The transmission of world maize price to South African maize market: a threshold cointegration approach

This article seeks to provide an explanation for the relationship between domestic maize price in South Africa and world maize prices in order to evaluate comovement and transmission of world prices to domestic prices in sub‐Sahara African countries. This is done by comparing nested and nonnested models that capture different forms of nonlinearity in the price spread. Adopting a Bayesian approach that allows for comparison of models using Bayes factor, we found that the relationship between South African price and world price for maize indicates the presence of nonlinearity in price transmission with three regimes that is triggered by the price spread in previous period.     

Evaluating alternative price expectation models for multiproduct supply analysis

Neoclassical economic theory provides an important conceptual framework for the analysis of agricultural production. Theory provides little guidance, however, in the actual specification of empirical models. This paper applies an integrated approach for choosing between price expectation mechanisms in a multiple-equation model when the alternatives are non-nested. Nine alternative specifications of market price and policy information are developed. Price forecasting accuracy, non-nested tests of hypotheses, and out-of-sample predictive accuracy are examined for agricultural production in Iowa. The results call into question the reliability of using forecasting accuracy as the sole guide to selecting a price expectation proxy.     

Cross country maize market linkages in Africa: integration and price transmission across local and global markets

In order to study short‐run price shock propagation, we model twenty seven Sub‐Saharan Africa (SSA) domestic maize markets within a Global Vector Autoregression framework. The main purpose is to fully embed multilateral trade flows as a way to better structure local price transmission dynamics and interdependencies, and get a more comprehensive picture of food price shocks propagation. We found significant between‐country market contagion and prompt regional price shock propagation when trade connection exists. Yet, the integration of SSA domestic maize markets within the continent and with global markets remains generally weak. Furthermore, under regular market conditions, most local price series appear to be more responsive to regional neighbors than to global shocks.     

Spatial price efficiency in Mozambique's post-reform maize markets

Maize (Zea mays) shortages and maize price instability continue to occur in Mozambique in spite of policy reforms and great capacity for increased production in northern Mozambique. This study measured the efficiency of spatial maize price arbitrage in Mozambique's post‐reform period. Spatial price inefficiency does not seem to explain why food shortages continue to occur in Mozambique, suggesting nonprice market constraints such as poor infrastructure and poor market institutions as more likely explanations. Baulch's spatial efficiency test indicated that it is not profitable to ship maize from northern surplus maize regions to southern Mozambique. Records of interregional maize shipments show that indeed grain is not being shipped from the north to the south. Market liberalization may have improved spatial price efficiency, but high transfer costs still limit trade and potential benefits from freeing markets. Under these circumstances, food shortages and price instability are likely to continue.     

2007年四川粮食市场价格走势预测

2006年,由于受粮食供求总量偏紧、粮食市场流通不畅及国际市场粮价攀升等因素的影响,市场粮油价格在去年11月中旬后出现了较大幅度的上涨,并缓慢延升到今年.     

Rainfall or price variability: what determines rangeland management decisions? A simulation-optimization approach to South African savannas

Savannas cover the greater part of Africa and Australia and almost half of South America and contribute to the livelihoods of more than 350 million people. With the intensification of land use during the second half of the 20th century, savannas have become increasingly degraded through bush encroachment as a consequence of increased grazing pressure. Research on rangeland dynamics, however, provides contradicting answers with regard to the causes and possible remedies of bush encroachment. In this article we present results from an application of a simulation-optimization model to the case of extensive rangeland management in South Africa. Our model differs from previous approaches in that it explicitly accounts for the influence of stochastic prices and rainfall on economically optimal management decisions. By showing the implications of neglecting price variation and stochasticity in rangeland models we provide new insights with regard to the determinants of bush encroachment and rangeland managers' economic return. We demonstrate that, in the case of South Africa, optimal rangeland management is likely to lead to bush encroachment that eventually makes livestock holding unprofitable. Yet, we identify the costs of fire management to be a limiting factor for managers to counteract bush encroachment and explore the impact of policy measures to reduce fire control costs on the ecological and economic sustainability of livestock holding.     

Marketing margins and price transmission on the Hungarian beef market

There is a wealth of literature on farm-retail price spread for different commodities and countries. However, research on price transmission and marketing margins in the transition economies is still limited. The paper analyses two specific aspects of transition: the larger probability of asymmetric price transmission and structural changes in the case of Hungarian beef chain. The article identifies the date of structural break applying the Gregory and Hansen procedure with recursively estimated breakpoints and ADF statistics. Exogeneity tests reveal the causality runs from producer to retail prices. Homogeneity is rejected, suggesting a mark-up pricing strategy. Price transmission analysis suggests that, despite the common belief, price transmission on the Hungarian beef meat market is symmetric on both long and short run.     

Black Economic Empowerment in the South African Wine Industry

KWV has been at the centre of the South African Wine Industry since 1918. In July 2004, KWV agreed that a broadly based Black Economic Empowerment (BEE) consortium would acquire 25.1 per cent of the shares of the KWV Group. The South African Wine Industry Trust, whose trustees are nominated by the Minister of Agriculture and Land Affairs and by KWV, facilitated the deal. The agreement has features specific to the wine industry; it is also a milestone and a precedent for black economic empowerment in agriculture. This paper situates the politics of black economic empowerment in the context of the legacies inherited by the wine industry. It examines the complex political processes by which the participants mobilized funds and negotiated decisions to reconcile their objectives and realize their goals. By examining carefully the details of the sequences of events, the paper sheds light on the peculiar features of this case and raises questions about the nature, implications and significance of black economic empowerment in South Africa.     

The effects of the Food Reserve Agency on maize market prices in Zambia

Over the last decade, governments throughout eastern and southern Africa have increasingly used strategic reserves and/or marketing boards to influence grain market outcomes, yet little is known about how these activities are affecting grain markets. This article estimates the effects of the Food Reserve Agency (FRA) on maize market prices in production and consumption regions in Zambia using a vector autoregression model and monthly data from July 1996 through December 2008. In recent years, FRA has become the dominant buyer of smallholder maize in Zambia. Simulations show that FRA activities stabilized market prices throughout the July 1996–December 2008 study period and raised mean prices between July 2003 and December 2008 by 17–19%. The price raising effects of FRA policies have assisted surplus maize producers but adversely affected net buyers of maize in Zambia, namely urban consumers and the majority of the rural poor. The increase in maize price stability is unlikely to have had substantial welfare effects on poor households. In contrast, relatively wealthy producers are likely to have benefited from the higher average and more stable maize prices resulting from FRA policies.     

Labour-Related Structural Trends in South African Maize Production

The substitution of capital goods, including new technology, for land and labour has played an important role and has influenced the structure of Sout African agriculture. Farm labour-related trends in the summer rainfall grain-producing area of South Africa are considered. The amount of labour used, the remuneration of labour, the substitution of capital for labour and productivity trends are analyzed. Growth rates were obtained by fitting exponential functions with time as independent variable. The decline in the number of farm employees per 1000 hectares under cultivation since 1970 probably resulted from mechanization and thus capital-labour substitution in maize production, especially in harvesting. Tax concessions on new capital improvements, the subsidization of agriculture in general and the increasing rate of urbanization contributed to this trend. The scarcity of capital relative to unskilled labour, which has been reinforced by policy measures favouring capital intensity (capital formation has increased by 4.0% per annum between 1950 and 1980, compared with an increase of 0.71% per annum in the number of farm employees in the same period); this implies that corrective policy changes are required to improve the present distorted situation. This will enable the commercial agricultural sector of South Africa to play a more meaningful role in the socio-economic development of the whole subcontinent.     

Transnational links in rhino poaching and the black‐market price of rhino horns

Rhino poaching in South Africa and India's major range states have been remarkably similar over time. Organised criminal syndicates manage an illegal supply chain of rhino horns from poachers, middlemen and corrupt authorities to East Asian black‐markets. In this paper, we use rhino poaching data from South Africa and India to examine the plausibility of transnational links and coordination in their supplies of rhino horns. We develop an innovative model of oligopolistic collusion in supply and find empirical evidence to support the theory, while controlling for rhino horn demand features, corruption, governance quality, and conservation policy. Furthermore, we propose an inventory management model of a criminal syndicate that controls the horn supply chain. The method retraces and forecasts black‐market prices and has potential applicability in estimating supply or demand elasticities. This paper is the first to suggest an oligopolistic feature of the poaching industry. It highlights the need to reorient conservation policy to account for possible coordination of rhino horn supplies between range states.     

Measuring the impact of road rehabilitation on spatial market efficiency in maize markets in Mozambique

This article analyzes the impact of road rehabilitation on the spatial market efficiency of maize markets in Mozambique. We estimate a modified version of the Parity Bounds Model (PBM) that allows us to test the impact of road rehabilitation on spatial efficiency. This article seeks to contribute to the existing literature in three ways. First, a unique data set, where road rehabilitation episodes between market pairs are identified, is developed. Second, special care is devoted to estimation of transaction costs due to the sensitivity of the PBM model to the quality of transaction costs estimates. Finally, as opposed to most existing literature that focuses on relatively distant markets, the article focuses on spatially closed markets. We find that maize markets tend to be segmented due to high transport costs. Following road rehabilitation, inefficiency and average absolute price differentials tend to decrease, and market pairs have tended to shift toward autarky regimes. Overall, while the results point broadly toward a positive impact of road rehabilitation on spatial efficiency, they are not as strong or as robust as one would like. Large increases in fuel prices likely offset the positive impacts of road rehabilitation on transaction costs, contributing to the increase in the probability of being in an autarky regime.     

Impacts of agricultural price support policy on price variability and welfare: Evidence from China's soybean market

China is a predominant soybean importer; thus, its domestic soybean policies have a large impact on world soybean market dynamics. We develop the first aggregate structural econometric model of China's soybean market and link it to the rest of the world (ROW), which allows us to analyze the impacts of China's soybean price support policy that ran from 2008 to 2013. We investigate the impacts of China's policy on the variability of their domestic and world soybean prices, and adopt a Monte Carlo simulation to evaluate the effects on distributional and aggregate welfare. Our results indicate: (a) after China's soybean price support policy, price transmission elasticity decreases, China's domestic price variability decreases, and world price variability increases; (b) China's producer surplus increases, consumer surplus decreases and the net welfare change in their domestic market is negative; and (c) although soybean exporting countries in the ROW experience significant welfare gains, the world net welfare change is negative.     

The effects of NCPB marketing policies on maize market prices in Kenya

The Government of Kenya pursues maize marketing policy objectives through the National Cereals and Produce Board (NCPB), which procures and sells maize at administratively determined prices, and stores maize as a contingency against future shortages. A private sector marketing channel competes with the NCPB. This article estimates the effects of NCPB activities on the historical path of private sector prices in Kenyan maize markets between 1989 and 2004. The analysis is carried out using a reduced form vector autoregression model (VAR) estimated with sparse data and imposing only minimal identification restrictions. Results show that NCPB activities have stabilized maize market prices in Kenya, reduced price levels in the early 1990s, and raised average price levels by roughly 20% between 1995 and 2004. Over the past decade, the price-raising activities of the NCPB have transferred income from urban consumers and a majority of small-scale farm households that are net buyers of maize to a relatively small number of large- and small-scale farmers who are sellers of maize.     

Water markets in Australia: an experimental analysis of alternative market mechanisms

Formal water markets in Australia began as uniform price open call markets. As water markets in Australia continue to expand and mature, water managers are introducing double auction water markets, believing that such markets will produce more efficient outcomes. It is therefore timely and policy relevant to explore the relative merits of the two auction mechanisms in context. To date, experimental comparisons of these auction mechanisms have been based on balanced, single unit designs with defined buyers and sellers. However, many resource markets involve trade in multiple unit, often thin, double auction markets. This paper questions whether a multiple unit double auction performs as well as the more traditional open multiple unit call auction in a series of thin water market experiments.     

Nontraded food commodity spatial price transmission: evidence from the Niger millet market

Using an Augmented Factor Vector Autoregressive (FAVAR) Model, this study analyzes spatial millet prices transmission in Niger. Our results did not find condition for millet markets integration existence. However, the Granger causality tests and impulse response functions from the estimated short‐term dynamic as FAVAR model revealed the existence of leading markets whose millet prices affect a maximum number of other regional millet prices, while some regions seem to be isolated from trade or information flows. Furthermore, the significance of a shock depends also on the characteristics of the region where it originates in terms of millet demand or supply, indicating that the region to target and where the price shock originated matter for the policies’ success.