, the econometric evidence here shows that both domestic and export‐oriented vegetable farmers in Kenya use pesticides at levels below the economic optimum. The results also show that the adoption of standards by export farmers does not have any significant impact on total pesticide use. However, adopter categories are distinguishable in terms of types of pesticide used, i.e. adopters use safer pesticides based on World Health Organization (WHO) classification. The third‐stage structural revenue model results demonstrate that adoption of standards has a positive and significant impact on revenue raised in vegetable production. Nevertheless, farmers producing for the export market are indistinguishable from those producing for the domestic farmers in terms of the total revenue earned from producing vegetables during the rainy season, on a ‘per acre’ basis. Although standards can potentially prevent resource‐poor smallholders from maintaining their position in the lucrative export markets, they can also result in positive changes in the production systems of those small‐scale farmers who adopt it, as shown by these results.     

Are pesticides risk decreasing? The relevance of pesticide indicator choice in empirical analysis

The reduction of adverse health and environmental effects from pesticide use is currently a top priority on the agricultural policy agenda. Efficient pesticide policies must take into account farmers’ application behavior, especially effects of pesticide use on economic risk. However, previous results regarding the direction of risk effects of pesticides are ambiguous. We show that the ambiguity in earlier studies could be due to the pesticide indicator selected. Indicators which fail to account for the heterogeneous properties of pesticides may be inapt for interpreting farmers’ pesticide use decisions. Our analysis, based on a rich panel dataset of Swiss wheat producers with highly detailed information on pesticide use, considers different pesticide indicators and multiple sources of uncertainty. Our key finding is that indicator choice affects the magnitude and sign of estimated risk effects. Estimates of pesticide productivity and risk effects are significantly higher for fungicides, and even reversed for herbicides when we measure pesticide use in simple quantity units (kilogram per hectare) - compared to the quality and intensity corrected Load Index. This means for example, that farmers will ceteris paribus use lower quantities of herbicides, but will increase the overall toxicity of the products applied with increasing risk aversion. We discuss implications of our findings for the design of pesticide policies and agricultural risk management instruments.     

Pesticide use in Vietnamese vegetable production: a 10-year study

Vietnam has had varying success over the past decade with its pesticides policy. Some of the most toxic pesticides have been banned from the market. But while many countries have successfully decreased agricultural pesticide use per hectare, this has not (yet) happened in Vietnam. Due to insufficient pesticide management capacity of the Vietnamese government, pesticide types and quantities registered and distributed on the market have substantially increased in Vietnam over the last 10 years. A 10-year monitoring programme at farm level showed that pesticide use follows the increasing pesticide availability on the market, and many toxic and illegal pesticides are still being used. In an agricultural country dominated by millions of small-scale farmers and with limited state capacity for control at farm level, reduction of the use of the most toxic pesticides can best be achieved by more effective pesticide market control through stricter and more effective state regulations and implementation, aimed at eliminating illegal, low quality and counterfeit pesticides from the market. But even then, better state and private extension services, and greater state capacity for control and enforcement remain essential in enabling farmers to make better decisions about pesticide use.     

Risk aversion in agricultural water management investments in Northern Ghana: experimental evidence

Sub‐Saharan Africa (SSA) is one of the regions in the world most affected by food price volatility and production variability. Poor small‐scale farmers in this region are particularly vulnerable to this variability. As a result, households may be reluctant to adopt new agricultural water management (AWM) technologies when they involve more risk than what they mitigate. Despite risk's role in AWM investments, there have been few attempts to estimate the magnitude and nature of risk aversion in relation to this type of farm decisions. To partially close this gap, this article uses an experimental approach applied to 137 households in Northern Ghana. We find that more than 70% of households are moderately or slightly risk averse. This contrasts with other studies in SSA, where most household decision‐makers exhibit severe to extreme risk aversion. We also find that households that stand to lose as well as gain something from participation in games are less risk averse than households playing gains‐only games. This result suggests that most farmers’ current wealth put them at risk of falling into a poverty trap. Thus, the losses from the riskiest investments on AWM technologies may fall more heavily on the poor, suggesting that additional efforts be given to the creation of viable insurance mechanisms.     

Effect of off‐farm income on smallholder commercialization: panel evidence from rural households in Ethiopia

This article investigates how off‐farm income affects crop output market participation decisions and marketed surplus of smallholder farmers in Ethiopia. A double‐hurdle model is estimated using three waves of panel data from the Ethiopian Rural Household Survey. Unobserved heterogeneity is controlled for using a correlated random effect procedure and potential endogeneity of explanatory variables using a control function approach. The results show that off‐farm income has no significant influence on household crop output market participation. However, conditional on market participation, additional off‐farm earnings negatively affect the marketed surplus. This indicates that farmers use off‐farm earnings for consumption rather than for investment in agricultural production. Policy measures that promote rural investment may help increase returns to labor for land‐poor households participating in off‐farm work in the process of agricultural commercialization.     

A Pinch or a Pint? Evidence of Pesticide Overuse in Bangladesh

In a recent survey of 820 rice, potato, bean, eggplant, cabbage, sugarcane and mango farmers in Bangladesh, over 47% of farmers were found to be overusing pesticides. With only 4% of farmers formally trained in pesticide use or handling, and over 87% openly admitting to using little or no protective measures while applying pesticides, overuse is potentially a great threat to farmer health as well as the environment. Pesticide overuse was initially modelled using a three‐equation, trivariate probit framework with health effects and misperception of pesticide risk as endogenous dummy variables. Significance tests revealed that health and misperception were not endogenous to overuse, suggesting a bivariate probit model for health effects and misperception and a separate probit model for overuse. Health effects were found to be a function of the amount of pesticides used in production, nutritional status and income, while misperception of pesticide risk was determined by health impairments from pesticides and the toxicity of chemicals used. Pesticide overuse was significantly explained by variation in misperception, income, farm ownership, the toxicity of chemicals used, crop composition and geographical location. These results highlight the necessity for policymakers to design effective and targeted outreach programmes which deal specifically with pesticide risk, safe handling and averting behaviour. Ideally, the approach would be participatory in nature to address key informational gaps, as well as increasing: farmers’ awareness. The results also point to specific crops and locations experiencing a higher prevalence of overuse. Focusing efforts on these crops and geographical areas may have the most measurable effects on pesticide overuse.     

Pesticide Productivity and Transgenic Cotton Technology: The South African Smallholder Case

This paper empirically investigates how the productivity of pesticide differs in Bt versus non‐Bt technology for South African cotton smallholders, and what the implications for pesticide use levels are in the two technologies. This is accomplished by applying a damage control framework to farm‐level data from Makhathini flats, KwaZulu‐Natal. Contrary to findings elsewhere, notably China, that farmers over‐use pesticides and that transgenic technology benefits farmers by enabling large reductions in pesticide use, the econometric evidence here indicates that non‐Bt smallholders in South Africa under‐use pesticide. Thus, the main potential contribution of the new technology is to enable them to realise lost productivity resulting from under‐use. By providing a natural substitute for pesticide, the Bt technology enables the smallholders to circumvent credit and labour constraints associated with pesticide application. Thus, the same technology that greatly reduces pesticide applications but only mildly affects yields, when used by large‐scale farmers in China and elsewhere, benefits South‐African smallholder farmers primarily via a yield‐enhancing effect.     

Production risk,risk aversion and the determination of risk attitudes among Spanish rice producers

Agricultural production is subject to risk and the attitudes of producers toward risk will influence input choices insofar as these affect production risk. Risk attitudes in turn may be affected by certain socioeconomic characteristics of producers. Using 2004 survey data from a cross‐section of 130 Spanish rice farms, we estimate risk‐aversion coefficients of farmers and investigate the influence of a series of socioeconomic variables on their risk attitudes. Our results show that farmers exhibit risk‐averse behavior and that risk attitudes are related to a series of socioeconomic characteristics. In particular, the belief that the farm will continue after the producer retires is found to increase the degree of risk aversion, while age is found to have nonlinear effects on risk aversion. Off‐farm income, especially from nonagricultural activities, is found to reduce risk aversion. Neither the educational level of the producer nor the presence of dependents on the household is found to have an effect on risk preferences. Regarding the production technology, we find that land, labor, and fitosanitary products are risk‐reducing inputs, whereas capital, seeds, and fertilizer all increase risk.     

Sales location among semi‐subsistence cassava farmers in Benin: a heteroskedastic double selection model

In much of rural Africa, high transaction costs limit farmers’ market participation and thus their potential for income growth. Transaction costs can affect not only whether a farmer sells product but also whether sales occur at the farm gate or at a market. If production behavior is related to a chosen sales location, then analysis of interventions can be improved by explicit consideration of the decision of where to sell. This article develops a double‐selection model that explains consumption and production decisions by semi‐subsistence farmers who first decide whether to be a seller and then whether to sell at the farm gate or at an off‐farm location before deciding on production and consumption. The study tests the validity of this dual‐criteria model against a single‐criterion model in which a grower first decides to be a seller and then decides production, consumption, and sales location simultaneously. The results suggest that the dual‐criteria model provides more information than the single‐criterion model using a sample of cassava producer in Benin.     

How crop insurance influences agrochemical input use: Evidence from cotton farmers in China

Crop insurance is critical in risk management in global agricultural production (e.g. by helping stabilise farmers' incomes in the long term and reducing risk-bearing costs). In this paper, using field survey data on cotton farmers in Xinjiang, China, we examine the influence of crop insurance on farmers' behaviours regarding agrochemical inputs and aim to investigate the synergy between crop insurance and reductions in fertiliser and pesticide usage. We find evidence that crop insurance significantly negatively affects farmers' use of fertilisers and pesticides, as well as significantly positively affects their adoption of green agricultural technologies (GAT) that can replace or complement traditional fertilisers and pesticides. Moreover, our results reveal that compared with small-scale farmers, crop insurance has a stronger effect on large-scale farmers' use of agrochemicals. Finally, when the insured amount is higher or the relative deductible is lower, farmers are more likely to reduce fertiliser and pesticide usage and adopt GAT. Overall, this paper scientifically identifies crop insurance can improve farmers' agrochemical input behaviour, by reducing farmers' use of traditional agrochemical inputs and increasing their adoption of GAT, which is of great significance for ensuring the safety of the agricultural ecological environment.     

Pests and pesticides,risk and risk aversion

Theoretical and applied literature on risk in decision making for agricultural pest control is reviewed. Risk can affect pesticide decision making either because of risk aversion or because of its influence on expected profit. It is concluded that risk does not necessarily lead to increased pesticide use by individual farmers. Uncertainty about some variables, such as pest density and pest mortality, does lead to higher optimal pesticide use under risk aversion. However, uncertainty about other important variables, such as output price and yield, leads to lower optimal levels of pesticide use. Neglect of these variables in most studies has led to the false assumption that pesticides are always risk-reducing inputs. Furthermore, there is evidence that, in general, the pesticide dosage which maximises expected profit is lower under risk than under certainty. Depending on the balance of forces to increase and decrease pesticide use under risk, in many circumstances the net effect of risk on optimal decision making for pest control may be minimal. The effect on risk of information about pest density and other variables (as in integrated pest management programmes) is discussed. Evidence on this issue is mixed. A range of analytical techniques for analysing risk in pest control is reviewed. Throughout the paper, gaps in the existing literature are identified.     

Heterogeneous impacts of information technology adoption on pesticide and fertiliser expenditures: Evidence from wheat farmers in China*

This study examines the impacts of mobile information technology adoption on agrochemical expenditures, using data collected from 551 wheat farmers in China. Unlike previous studies that analyse a homogeneous relationship between the adoption of information technologies and farm input use, in this study, an instrumental variable quantile regression approach is utilised to capture the heterogeneous impacts of smartphone use on pesticide and fertiliser expenditures. Findings reveal that smartphone use affects pesticide and fertiliser expenditures heterogeneously, and its impacts on pesticide expenditure are larger than those on fertiliser expenditure. Specifically, at the lowest 20th quantile, smartphone use significantly increases pesticide expenditure by 33 per cent and fertiliser expenditure by 18 per cent. However, at the higher 60th and 80th quantiles, smartphone use significantly decreases pesticide expenditure by 36–39 per cent and fertiliser expenditure by 14–19 per cent. Our findings suggest that guiding farmers’ agrochemical usage behaviours through smartphone-based information intervention can be a practical strategy to help reduce the excessive usage of chemical pesticides and fertilisers and preserve the environment and human health.     

The influence of risk preferences,knowledge, land consolidation,and landscape diversification on pesticide use

Researchers have spent substantial effort to identify factors influencing pesticide use intensity. However, few studies have compared the relative importance of these factors. This study examines four categories of factors that potentially influence farmers’ pesticide use decisions by evaluating incentivized experiment data, farm survey data, and remote sensing data in China. Our results suggest that land diversification has the largest effect on farmers’ pesticide use. Compared with the most rice-intensive landscape type, less rice-intensive systems cause farmers to spray less on middle rice. Heavy pesticide use intensity is associated with land fragmentation as small-scale farms still dominate crop production. Farmers’ integrated pest management knowledge has significant effects on pesticide use. We also find that loss and ambiguity preferences, rather than risk preferences, are more likely to affect pesticide use intensity.     

基于SWOT分析的寿光市设施蔬菜减施农药对策研究

[目的]农药作为蔬菜生产中主要的投入品,在杀虫灭菌、控草护田、生长调节等方面发挥着重要作用,对于保障蔬菜供给意义重大。但是在设施蔬菜种植过程中,由于不合理、过量施用农药导致出现部分蔬菜产品农残超标、农药污染农田生态环境等问题,推进农药减施刻不容缓。[方法]文章运用SWOT分析方法研究寿光市设施蔬菜种植中减施农药的内外部条件,根据有利因素和不利因素调整发展思路,改善农药的不合理使用现状。[结果]通过分析发现,寿光市设施蔬菜种植中减施农药的优势是资源条件好、农户蔬菜种植经验丰富、安全用药意识高;劣势是病虫害抗药性渐强、农户传统的用药习惯根深蒂固且减施农药意愿低;机遇是消费者的需求升级、科学技术水平提高以及相关减施政策实施;挑战是当前市场竞争激烈且政府监管欠佳。[结论]推进设施蔬菜农药减施应采取以下对策:(1)统防统治与绿色防控技术并举,保障蔬菜的质量安全和生物多样性的发展;(2)提升意识与科学用药并重,促进当地蔬菜生产稳定发展;(3)政府监管与信息共享统筹,规范农资市场和农产品市场的交易行为;(4)农业保险与农业补贴兼顾,建立起适度超前、开放灵活政策保障体系。     

Land degradation, drought and food security in a less-favoured area in the Ethiopian highlands: a bio-economic model with market imperfections

This paper presents a bio‐economic model of Andit Tid, a severely degraded crop‐livestock farming system with high population density and good market access in the highlands of Ethiopia. Land degradation, population growth, stagnant technology, and drought threaten food security in the area. Drought or weather risk appears to have increased in recent years. The bio‐economic model is used to analyse the combined effects of land degradation, population growth, market imperfections and increased risk of drought on household production, welfare and food security. We find that the indirect effects of drought on household welfare through the impact on crop and livestock prices are larger than the direct production effects of drought. Provision and adoption of credit for fertiliser, although risky in itself, may lead to increased grain production and improved household welfare and food security. Provision of credit may have a negative effect on conservation incentives but this effect may be mitigated by linking a conservation requirement to the provision of credit for fertiliser.     

Coping with systemic risk in index‐based crop insurance

The implementation of index‐based crop insurance is often impeded by the existence of systemic risk of insured losses. We assess the effectiveness of two strategies for coping with systemic risk: regional diversification and securitization with catastrophe (CAT) bonds. The analysis is conducted in an equilibrium pricing framework which allows the optimal price of the insurance and the number of traded contracts to be determined. We also explore the role of basis risk and risk aversion of market agents. The model is applied to a hypothetical area yield insurance for rice producers in northeast China. If yields in two regions are positively correlated, we find that enlarging the insured area leads to higher insurance premiums. Unless capital market investors are very risk averse, a CAT bond written on an area yield index outperforms regional diversification in terms of certainty equivalents of both farmers and insurers.     

Can smallholder farmers adapt to climate variability,and how effective are policy interventions? Agent‐based simulation results for Ethiopia

Climate variability with unexpected droughts and floods causes serious production losses and worsens food security, especially in Sub‐Saharan Africa. This study applies stochastic bioeconomic modeling to analyze smallholder adaptation to climate and price variability in Ethiopia. It uses the agent‐based simulation package Mathematical Programming‐based Multi‐Agent Systems (MPMAS) to capture nonseparable production and consumption decisions at household level, considering livestock and eucalyptus sales for consumption smoothing, as well as farmer responses to policy interventions. We find the promotion of new maize and wheat varieties to be an effective adaptation option, on average, especially when accompanied by policy interventions such as credit and fertilizer subsidy. We also find that the effectiveness of available adaptation options is quite different across the heterogeneous smallholder population in Ethiopia. This implies that policy assessments based on average farm households may mislead policy makers to adhere to interventions that are beneficial on average albeit ineffective in addressing the particular needs of poor and food insecure farmers.     

Farm share of the food dollar: an IO approach for the United States and Canada

This article develops a method for using input–output data to calculate a farm share estimate for all food rather than the typical approach of estimating a price spread for an individual product. The farm share of the food dollar is approximately 14% in the United States and 17% in Canada. The farm share increased somewhat during the commodity price boom but has generally fallen steadily by approximately 20% since 1997. While the farm share of expenditures on food for home consumption is approximately 22% across both countries, it is 4% in the United States and 7% in Canada for meals consumed away from home. The empirical framework can be extended to other countries given the extensive use of System of National Account data making international and temporal comparisons possible across farm and food marketing systems.     

Selfishness,altruism, and inequality aversion toward consumers and farmers

One hypothesis explaining the persistence of farm programs in the United States is the public's altruism toward farmers. We utilize economic experiments to identify the motivations of selfishness, altruism, and inequality aversion toward anonymous members of the general population and toward different types of farmers. We find that people are generally less selfish and more altruistic toward small farmers than other members of the population. We also find that (i) people are more averse to inequality in a market‐like setting as compared to a nonmarket setting, (ii) there is significant heterogeneity across people in terms of other‐regarding preferences, and (iii) experimental choices accurately predict preferences for “real‐world” income re‐distribution policies that entail giving up one's own money to benefit farmers, but fail to predict preferences for policies that redistribute others’ incomes.