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.     

Formal school or Koranic school? Determinants of school type choice in Senegal

This paper uses data from a novel household survey from the northernmost region of Senegal, Saint-Louis, in order to jointly analyse enrolment in formal and Koranic schools. The data-set includes detailed information on the education and current enrolment status of all household members. In the sample, 20% of children aged 6–14 are not enrolled in any type of school, while the majority (43%) are enrolled in both a formal and a Koranic school. Multinomial logit techniques are employed to jointly analyse enrolment in formal and Koranic schools. Specifically, these models allow for the possibility that a child combines formal and Koranic schooling. Results indicate that younger children and boys seem to favour Koranic schools, while older children and girls are more likely to attend a formal school. These results contribute towards explaining gender equality in Senegalese primary education that stands in sharp contrast to a general disadvantage of girls in other West African countries.     

Welfare impacts of climate-smart agriculture in Ghana: Does row planting and drought-tolerant maize varieties matter?

This study provides new evidence of the impact of climate-smart agriculture (CSA) – row planting and drought-tolerant maize varieties - on farm and welfare outcomes by estimating a multinomial endogenous switching regression model that corrects for selection bias and farmer heterogeneity in CSA choice. Application of our model to panel observations of 438 households in Ghana show that adoption of CSA increases both yield and intensity of maize commercialization but negatively affect own consumption. Specifically, the magnitude of the impact is relatively higher for adopters of row planting relative to adopters of drought-tolerant maize seeds. These results suggest the need for development practitioners to increase awareness and emphasize the importance of row planting as a key component of climate-smart agriculture.     

Are maize marketers averse to quality loss in supplies? A case study from Ghana

To ensure sustainable post‐harvest loss reduction, markets that are averse to quality loss and provide incentives for farmers to supply high quality produce are crucial. Such markets will be averse to quality loss, offering distinct prices and substantial rewards to farmers for the supply of quality produce. Farmers in sub‐Saharan Africa (SSA), where informal markets exist, have often assessed the rewards for the supply of quality produce as inadequate. Hence, this study investigates if intermediary buyers are actually indifferent to quality loss in supplies based on two scenarios—the informal market scenario and a hypothesized grade scenario. The analysis builds on survey data from marketers in two informal maize markets in Ghana. For the hypothesized grade scenario, random effect regression was used to examine the influence of marketer‐specific characteristics on premiums offered to farmers over different quality levels. The findings suggest that although informal markets seem not to adequately value loss reduction, investing in institutional infrastructures, such as grades and standards can change this. Furthermore, interaction among marketers and association participation positively influences the value marketers place on quality loss reduction. The result highlights the importance of standard grading systems and collaborating with market groups in minimizing quality loss.     

Cashing in or driving development? Cross-border traders and maize contract farming in northeast Laos

Contract farming is receiving renewed attention in research and policy in the Mekong region of Southeast Asia, as countries continue to undergo varied agrarian transitions and agri-food production has become increasingly regionalized. In northeast Laos, previously isolated upland communities have experienced rapid transformations resulting from contract production of hybrid maize, mainly for industrial feed processing and livestock in Vietnam. Based on extensive qualitative fieldwork in the Lao-Vietnamese borderlands, this article explores the quasi-“developmental” functions assumed by cross-border traders, in the context of unfulfilled rural policy objectives, in which these “micro-investors” provide informal extension and infrastructure to enable agricultural commercialization. The article examines the extent to which this dynamic is adequately captured by notions of patronage, or whether subtle mutual dependencies are at work, as livelihoods are rebalanced between subsistence and commodity crops in remote border landscapes.     

Rice productivity in Bangladesh: What are the benefits of irrigation?

Green Revolution technologies transformed Bangladesh’s agricultural system through the introduction of high-yielding rice and wheat varieties, chemical fertilizers and pesticides, and the expansion of tubewell-irrigated area, enabling crop production during the dry season. However, serious challenges continue to plague the agriculture sector, including scarcity of land due to high population density, unbalanced use of fertilizers and pesticides, and great variation in water supply across seasons – from drought to stagnant flood conditions. Further expansion of irrigated area – including through the continued development and improvement of surface water systems – is being eyed by Bangladesh’s Ministry of Agriculture to address many of the remaining challenges facing the country. However, such expansion is not without risks or consequences, and a careful analysis of who benefits from irrigation, and how, must guide development priorities.We examine plot-level data for rice production during Bangladesh’s three rice seasons – aus, boro, and aman – across a nationally-representative household survey in Bangladesh. While rainfall is the most important determinant of rice yield during aus and chemical inputs are most important during aman, access to irrigation has the greatest influence on boro rice yield during the dry season, particularly for the coastal south. The government of Bangladesh is planning massive investments in the southern region for the improved provision of surface water irrigation. The expected decline in groundwater, coupled with our econometric findings, suggests that expanding boro production in the south may not be a good strategy to promote, for the region. Whether brackish shrimp aquaculture can provide an equitable and sustainable livelihood alternative should continue to be a focus of research.     

Do subsidies cause a less competitive milk market in China?

After 2008, China dairy industry has experienced a consolidation supported by the government mainly for the reason of food safety. Subsidies are one of the tools to shape a concentrated market with goals of reducing regulation cost and accomplishing quality control. This gives a serious concern that subsidies would generate a less competitive dairy industry. We construct a parametric model and use the firm‐level panel data, specifically the top eight dairy firms, to test if government subsidies strengthen the market power in the dairy industry. Our empirical results indicate government subsidies have a negative impact on the Lerner index for the top privately owned firms, but no significant effect on state‐controlled ones after controlling for advertising, time trend, and proprietorship. It is possible that the subsidies give more room for private firms to increase the scale or suppress the price, which eventually reduces the market power and benefits dairy customers in the downstream.     

Is there a slowdown in agricultural productivity growth in South America?

This article estimates agricultural productivity growth in 10 South American countries in 1969–2009 with the objective of investigating if the slowdown being measured in other countries is present in the region. Results show that productivity growth accounts for half of the three‐fold increase in agricultural output during this period and that performance is sensitive to R&D investments in the sector. The slowdown found for the 1990s to 2000s in the U.S. and some European economies does not seem to be present yet in South America. The region's total factor productivity (TFP) growth rate increased steadily from 1.07% during the 1970s to 2.29% during the 2000s. Given lags in adoption and the adaptive nature of innovations in these economies, we have yet to see the potential effects in South American agriculture of decreases in R&D in advanced economies.     

Is late really better than never? The farmer welfare effects of pineapple adoption in Ghana

Export agriculture offers potentially high returns to smallholder farmers in developing countries, but also carries substantial market risk. In this article we examine the intertemporal welfare impact of the timing of a farmer's entry into the export pineapple market in southern Ghana. We examine whether farmers who never cultivated pineapple are better or worse off than farmers who decided to adopt pineapple earlier or later relative to their peers and experienced a significant adverse market shock several years prior to our endline survey. We use a two‐stage least squares model to estimate the causal effect of duration of pineapple farming on farmer welfare. Consistent with economic theory, we find that earlier adoption of the new crop brings greater welfare gains than does later uptake. But we find that the gains to later uptake of pineapple—just before the market shock—are small in magnitude, just 0.1 standard deviations of a comprehensive asset index, indicating that the gains to adoption may be precarious and depend on the context, in particular on the severity of prospective market shocks.     

Do fertilizer subsidies crowd out organic manures? The case of Malawi

We assess the impacts of the Malawian Farm Input Subsidy Program on manure use at the farm plot level using more than 3,000 farm plot observations from six districts in central and southern Malawi over three years (2006, 2007, and 2009). The probabilities and intensities of manure use were investigated with the correlated random effects (CRE) probit and tobit models. The endogeneity of access to fertilizer subsidies and fertilizer use intensity was controlled for with a control function approach. Both the probability of manure use and intensity of manure use were positively correlated with the intensity of fertilizer use. A 1% increase in fertilizer use intensity is associated with a 1.94%–1.96% increase in the intensity of manure use outside the subsidy program and a 0.62%–1.66% increase in manure use with the subsidy program. A 1% increase in average fertilizer price was associated with a 0.43%–0.76% increase in the probability of manure use and a 3.5%–5.3% increase in the intensity of manure use.     

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.     

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.     

Is a slowdown in agricultural productivity growth contributing to the rise in commodity prices?

A slowdown in the rate of agricultural productivity growth is thought by many observers to be contributing to the recent rise in agricultural prices. In this article I decompose sources of output growth in global agriculture into aggregate input and total factor productivity (TFP) components and examine whether productivity growth slowed substantially in the years leading up to the recent rise in commodity prices. Contrary to widely held perceptions, I find no evidence of a general slowdown in sector‐wide agricultural TFP, at least through 2006. If anything, the growth rate in agricultural TFP accelerated in recent decades. However, the results do show a slowdown in the growth of agricultural investment. Accelerating TFP growth largely offset decelerating input growth to keep the real output of global agriculture growing at about 2% per year since the 1960s. Regionally, however, agricultural productivity performance has been uneven. These findings have important implications for the appropriate supply‐side policy response to the current agricultural price crisis.     

Farmers’ decisions to adapt to climate change under various property rights: A case study of maize farming in northern Benin (West Africa)

Making the assumption that property rights might determine whether farmers adopt particular strategies, this study aims at modelling farmers’ decisions to adapt to climate change by focusing on their property rights – declined as institutional arrangements on land and rights on land – as well as their socio-economic and demographic characteristics. The case study took place in northern Benin (West Africa). In this zone, 308 farmers producing maize and adapting to climate change were randomly sampled. The study was conducted by a survey method on respondents using structured interviews based on a questionnaire. A simultaneous modelling using a Multivariate Probit (MVP) model highlighted that socio-economic and demographic characteristics, institutional arrangements on land, and rights on land determine the farmers’ decisions to adapt to climate change. The land ownership has a positive effect on the decision to adopt any adaptation strategy. Subsequently, securing farmers’ property rights would help to enhance their capacity to adapt to climate change.     

The introduction of Entry Level Stewardship in England: Extension or dilution in agri-environment policy?

Agri-environment schemes were introduced in the mid-1980s. Their primary objectives have developed from initially aiming to hold back intensification towards stimulating environmental enhancement. The introduction of Entry Level Stewardship (ELS) in England represents a third stage in seeking to extend the coverage of schemes across the majority of agricultural land. This aims to influence land use along the whole of the intensive margin. The ELS offers a wide range of options for which farmers are awarded points. Selection of options equivalent to 30 points per ha in lowland areas entitles farmers to a payment of £30 per ha. By September 2007, 4.4 million ha had been entered into the scheme, equivalent to 47% of the agricultural area. From amongst the options on offer, 34% of points were for boundary options, 20% for intensive grass options, 16% for management plans and 13% for options taking arable land out of production. The choice of options varies across the country with a higher proportion of the agricultural area entered in the East. Entry into the scheme is associated with total agricultural area, cereals farming, larger farms, a lower proportion of area in Environmentally Sensitive Area and Countryside Stewardship schemes and grazing livestock numbers. While the ELS has introduced a large number of new entrants into agri-environment schemes, the extent of the environmental impact is uncertain. Given the large number of options available, it is likely that farmers will have chosen options that involve relatively little change and incur limited cost. At the same time, it would be surprising if the environmental gains were of the types most valued within local areas. The ELS approach implies that public goods provided from agricultural land should be paid for irrespective of what would have happened in the absence of the scheme. While this may be a fairer approach, it may also undermine the idea of land stewardship and imply that payments will continue to be required in the long term in order to sustain provision. The ELS does establish a framework within which incentives could be targeted to deliver specific benefits within particular contexts and suggestions are made as to how policy might be developed for this.     

Abandonment or survival? Understanding the future of Castanea sativa stands in function of local attitude (Northern Apennine,Italy)

In a chestnut belt in the northern Apennines (Italy), we interviewed current (n = 52) and potential growers from a younger generation (n = 57), to assess what factors are likely to drive their willingness to continue chestnut culture. In 35 cases, local appraisals of chestnut stand disturbances were also contrasted with expert assessments. More than half of current growers were confident about the future of chestnut cultivation. This proportion decreased with grower’s age and experienced issues, while slightly increased in presence of multifunctional management and support from family members. Although most growers resulted highly capable of diagnosing problems, expert advice significantly contributed to driving positive perceptions. About half of the younger interviewees also expressed interest in growing chestnut. This proportion was higher for respondents who are exposed to chestnut culture within the family, and who value cultural services above other ecosystem services (ES) of forests. Overall, passion for the activity and attachment to local heritage were the most influential motivation for both categories of respondents. We outline policy actions that may encourage the continuation of chestnut management and, more generally, conservation of cultural landscapes in mountain areas. Possible measures include financial incentives (e.g., payments for ES), tighter integration of traditional and expert knowledge in the production chain, and public recognition of the value of local heritage in land management. Broader support to maintaining services and infrastructure in rural areas, however, will also be a pre-condition.     

Forest or oil palm plantation? Interpretation of local responses to the oil palm promises in Kalimantan,Indonesia

Global land use/land cover change is dominated by the expansion of cash crops plantations, replacing natural ecosystems including forests. International trade is an important factor in this process. Increasing demand on certain crops has triggered plantation expansion and deforestation, and influence local land use in other countries (land teleconnections). Oil palm expansion is one of the most prominent examples of land teleconnections. In Indonesia, oil palm plantations area increased from 1.1 million ha in 1990 to 11.2 million ha in 2015. According to the Indonesian Law on Plantation, the indigenous people's decisions play important roles in land use decisions. This paper investigates what were the factors (drivers) determining the individual-level responses to the oil palm promises in West Kalimantan. These questions are not only important for the future of Kalimantan’s rainforest but will also enrich deforestation and conservation-development discourses. We selected 49 respondents for interviews and focus groups such that people who opposed and people who supported the conversion were both well represented. Much attention was paid to arrive at a balanced set of operational variables, such as the economic resilience, agency and embeddedness of actors and the degree to which actors had appreciated and believed the oil palm promise. Data were analyzed through the QCA method. The outcomes show a perfect association of appreciation of the oil palm promises, belief in them and the decision to support the oil palm. This was not strongly associated with low economic resilience however; economically less resilient respondents could reject the oil palm conversion, while economically resilient respondents could support it. In other words, the data do not point to a poverty/deforestation nexus. Rather, the data suggest the existence of an ‘embeddedness / rejection nexus’; people that were well-connected to community, traditions and nature held long-term motivations and rejected the oil palm promise, and vice versa. More attention to this phenomenon will help bridge conservation-development objectives in Kalimantan.     

Rural households’ participation in charcoal production in Zambia: Does agricultural productivity play a role?

The study uses a nationally representative dataset of smallholder farmers in Zambia to determine the effect of agricultural productivity on households’ participation in charcoal production. An instrumental variable probit approach is applied to account for the endogeneity of agricultural productivity in household's charcoal participation decision. We find a negative and significant effect of agricultural productivity on household's likelihood of participation in charcoal production. Results also show that higher education, income, asset value, and participation in off-farm employment opportunities reduce the likelihood of participation in charcoal production. Therefore, interventions seeking to reduce charcoal production in rural Zambia could benefit from improving smallholder agricultural productivity, incomes, asset base, and off-farm employment creation. However, interventions need not lose sight of other important macro-level factors.     

Are we overestimating the negative impact of higher food prices? Evidence from Ghana

Most studies of the welfare impact of higher food prices adopt Deaton's approach, based on the first‐order effect of prices changes using income and expenditure survey data. This paper explores the impact of higher maize and food prices in Ghana and considers the sensitivity of results to changes in several assumptions. If second‐order effects are included, incorporating household response to price changes, the welfare impact of food price increases is more positive, but only modestly so. However, if we assume that marketing margins are constant in real terms rather than proportional to prices, the welfare impact is substantially more positive. These findings highlight the need for more research on the behavior of marketing margins under volatile prices.