Auction winning,social dynamics and non-compliance in a payment for ecosystem services scheme in Indonesia

Conservation auctions for payment for ecosystem services (PES) are useful to identify the levels of incentives that will cover the opportunity costs of farmers supplying ecosystem services. Although auctions are increasingly used for allocation in PES schemes, the factors that lead to their successful implementation and eventual environmental outcomes are poorly understood in developing countries. We investigated the socio-economic and institutional contexts that led to smallholders' auction winning and eventual compliance using linear mixed-effects models, and post-auction and post-contract surveys. We employed a case study of a conservation contract preceded by a sealed-bid, multiple round, uniform price auction for watershed services from coffee farmers in Lampung, Indonesia. The auction participants presented low education levels, low asset endowments and small plot sizes. The study obtained evidence that farmers with larger plot areas were more likely to win the contracts, suggesting economies of scale. Most farmers considered the auction a fair self-selection mechanism to allocate contracts where allocation was not influenced by power or social rank. Non-compliance was associated with labor availability constraints, short duration of land ownership and existence of previous conservation applications, suggesting lax of capability to invest in applying conservation agriculture. Final bids were however not good predictors of compliance, among other factors, calling into question the potential of auctions to elicit the actual incentive from the farmers. Ensuring that farmers understand the purposes of auctions for effective contract allocation beyond a mere game and identifying farmers that might encounter difficulties fulfilling the contract could increase the likelihood that such a PES scheme would be successful.     

ECONOMIC ISSUES FROM THE BROADS GRAZING MARSHES CONSERVATION SCHEME

The paper examines two key issues relating to the use of fixed-price conservational contracts of the type embodied in the new Environmentally Sensitive Area policy in the UK. It uses data for the Broads Grazing Marshes Conservation Scheme (BGMCS). The budgetary costs of the fixed-price contract are compared to those of (i) public purchase of land with leaseback for grazing, and (ii) of individual management agreements. Using a net present value criterion, public purchase emerges as the cheapest option, and management agreements as a superior option in defined circumstances. The paper also explores equity and efficiency issues arising from fixed price contracts. It is concluded that for many farmers and landlords in the BGMCS the fixed payment exceeded what was necessary to achieve the conservational objectives, while at the same time it was less than the profit foregone by farmers who might possibly have switched to arable farming.     

Private and state-led contract farming in Zimbabwe: Accumulation,social differentiation and rural politics

Contract farming schemes often amplify existing patterns of socio-economic differentiation. In Zimbabwe, processes of differentiation were underway before the current expansion of contract farming and they have deepened through the Fast Track Land Reform process. This article examines how pre-existing dynamics of differentiation shape the forms of contract farming adopted, as well as which groups of farmers gain access and on what terms. Social differentiation partly explains the outcomes of contract farming, even if contract farming in turn results in further differentiation. This article contrasts private sector-led contract farming of tobacco and state-led financing of maize production (the ‘command agriculture’ programme) in two high-potential sites and across different forms of land use. Unlike in many other settings, contract farming in Zimbabwe is highly influenced by the state, through the regulation of private sector arrangements and the establishment of a state-led contracting programme. The state-led programme boosted maize production amongst medium-scale farmers and resulted in an embedding of patronage relations. Meanwhile, the private-led contract farming has supported a widespread boom of tobacco production, mainly amongst smallholders. We find therefore that contract farming is highly dependent on the contingent, politically mediated processes of social differentiation.     

农户向家庭农场流转土地的续约意愿及影响因素研究

当前,农地流转期限普遍较短、流转合同不规范、合同违约率高等问题导致家庭农场土地经营权不稳定,严重抑制了家庭农场主对流入土地的长期投入。因此,如何引导农户向家庭农场长期稳定地流转土地,成为推动家庭农场可持续发展的关键所在。本文基于湖南省498家农户土地流转数据,运用计划行为理论和结构方程模型分析了农户向家庭农场流转土地的续约意愿及其影响因素。研究结果表明:①在农户向家庭农场流转土地的续约意愿模型中,行为态度是主要影响因素,主观行为规范和知觉行为控制也是重要影响因素;②在农户行为态度方面,农户对土地流转预期收益越有信心,或农户对家庭农场上一轮土地流转行为越满意,在此基础上构建起的行为态度越能促进农户土地流转续约意愿的形成;③在主观行为规范方面,当农户感知到来自周围的人特别是亲人对农户续约的支持态度越强烈,在此基础上构建的主观行为规范越能促进农户土地流转续约意愿的形成;④在知觉行为控制方面,农户对农户禀赋和环境禀赋两方面的感知会影响农户土地流转续约意愿的形成,其中户主工作性质和上一轮流转期限影响最大。     

The role of behavioural factors and opportunity costs in farmers' participation in voluntary agri-environmental schemes: A systematic review

Agri-environmental schemes (AESs) are increasingly implemented to promote the adoption of environmentally friendly practices by farmers. We use a systematic review to explore the role of behavioural factors and opportunity costs in farmers' decisions to participate in AESs in Australia, Europe and North America. Behavioural factors influence how farmers value and perceive options, while opportunity costs relate to farmers' forgone utility when choosing to participate in schemes. We synthesise insights from 79 articles and over 700 factors explaining the participation in AESs. We find that a set of behavioural factors seem consistently connected to participation, including agricultural training, advice and having positive attitudes towards AESs. Moreover, several factors related to opportunity costs also have a rather consistent relationship with AES participation, including market conditions, implementation efforts, profitability, and management and contract flexibility. However, many relationships of behavioural factors and opportunity costs with AES participation are not as consistent and generalizable as sometimes portrayed and require context-specific interpretation. Those factors with mixed results can still provide insights into farmers' participation decisions as several of them are either ‘positively and insignificantly’ or ‘negatively and insignificantly’ related to participation, such as environmental attitude, trust and farm size. These results suggest that their relationship with AES participation depends on other factors or the setting, highlighting interactions and raising important new research questions. Overall, our results provide several entry points for both researchers and policy-makers, highlighting uncertainties in relationships between factors and participation that should be considered when designing policies.     

Land Heterogeneity,Agricultural Income Forgone and Environmental Benefit: An Assessment of Incentive Compatibility Problems in Environmental Stewardship Schemes

This paper examines the issue of incentive compatibility within environmental stewardship schemes, where incentive payments to farmers to provide environmental goods and services are based on foregone agricultural income. The particular focus of the paper is land heterogeneity, either of agricultural or environmental value, leading to divergence between the actual and socially optimal level of provision of environmental goods and services. Given land heterogeneity, such goods and services are likely to be systematically over‐ or under‐provided in response to a flat rate payment for income foregone.     

The Competitive Implications of Top-of-the-Market and Related Contract-Pricing Clauses

This article examines the competitive implications of contract pricing arrangements, which link the contract price to the subsequent cash price. We focus on so-called "top-of-the-market pricing" (TOMP) in cattle procurement. The TOMP clause is shown to have anticompetitive consequences when the same buyers who purchase contract cattle with the TOMP clause also compete to procure cattle in the subsequent spot market. The TOMP clause reduces packers' incentives to compete aggressively in the spot market. Although TOMP pricing is not in producers' collective interest, rational sellers may nonetheless sign these contracts with little or no financial inducement.     

Compliance Monitoring and Agri-Environmental Policy

This paper examines the issue of compliance monitoring in agri-environmental policy when a farmer is risk-neutral and risk-averse. The optimal contract model presented here significantly extends and generalises the results and conclusions of Choe and Fraser (1998). In this paper the environmental agency explicitly chooses monitoring accuracy and monitoring costs as well as rewards for farmers. It is found that, by modelling the environmental agency as being cost-conscious optimal monitoring accuracy may or may not be higher for a risk-averse farmer than for a risk-neutral farmer. Essentially, the environmental agency faces an explicit trade-off between monitoring costs and incentive payments as a means to ensure the desired behaviour from the farmer. The importance of the results derived are discussed in the context of agri-environmental policy design and implementation     

Farmland tenure and transaction costs: Public and collectively owned land vs conventional coordination mechanisms in France

To preserve farmland in industrialized countries, public initiatives or initiatives from nongovernmental organizations increasingly rely on Long-term and Full Rights Acquisitions of land (LFRAs). The objective of this article is to help assess whether those actions provide profitable access to land use for lessee farms. We compare the economic implications for farms of this mode of access to land use with the two other main modes: conventional lease arrangements and purchasing transactions. The analysis focuses on the transaction costs relative to the cost of exchange, that is, including purchase/rental price, and to the financial benefits of the transaction. We use original data on costs provided by a survey of farmers within a French region. Our results suggest that the ex ante transaction costs incurred by farmers involved in LFRAs, as a percentage of the exchange cost of accessing land use, are lower than those in purchasing transactions and higher than those in conventional lease arrangements. The difference between the two types of lease arrangements is due to negotiation costs, which are doubled in LFRAs. In conclusion, making the involvement of tenant farmers in the construction of LFRAs more effective would allow these initiatives to better achieve their goals.     

Socio-Technical Scenarios as a Tool to Improve Farm Advisory Services

This article examines the use of the socio-technical scenarios (STSc) method to explore the future needs of farmers in the adoption of more sustainable farming practices. It also examines the changes needed for advisory services to meet those identified needs. It presents the results from four STSc workshops organised as part of the H2020 AgriLink project. Workshop participants (farmers, advisors, policymakers, researchers), jointly explored future changes towards more sustainable agricultural systems paying special attention to the role of advisory services in these transitions. Despite the diversity of national contexts, common results emerged concerning both the shortcomings of the current advisory systems and directions for improvement. Participants agreed that advising on single aspects would not achieve the required systemic changes; these would require more integrated advisory systems at different levels (improved cooperation and knowledge flow), supported by more consistent policies. We indeed identified discrepancies between policy expectations and the broader innovation context. Policies should facilitate the role of advisors in supporting farmers to adopt sustainable innovations, but more often they also create barriers for such innovations. Participants’ concrete recommendations for more farmer-centered advisory services illustrate the usefulness of the STSc to explore potential solutions to key problems in contemporary farm advisory systems.     

Optimal Markup Decisions under Demand Uncertainty

This article examines the consistency with economic theory of a rule of thumb in which a risk-averse firm facing demand uncertaintly sets its price based on a percentage over the price paid to farmers. A testable set of comparative static results determines how the optimal markup is influenced by shifts in key parameters affecting the firm: expected demand, demand uncertainty and average variable costs. The model is tested using data from the wholesale markets for organic lettuce, broccoli and carrots. The results demonstrate that risk-averse wholesalers raise markups as expected demand increases and reduce them as uncertainty increases, consistent with risk-averse behavior. The empirical models show that produce marketing agents monitor shifts in expected demand and demand variability when adjusting markups. Expected demand has a greater impact on markups than demand variability.     

家庭农场与农户小规模农地对农业技术服务需求行为差异及影响因素

［目的］在农业的发展过程中,以集约化土地种植为主的新型经营主体将极大地促进农业的现代化发展,这是新型的农业经营主体追求效益的最大化的选择性行为,也是政府主导和扶持的新型农民的政策缩影。文章探讨现代农业发展的背景下不同种植规模经营主体对于农业技术服务的需求行为差异和影响因素。［方法］以新疆棉区的1 043户小规模种植农户和683户家庭农场主的调查数据为例,对以家庭农场（种植面积267hm2及以上）为例的新型农业经营主体与传统农户小规模农地对农业技术服务需求行为运用二元Logistic模型进行实证分析。［结果］(1)家庭耕地面积是影响家庭农场对农业技术服务需求行为的主要因素; 而文化程度、是否参加农业合作社、村里是否有农业合作社是家庭农场对农业技术服务需求行为的影响程度最大的。(2)而参加农业技术培训次数是影响农户小规模农地对农业技术服务需求行为的主要因素; 是否参加农业技术培训是农户小规模农地对农业技术服务需求行为的影响程度最大的。［结论］（1）农业技术服供给机构应根据农户经营种植的耕地面积,对用户进行分类管理。（2）农业技术服务机构应协同基层部门加大对农业技术服务的宣传力度,全面提升种植农户的认知程度。（3）培育新型农业经营主体,为农业技术服务培育不同规模需求的优良农户。     

TAXES,INVESTMENT INCENTIVES AND THE COST OF AGRICULTURAL INPUTS

This paper examines the effects of taxes and investment incentives on relative capital/labour costs on farms of different sizes. Income tax relief reduces the cost of purchased non-capital inputs to farmers, while investment incentives reduce the cost of capital items. A framework is developed for calculating the relative magnitudes of these effects and it is shown that capital costs have been reduced relative to labour costs throughout the post-war period in the U.K. and on large farms (paying a higher tax rate) more than on small farms.     

MEASURING MANAGEMENT PERFORMANCE OF DAIRY FARMERS

Increased emphasis has centered on methods to measure and predict managerial performance of farmers. In doing this, one of the foremost problems is the development of a reliable and valid criterion variable, because of a number of characteristics of farming and the farm-family complex.
This article discusses problems in developing a criterion of management performance and examines the use of rating techniques for this purpose. Two rating techniques are used to measure management performance on Missouri dairy farms. The results, while suggesting major differences both in the criterion of managerial performance used by different people and in the ratings, identify sources of the differences and opportunities to improve the measuring of management performance.     

Collaborative governance arrangements to deliver spatially coordinated agri-environmental management

Several studies show that agri-environment schemes (AES) are likely to be more effective if they are designed at the landscape scale. However, this requires spatial coordination of environmental management across multiple farm holdings and collaboration among governmental and other actors, including, possibly, groups of farmers. In this study we analyse alternative approaches to spatial coordination and collaboration. Through case studies from five EU member states in North West Europe we analysed collaborative governance arrangements, from the perspective of the distribution of governance tasks among collaborating actors and changes to these over time. Of these governance tasks, spatial coordination had our particular interest. The collaborative governance arrangements were shaped in various ways. In four out of five case studies a group of farmers had become involved in the performance of more governance tasks over time. In all cases a professional(ized) organisation (governmental organisation or a group of farmers) was responsible for spatial coordination, possibly due to the complexities inherent to a landscape approach. In relation to the change of schemes over time, we argue that adaptive collaborative governance, incorporating learning, monitoring and evaluation in the governance arrangements, is key to effective agri- environmental management.     

生猪养殖户从众行为存在性及形成机制研究以四川省1 127家养殖户仔猪补栏为例

[目的]多数养殖户在经营管理上往往注重短期利益,对生猪市场变化的反映是趋同的,容易在价格上涨时"一哄而上",在价格下跌时"一哄而下",这种从众行为对生猪供给造成了巨大冲击,不利于生猪生产和猪肉供给的稳定。[方法]文章以四川省12个生猪调出大县1 127个生猪养殖户为调查对象,运用二元Logistic回归法,构建了从众行为的检验模型,研究了养殖户仔猪补栏中的从众行为及其形成机制。[结果](1)养殖户仔猪补栏中存在明显的从众行为,即养殖户仔猪补栏决策明显受到其他生猪养殖者生产行为的影响;(2)从众行为服从逻辑追随律和先内后外律。当其他生猪养殖者生产效益越好时,养殖户仔猪补栏的从众行为越明显;生产规模相同的养殖户之间从众行为亦更为明显;(3)信息获取性从众和投机性从众是引起从众行为形成的内在原因;(4)生产规模及养殖技术对从众行为存在重要影响。[结论]厘清了养殖户生产中出现"一哄而上,一哄而下"群体性行为的原因,为理解生猪养殖者从众行为及生猪价格形成机制提供新的视角,丰富了农户行为及农产品价格形成机制的研究成果。     

What kind of labour regime is contract farming? Contracting and sharecropping in Java compared

This article compares contract farming with share tenancy, another labour regime in which smallholder farmers are bound by contract to deliver produce to another, usually more powerful party. Based on research in the Javanese village of Kaliloro, we explore contracting and sharecropping as labour regimes, each with their own specific mechanisms of surplus transfer from producers to non-producers. The cases compared are sharecropping of irrigated rice, contract farming of watermelon, and contract farming of poultry. There are important differences in how labour inputs are organized, how decisions are made, how costs are divided between landowner/contractor and farmer, and in the mechanisms of surplus transfer between the contracting parties. Exploring these differences allows us to understand and compare the role of the two labour regimes in the penetration of capital into the rural economy. Neither contract farming nor share tenancy are in themselves “win-win” or “win-lose” relationships, good or bad for small-scale cultivators. The actual balance of burdens and benefits—often contravening the provisions of written contracts or state regulation—is determined by power relations between the contracting parties.     

Microeconometric analysis of wine grape supply contracts in Australia*

This paper examines wine grape supply contracts used in the main grape growing regions of Australia. An empirical analysis provides insight into specific aspects of contract design and implementation. Statistical analyses of sample data reveal differences between regions in contract specifications. Lower quality grape growing regions place a greater reliance on grape quality assessment to determine bonus/penalty payments compared to higher quality regions. Contracts in higher quality regions place greater emphasis on explicit winery involvement and direction in vineyard management. Results indicate that longer duration contracts are more inclusive in terms of the number of clauses included. Evidence of risk shifting (i.e., winery to grower) for high quality grapes is reported, where the price received by growers is determined by the bottle price of the wine produced.     

Short supply chain participation and market performance for vegetable farmers in China

The fresh food supply chain in China has begun to reduce the number of intermediaries that connect producers and consumers. Using farm‐level data, this paper investigates the impacts of short supply chain participation on vegetable farmers’ market performance, including profits, productivity, production cost, price and price risk. The results show that the participation in a short supply chain is a profit‐maximising strategy and risk management tool for farmers. The increase in profit is attributed to productivity advantages, farm size expansion, and risk reduction rather than because of price premiums or cost savings. A policy implication is that short supply chain promotion has many benefits, but the government should be more concerned about the sustainability of short supply chains.     

Compliance with International Food Safety Standards in Kenya's Green Bean Industry: Comparison of a Small- and a Large-scale Farm Producing for Export

European food safety standards have increased the fixed and transactions costs of Kenyan green bean farmers while requiring more stringent quality monitoring by exporting firms. This paired case study finds that large farms use owner equity to invest in improved facilities. Small farms attain scale economies by joining a marketing group that spreads facility investment costs and reduces the transaction cost to buyers of monitoring small farm performance. Green bean buyers meet the asymmetric information problem by close monitoring, the threat of contract termination, and variable product pricing to induce compliance with the standards.