Informal barriers and agricultural trade: does monetary integration matter?

EU enlargement and the recent sovereign‐debt crisis of Euro zone countries have revived the debate around the (European Monetary Union) EMU. In this article we ask how informal barriers to agricultural and food trade have changed since the introduction of the common European currency, and whether this evolution can be attributed to monetary integration. We focus on the foreign trade of the 11 EMU founder countries over a nine‐year period covering the creation of the EMU and find a diminishing marginal trade impact of both information and institutional barriers. We find a lower level of trade barriers, but cannot attribute this outcome to the introduction to the Euro.     

What comes first,agricultural growth or democracy?

Today, the international community faces two major development challenges: how to ignite growth and how to establish democracy. Economic research has identified two plausible hypotheses regarding this association. The first hypothesis emphasizes the need to start with democracy and institutions that secure property rights. The second hypothesis emphasizes the need to start with physical and human capital accumulation. In this article, we discuss some of the econometric evidence on the relationship between institutions, human capital, and agricultural productivity growth across developed and developing countries with the objective of finding support for one or the other hypothesis. We find that most variables used in the literature to capture the effect of institutions are not independent of the process of growth. While no evidence of causation from political institutions to agricultural productivity growth is found, human capital accumulation emerges as an important source of growth.     

Leisure traveller perceptions of iconic coastal and fjord countryside areas: Lush naturalness or remembrance of agricultural times past?

Several iconic coastal and fjord landscapes in Northern Norway have undergone natural spontaneous regrowth of abandoned agricultural areas and pastureland. At the same time, recent public discourse has assumed that such regrowth may taint tourists’ and outdoor recreationists’ perceptions of rural areas. Consequently, this in situ multilingual study in the archipelago of Vesterålen investigated this assumption. The results revealed that tourists’ and visiting recreationists’ foremost interest was in pristine rural areas that seemed devoid of human presence or activity. At the same time, roughly half of the visitors enjoyed seeing working farms. The enquiry displays preference ambivalence about the combination of “cultural” and “natural” elements of the rural landscape. The investigation also illustrates a disparity between foreign tourists’ desire for lush deciduous vegetation and Norwegian visitors’ fondness for a more open agricultural seaside with grassland and shrubland and just a few scattered trees, as the study area had appeared some decades earlier. Moreover, some implications of land use policy are discussed.     

Balancing productivity and trade objectives in a competing environment: should India commercialize GM rice with or without China?

India is considering approving genetically modified (GM) rice, but it fears losing rice exports to sensitive countries with import regulations on GM food, and may wait for China to lead the way. Using a multiregion, computable general equilibrium (CGE) model, we simulate the economic effects of introducing GM rice in India with or without China in the presence of labeling and import approval regulations of GM food in GM sensitive importing countries. We find that the welfare gains with GM rice in India would largely exceed any potential export loss, and that the segregation of non-GM rice could help reduce these minor losses. We also find no significant first mover advantage for India or China on GM rice. The opportunity cost of segregation of non-GM rice is much larger for sensitive importers than for India, which suggests that these importers would have the incentive to pay for the cost of segregation.     

Specialization or diversification? The situation and transition of households’ livelihood in agricultural heritage systems

Zhagana Agriculture-Forest-Animal Husbandry Composite System (ZCS) is the first Globally Important Agricultural Heritage Systems site in the Tibetan Plateau. Similar to many traditional agricultural regions, with the development of tourism and leisure agriculture, the peasant households in ZCS have gradually changed their livelihood strategies and livelihood activities in the past 10 years, resulting in the disappearance of some traditional farming methods and agricultural landscapes with a long history. By taking livelihood assets as the entry point and livelihood strategies as the core, this paper analyzed the basic situation of households’ livelihood and the transition mechanism of different livelihood strategies in order to offer suggestions for the dynamic conservation and sustainable development of Agricultural Heritage Systems (AHS). (1) The livelihood strategies of peasant households in ZCS can be divided into two major categories: specialized strategies and diversified strategies. (2) According to the empirical calculation of the livelihood asset accounting framework of AHS, the average livelihood asset value of peasant households in ZCS is 2.040, showing that the situation of peasant households’ livelihood is inadequate. (3) The transition of peasant households’ livelihood strategies from traditional strategy to specialized or diversified livelihood strategies is mainly influenced by natural assets, human assets, cultural assets, social assets and informational assets. In order to meet the growing material and spiritual needs of peasant households and achieve the sustainable development of ZCS simultaneously, it is suggested that the agriculture-forestry-animal husbandry-tourism composite strategies shall be taken as the development direction of peasant households’ livelihood strategies.     

Smallholder cooperatives and agricultural performance in Rwanda: do organizational differences matter?

Agricultural policies in Rwanda focus on agricultural intensification and increased market orientation of the smallholder farm sector. Cooperatives are seen as key vehicles in this, but little is known about their effectiveness to achieve these goals. In this article, we analyze the impact of cooperative membership on the agricultural performance of rural households in Rwanda. We use cross‐sectional survey data, collected in 2012, to analyze the impact of cooperative membership on different agricultural performance indicators, including indicators on agricultural intensification, market orientation, farm revenue, and income. We use several econometric techniques to deal with potential selection bias in estimating the impact of cooperative membership, including a proxy variable method based on a willingness to pay measure and propensity score matching methods. We find that cooperative membership in general has a positive impact on farm performance but these effects are driven by specific types of cooperatives.     

Is the growth of regionalism as significant as the headlines suggest? Lessons from agricultural trade

The proliferation of regional trade agreements (RTAs) has motivated a significant number of ex post econometric studies investigating their agricultural trade impacts. The general conclusion is that RTAs increase members’ trade by as much as 150%, on average. In this article, we demonstrate that previous empirical work likely misrepresents the impact of RTAs because of considerable heterogeneity in the depth of economic integration pursued by these agreements. Contrary to previous studies, the results reveal that RTAs are not universally trade creating, and some agreements appear to provide very little benefit. “Deep integration agreements,” on the other hand, are largely responsible for the impressive agricultural trade flow increases reported in the literature. Testing the hierarchy of RTAs largely confirms the theory: the benefits of regionalism are an increasing function of the depth of economic integration.     

The transformation of the Indian agricultural input industry: has it increased agricultural R&D?

Indian agricultural input industries have gone through a major transformation in the last 40 years. State owned firms grew during the Green Revolution and then stagnated or declined. Indian corporations that were protected from foreign competition are now exporters of agricultural tractors and pesticides. Foreign multinational corporations are rapidly increasing their role in the seed, pesticide, and tractor industries. Entry by large Indian firms and multinationals has increased competition in the input industries. Private agribusiness R&D in India grew from $23 million in 1985 to $250 million in 2009 in 2005 US dollars. This is the same time period as a transformation in the agricultural input industry, rapid growth in demand for agricultural inputs, breakthroughs in information technology and biotechnology, and changes in intellectual property rights. An econometric model was used to test whether the transformation of agricultural input industry was a major factor in the growth of R&D expenditure or not. This article analyzes a unique, firm level sales and R&D data set from the seed, pesticide, tractor, and fertilizer industries in 2000–2009. The estimated model indicates that agribusiness firms' R&D expenditures from 2000 to 2009 were positively related to variables associated with industry transformation such as firm size, ownership by multinationals, and declining industry concentration. The model also indicates that strengthening patent policy as well as growth in the size of research‐intensive industries like the seed industry contributed to the growth of agribusiness R&D in India.     

Determinants of dairy-product trade: Do subsidies matter?

Given the recent changes in the supply and demand of dairy products, many opportunities arise for exporting and importing countries. This paper examines determinants of dairy-product trade by applying the Poisson Pseudo-Maximum Likelihood (PPML) method to the gravity model using panel data on 49 exporting and 235 importing countries for the 17 years from 2000 to 2016. The gravity model is estimated using both interval data and dynamic analyses. The results show that domestic subsidies have a modest, but significant, impact on dairy-product trade across the models. For example, a 1% increase in subsidies leads to a roughly 0.02% increase in trade for an average country. Memberships in trade agreements, market size factors, and government institutions also positively affect dairy-product trade. However, tariffs are insignificant in the main model specification. Results from the lag-policy analysis show that the impact of subsidies disappears after the second year of distribution; whereas for the lead-policy analysis, results suggest at least 3 years of anticipatory effects on domestic subsidies.     

Agricultural mechanization and reduced tillage: antagonism or synergy?

This paper reviews agricultural mechanization and reduced tillage use in the context of sustainable intensification in developing country agriculture. The scoping review includes selected and contrasting cases – including Zimbabwe (manual systems), Bangladesh (2-wheel – single axle tractor systems), India (4-wheel – i.e. 2 axles tractor systems), Kazakhstan (mechanized systems) and Brazil (diverse systems). The expansion of reduced tillage appears strongly associated with the level of agricultural mechanization – facilitated by a number of common drivers and contextualized by the prevailing farm power and intensity of tillage. Soil conservation, timely planting and farm power savings in crop establishment are important drivers for the expansion of reduced tillage across the world, facilitated by conducive markets, institutional and policy environments and the integration of diverse actors to introduce, adapt and promote the necessary components.     

Blackleg or blackmail? Economics of the Canada–China canola trade dispute

The Chinese government's recent decision to suspend the export licenses of two Canadian grain firms has garnered international attention. The dispute has been portrayed by some as a diplomatic dispute between two countries, and by others as a concern about plant health. We analyze the economics of the dispute, including a simple economic model of international trade in which a large-country importer imposes a targeted import ban on one large-country exporter. The model provides a framework for understanding the economic effects of a trade ban under various market conditions. We also discuss the legal framework and dispute settlement process that would be encountered if the disagreement proceeds to a formal dispute in the World Trade Organization.     

Grain marketing and National Competition Policy: Reform or Reaction?

Grain marketing arrangements in Australia have been controversial for many years. Following an account of the historical background to grain marketing, this article concentrates on more recent debates. The most interesting technical economic argument concerns the validity of claims that statutory marketing authorities with export monopoly powers can obtain higher prices. The article also discusses how marketing in Australia has been affected by Commonwealth and State Government policies with respect to microeconomic reform and privatization. Although major changes appear to have been made in grain marketing and its institutions, there are inherent economic problems with the current approach to deregulation.     

Beyond the agroecological and sustainable agricultural intensification debate: Is blended sustainability the way forward?

With the sustainable development goals has come a renewed global interest in ending hunger and achieving food security, while preventing natural resource degradation. Despite this renewed interest and increased commitments to invest in agricultural development, there is an outstanding debate over the technological trajectories to sustainability. The debate centres on sustainable agricultural intensification (SAI) and agroecological intensification (AEI) pathways to agricultural sustainability. Using a systematic literature review approach, this study examines the debate over AEI and SAI. This study employs a theoretical framework based on the economic, social, and ecological dimensions of sustainable agriculture within a policy and institutional space. Based on the sustainability dimensions, a discourse analytical technique is applied to unravel the debate. The results reveal differences in actor composition in the SAI and AEI pathways. Both pathways aim to promote food security with optimal and sustainable use of inputs; however, the actors differ on discourse relating to the concept of farming, the role of genetic engineering, the scale of operation, land use and soil health. Resolving these differences requires a blended sustainability approach that moves beyond the current AEI and SAI debate by acknowledging the tradeoffs and synergies of the socio-economic and ecological dimensions.     

Increasing agricultural productivity while reducing greenhouse gas emissions in sub‐Saharan Africa: myth or reality?

The motivation for this study stems from two major concerns that are interlinked. The first is the decades long food insecurity crisis faced by sub‐Saharan African (SSA) countries which is still prevalent. The second is the negative impact greenhouse gas (GHG) emissions from agriculture may have on future food production and which is likely to worsen the food insecurity problem. The conundrum SSA farmers face is how to increase food output through productivity growth while minimizing GHG emissions. To measure changes in productivity growth and GHG emissions, this study evaluates the agricultural performance of 18 SSA countries by utilizing the Malmquist–Luenberger index to incorporate good and bad outputs for the years 1980–2012. The empirical evidence demonstrates that productivity is overestimated when bad outputs are not considered in the production model. The analysis provides a better understanding of the effectiveness of previous mitigation methods and which informs an appropriate course of action needed to achieve the twin objectives of increasing agriculture productivity while reducing GHG emissions.     

Spatial dependence in agricultural land prices: does it exist?

Trade-offs arise between spatial dependence and choice of functional form in agricultural land price hedonic models. We discuss these trade-offs and how they can create spurious spatial dependence. Using a land sales dataset with apparent spatial dependence, we implement a semiparametric approach avoiding potential problems with the functional form. The results show that in addition to being nonlinear, the impacts are also characterized by significance thresholds that are difficult to capture in a parametric model. More importantly, we fail to detect any spatial dependence demonstrating that inappropriate functional form can indeed be responsible for finding spatial dependence in hedonic models.     

Agricultural Economics and Rural Development: Marriage or Divorce? Presidential Address

Rural development is a growing field of interest, both in policy and conceptual terms. However, it is sometimes loosely defined, and statistical information is therefore often confusing. This paper attempts to clarify some of the concepts involved, and then to explore the relationship between the study of rural development and that of agricultural economics. It is argued that much would be gained by a clearer separation between the economics of land, covering its environmental aspects as well as food production, and that of the rural population and economy. Links between the two certainly exist, but are better recognised individually, by analysts and policymakers alike.     

How sensitive is U.S. agricultural trade to the bilateral exchange rate? Evidence from bulk,intermediate, and consumer‐oriented products

This article examines the dynamic effects of changes in bilateral exchange rates on changes in bilateral trade of bulk, intermediate, and consumer‐oriented agricultural products between the United States and its 10 major trading partners. We find that, for consumer‐oriented products, U.S. exports are highly sensitive to bilateral exchange rates in both the short and long run, while U.S. imports are mostly responsive only in the short run. For bulk products, on the other hand, U.S. exports and imports are relatively insensitive to exchange rate changes in both the short and long run. For intermediate products, exports and imports are responsive to exchange rate changes in the short run, but not in the long run. It is also found that income of the United States and its trading partners has a significant effect on U.S. exports and imports of the three types of agricultural products in both the short and long run.     

How would global trade liberalization affect rural and regional incomes in Australia?

Agricultural protection in rich countries, which had depressed Australian farm incomes via its impact on Australia’s terms of trade, has diminished over the past two decades. So too has agricultural export taxation in poor countries, which has had the opposite impact on those terms of trade. Meanwhile, however, import protection for developing country farmers has been steadily growing. To what extent are Australian farmers and rural regions still adversely affected by farm and non‐farm price‐ and trade‐distortive policies abroad? This paper draws on new estimates of the current extent of those domestic and foreign distortions: first, to model their net impact on Australia’s terms of trade (using the World Bank’s Linkage model of the global economy); and second, to model the effects of that terms of trade impact on output and real incomes in rural versus urban and other regions and households within Australia as of 2004 (using Monash’s multi‐regional TERM model of the Australian economy).