Some Lessons from the Modelling of the Spanish Rice Market

Spanish accession to the European Comminity (EC) will lead to many changes in Spain's agricultural sector. Predicting the nature of these changes is difficult because the new policy regime differs significantly from historic Spanish policies. In this paper, conventional econometric models of the Spanish rice sector are constrated with a model designed specifically to reflect the pervasive impact of Spanish rice policies. This policy model predicts the historical evolution of production, consumption and trade more accurately than the conventional models. However, the policy model cannot be used to predict the impact of the radical policy changes in Spain resulting from the introduction of the EC rice regime because the historical relationships no longer hold. It is argued that alternative approaches relying more on institutional analysis and expert opinion need to be developed to understand the future of the Spanish rice sector.     

Water policy reform in Australia: lessons from the Victorian seasonal water market*

The nature of the seasonal water market is examined using a theoretical model and empirical evidence from the Victorian market. Drivers of the seasonal opportunity cost of water include the underlying nature of investment in the industry made in the context of risky entitlement yields; and the timing and nature of information regarding seasonal water availability and rainfall. Seasonal water markets facilitate the re‐allocation of water availability according to this short‐run opportunity cost. Evidence from the market suggests that transactions costs are low and most of the existing constraints to trade in seasonal allocations are the result of hydrological conditions. Analysis of market data suggests that the price response of the market to water availability is much more pronounced in years of low rainfall. The implications of the paper for wider policy reform are that attention should be paid to improving property rights for the management of intertemporal risk before other reforms, such as broadening of permanent water markets and institutionalising environmental flows, are implemented. This is because these other reforms will change the spatial and temporal pattern of water use and thus affect reliability, which underpins the value of water in irrigated agriculture.     

Value of moving from central planning to a market system: lessons from the Israeli water sector

This paper explores the implications of the transformation of the system of water resources allocation to the agricultural sector in Israel from a one in which allotments are allocated to the different users without any permission to trade with water rights. A mathematical planning model is used for the entire Israeli agricultural sector, in which an ‘optimal’ allocation of the water resources is found and compared to the existing one. The results of the model are used in order to gain insight into the shadow price of the different water bodies in Israel (about eight). These prices can then be used to grant property rights to the water users themselves in order to guarantee rational behavior of water use, since now one can sell their rights at the source itself. The implication is clear with regard to any possible movement towards a market system in any other sector. From the dual prices of the primal problem we can forecast the equilibrium prices and their implications for the different users. The central government does not have to interfere with the market mechanism because, as will be shown, every farmer has the option to sell his right or to use it. As participation in the market is voluntary, every farmer makes a decision that is both individually and socially rational. However, in moving from a central planning allocation to a market mechanism, the government has another task, which is to grant the property rights in order for the market to begin to evolve. It is not guaranteed that under any initial allocation a decentralization of the system will benefit all the regions but at least part of the problem is to be resolved between the regions themselves. As the results shows, there is a potential budgetary benefit of 28 million dollars when capital cost is not included and 64 million dollars when they are included.     

Incentives and static and dynamic gains from market reform: rice production in Vietnam

This article develops a dynamic model to account for the enhanced incentive effects that result from market reform through a move toward private property rights and competitive markets. Reform is captured through an emerging profits function which depends on effective prices and incentives to work harder. Static and dynamic output gains from reform are derived through increases in total factor productivity and induced capital accumulation. The model is applied to rice production in Vietnam over the period 1976–94. The more extensive is market reform, the larger the effects found on rice output, the capital stock and transitional growth rates, suggesting that incentives and more competitive markets matter greatly.     

Global market shocks and poverty in Vietnam: the case of rice

World food prices have experienced dramatic increases in recent years. These “shocks” affect food importers and exporters alike. Vietnam is a major exporter of rice, and rice is also a key item in domestic production, employment, and consumption. Accordingly, rice price shocks from the world market have general equilibrium impacts and as such, their implications for household welfare are not known ex ante. In this article, we present a framework for understanding the direct and indirect welfare effects of a global market shock of this kind. We quantify transmission of the shock from global indicator prices to domestic markets. Then we use an applied general equilibrium model to simulate the economic effects of the price changes. A recursive mapping to a nationally representative household living standards survey permits us to identify in detail the ceteris paribus effects of the shock on household incomes and welfare. In this analysis, interregional and intersectoral labor market adjustments emerge as key channels transmitting the effects of global price shocks across sectors and among households.     

Government intervention and market integration in Indonesian rice markets

Long-run spatial price relationships in Indonesian rice markets and factors affecting the degree of market integration are evaluated using multivariate cointegration tests with weekly price data for the 1982-1993 period. The analysis includes evaluation of pre-self-sufficiency and post-self-sufficiency periods as well as Cot the entire period. The cointegration tests for entire Indonesian rice market, represented by the nine most relevant price series, indicate that relative to the pre-self-sufficiency period, the post-self-sufficiency period has a smaller degree of market integration. The change of the degree of market integration over time indicates that rationalizing of the Indonesian rice price policy beyond 1984 rice self-sufficiency has resulted in a less integrated market. This suggests that the policy shift has allowed the government to decrease its intervention without significantly decreasing market integration, indicating that the private sector is responding to price signals appropriately. It is possible that further reduction in intervention through widening the band between the floor and ceiling price could be accomplished without greatly affecting market integration. Regression results show that government intervention in terms of rice procurement significantly influenced market integration during the period of post-self-sufficiency (1985-1993) and the entire period of 1982-1993. This indicates that this aspect of government intervention has had positive influences on market integration, in contrast to distribution efforts, which were not found to be statistically significant, Procurement prices may be high, and could perhaps be lowered, reducing program costs. Regional per capita income is also found to be positively related to highei levels of market integration, suggesting that in periods of economic growth, government intervention may be decreased, thereby reducing program costs.     

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.     

Price dynamics in the Bangladesh rice market: implications for public intervention

In this paper, the price dynamics of a rice market are examined using dynamic programming techniques. The model is parameterised to the case of Bangladesh and thus represents the situation of a very poor country which has characteristically high price elasticity (due to income effects) and high storage and interest costs. The incentives for private sector storage and its impact on price stability are examined. Various options for public intervention in the storage sector are also explored, including price ceiling schemes and subsidisation of storage costs. Results show that interventions that remove private disincentives (such as storage subsidies) are much cheaper than direct intervention by government, but the impact on the probability distribution of prices is quite different. The effect of trade on the probability distribution of prices is also examined.     

Animal disease outbreaks and food market price dynamics: Evidence from regime‐dependent modelling and connected scatterplots

The economic impacts of animal disease outbreaks have been widely discussed in the literature. Most authors have centred their attention on estimating the direct costs. Recent studies have shown that the indirect economic effects might lead to equal or even higher welfare losses. This study aims to contribute to this field of research by assessing the effect of an animal disease outbreak on food market price dynamics in Mexico, accounting for the potential effect of an antitrust intervention. We employ a regime‐dependent vector error correction model and a connected scatterplot analysis. The results show that both the outbreak and the antitrust intervention caused structural breaks in food market price dynamics between producers and consumers, reflected in an increase in the absolute component of the marketing margin, with serious food security implications.     

International trade in a differentiated good: Trade elasticities in the world rice market

In many previous rice trade models, the commodity has been regarded as a homogeneous product. However, homogeneity is not an appropriate assumption, given the various types of rice that are traded and consumed. Parameters estimated from these models, therefore, do not reflect the real world market for rice and, hence, may mislead decision makers who use the results for policy evaluation purposes. This study uses an Armington approach to model the world rice trade as a differential good market and to derive trade elasticity parameters.     

The right place to grow rice for the Japanese market: comparative analysis of greenhouse gas emissions of rice cultivation in Japan and the United States

One consequence of increasing agricultural trade is a shift of geographic location of agricultural activity to more economically productive countries. Whether or not the economic efficiency translates to environmental efficiency for agricultural goods is an open question. To examine environmental implications of shifting agricultural location, we analysed the life-cycle greenhouse gas (GHG) emissions of rice production in Japan and the US for the Japanese market in a comparative manner. This paper presents the life-cycle assessment of brown japonica rice. Our computation of GHG emissions of rice production in Japan and the US were 3.54 and 2.99?kgCO₂-eq kg-rice^?1, respectively. With respect to harvested area, the emissions were 18.4 in Japan and 27.8?tCO₂-eq ha^?1 in the US. For Japan to be environmentally competitive with the US production, fundamental restructuration of field size is necessary to increase yield. In conclusion, economic efficiency does not translate to environmental efficiency with the case of rice production. Importing rice is both economically and environmentally viable option for the Japanese market.     

电力市场环境下抽水蓄能电站经营模式的探索

简述抽水蓄能电站经营模式现状,论述抽水蓄能电站容量效益和电量效益的划分,提出电网公司和若干大机组发电企业的共同租赁模式及其模型表述,对该模式的合理性进行分析,指出：共同租赁的经营模式使电厂和电网在都受益的前提下各承担一部分租赁费,兼顾各方的利益,具有较强的可行性。     

Perpetuating poverty through exclusion from social programmes: lessons from Andhra Pradesh

ABSTRACT

What factors underlie the exclusion of some poor households from welfare programmes? This article analyses the question through a comparative examination of households’ demographic characteristics, social capital and communities’ spatial (dis)advantage as determinants of enrolment in three social programmes in Andhra Pradesh, India. The main findings indicate that traditionally marginalised demographic groups do not experience programme exclusion significantly more than other groups, but that households’ social-network capital and communities’ spatial advantage increase households’ programme inclusion. The importance of social capital for programme inclusion wanes, however, in spatially more advantaged communities.     

Food price increases and net food importing countries: lessons from the recent past

Recent increases in food and other commodity prices have highlighted concerns that many poor countries are net food importers and higher food prices would worsen their trade balances. In this article, we analyze the changes in food trade balances associated with the 32% increase in food prices from 2000/2001 to 2004/2005. We find a small deterioration in food trade balances of low‐income countries and an improvement in middle‐income countries. The deterioration is most severe for countries in conflict and small island states, so attention should be placed first on these countries and on a few very‐low‐income countries that are also vulnerable. Because low‐income countries as a group had much lower agricultural GDP growth rates than middle‐income countries, the answers to food vulnerability in low‐income countries should probably be addressed within the context of incentives for agricultural production.     

The valuation of market information from livestock selling complexes

The efficient operation of livestock markets is contingent upon producers accessing relevant market information which assists adjustment to production and distribution. This article provides an analysis of the value of market information gleaned by producers attending public livestock auctions. The article uses the Travel Cost Method to quantify the value of this information and notes the limitations of applying the Travel Cost Method in this context.     

Measuring market power in the French Comte cheese market

A new empirical industrial organisation approach is used tomeasure seller market power in the French Comté cheesemarket, characterised by government-approved supply control.The estimation is performed on quarterly data at the wholesalestage over the period 1985–2005. Three different elasticityshifters are included in the demand specification, and the supplyequation accounts for the existence of the European dairy quotapolicy. The market power estimate is small and statisticallyinsignificant. Monopoly is clearly rejected. Results appearto be robust to the choice of functional form and suggest littleeffect of the supply control scheme on consumer prices.