Does Agriculture Really Matter for Economic Growth in Developing Countries?

This paper revisits the debate on the role of agriculture in promoting economic growth in a selection of nine developing countries. We investigated the causal linkages between agriculture and gross domestic product growth with the aid of directed acyclic graphs, a recently developed algorithm of inductive causation. The results suggest that while agriculture could be an engine of economic growth, the impact varies across countries. In some cases, we found strong evidence in support of the agriculture‐led growth hypothesis. In contrast, the results for some other countries indicate that having a vibrant aggregate economy is a prerequisite for agricultural development.     

Is Passive Farming A Problem for Agriculture in the EU?

We address a new agricultural policy concern following the decoupling of CAP direct payments in 2005: passive farming, whereby landowners maintain their agricultural area to collect payments without producing commodities. It is claimed that passive farming is hindering agricultural development by ‘blocking’ access to farmland for expanding farmers. We evaluate the links between the EU's Single Payment Scheme (SPS), passive farming, land use and agricultural development. Following identification of the rational landowners’ optimal land‐use choice, we evaluate the effects of the SPS using a spatial, agent‐based model that simulates farmers’ competition for land in a case‐study region of Sweden. We show that passive farming does not constrain land from being used in production; on the contrary more land is used than would be the case without the SPS. We conclude that passive farming is not a problem for agriculture, but provides public goods that would otherwise be under provided: preservation of marginal farmland and future food security. However SPS payments on highly productive land inflate land values (capitalisation) and slow structural change, which hinder agricultural development. Consequently CAP goals could be better served by targeting payments on marginal land and phasing out payments to highly productive land.     

Demand for Seasonal Wage Labour in Agriculture: What Does Family Farming Hide?

This article draws on the agricultural household literature to understand the dynamics of wage labour on farms in a context of family farming. The recent evolution towards an increased use of seasonal wage labour motivates the original distinction of three types of labour: family labour, permanent‐wage labour and seasonal‐wage labour. Considering the two wage labour types and hiring cost for seasonal workers, our empirical results based on 2000 French data on fruit and vegetable farms suggest that the choice between hiring permanent or seasonal wage labour is not only determined by the seasonality of the activity. Indeed, the characteristics of the local labour market also affect the trade‐off between permanent and seasonal wage labour. This result provides insights on the substitutability of the two labour types, especially when the local labour market is tight. Moreover, the substitution of seasonal‐wage labour for permanent‐wage labour can occur in the agricultural sector as a mean of increasing flexibility as well as reducing costs and commitments. Finally, family labour is found to substitute for wage labour and more specifically for seasonal‐wage labour.     

North American Trade Policy for Agriculture and Forestry: Can Economics Trump Politics?

Despite overwhelming evidence of benefits overall from lower barriers to trade in goods and services, the number of trade restrictions continues to grow. In some nations, nationalistic politicians who threaten to build walls between nations and reject both new and established trade treaties have gained considerable public support by fanning the resentment and anger of those left behind in a globalizing world. Trade and immigration have incorrectly been blamed. Instead, it should be recognized that economic growth has been fueled by technological and institutional changes that have been accelerated by trade and investment. While these changes improve standards of living overall and create new job opportunities, they also displace workers in high cost regions and industries. Perceptions of the fairness of distribution of gains from trade are likely to be improved where public policy effectively assists labor adjustment and mandates socially acceptable employment standards and safety nets. Possible ways to encourage improvements in communication of the benefits of growth that arise from trade and globalization are suggested. Malgré des preuves accablantes démontrant les avantages généraux provenant de la réduction des barrières au commerce de biens et services, le nombre de ces restrictions continue d'augmenter. Certaines nations oú des politiciens nationalistes menacent la construction de murs frontaliers et rejettent les accords de commerce, autant nouveaux que déjà en vigueur, reçoivent un soutien public considérable en encourageant l'animosité et la colère de ceux qui se sentent exclus de la mondialisation. Le commerce et l'immigration portent sans raison le blâme. Il faut plutôt reconnaître la croissance économique nourrie par les changements technologiques et institutionnels, ces derniers accélérés par le commerce et l'investissement. Alors que ces changements améliorent, en général, les niveaux de vie et créent de nouvelles possibilités d'emplois, ils délogent aussi les travailleurs au sein d'industries à coût élevé. La perception de justice dans la répartition des gains de commerce pourrait s'améliorer là où les politiques publiques appuient efficacement les ajustements à la main‐d'œuvre et mandatent des normes de travail et des dispositions de soutien acceptables pour la société. L'article propose des moyens pour encourager des améliorations à la communication des avantages de la croissance provoquée par le commerce et la mondialisation.     

Foreign Aid and the Quest for Poverty Reduction: Is Aid to Agriculture Effective?

Development statistics estimate that three quarters of the poor live in rural areas and most of them depend on agriculture and related activities for their livelihood. Consequently, research focusing on economic growth and poverty reduction has found that sustainable rapid transition out of poverty requires a special emphasis on the agricultural sector. This study contributes to the debate on aid effectiveness by disaggregating total aid into subcategories and specifically investigating the relationship between aid given to the agricultural sector and poverty reduction. If agricultural development is more effective in reducing poverty than some other types of development, then foreign aid directed towards agriculture may be more efficient in increasing the well‐being of the poor than aid directed to some other sectors or uses. Our analysis uses panel data for developing aid recipient countries to empirically test this relationship. We find a significant relationship between agricultural aid and poverty reduction in our estimates.     

Wages,Prices and Agriculture: How Can Indian Agriculture Cope with Rising Wages?

Rapid economic growth in India has resulted in rapidly rising rural wages. Using the framework of variable profit functions and household level data, we study econometrically the wage impacts on crop agriculture. Rising wages are associated with decreasing crop output, other things being equal. Crop prices would need to increase by 80% in the short run to offset the effect of an agricultural wage increase, or by 140% in the short run to offset rural non‐farm wage increases as well. However, because non‐land farm assets respond positively to the non‐farm wage, in the medium term this increase is reduced to 74%. During the period of 1999/00‐2007/08, growth in non‐land farm assets, the labour force, education and technology has easily compensated for the wage increase, and probably also for the accelerating wage growth. Focusing on growing these shifter variables is a much better policy option than raising prices that would come at the expense of consumers or taxpayers.     

Brexit: How Will UK Agriculture Fare?

There is little doubt that Brexit would have significant implications for UK agriculture, a sector with strong trade links to the EU and strong reliance on CAP income support. This article reports preliminary results from employing a Computable General Equilibrium Model, a Partial Equilibrium Model and Farm Level Models to explore selected trade and domestic policy scenarios post‐Brexit. These allow for the estimation of changes in producer prices, production and farm incomes against a baseline scenario of continued EU membership. Under a Free Trade Agreement with the EU, agricultural impacts are relatively modest. By contrast, unilateral removal of import tariffs has significant negative impacts on prices, production and incomes. Adoption of the EU's WTO tariff schedule for all imports favours net importers (e.g. dairy) and harms net exporters (e.g. sheep). Given the strong dependence of most UK farms on direct payments, their removal worsens negative impacts of new trade arrangements and offsets positive impacts. Impacts vary across different types and sizes of farm, but also regionally. However, the period of adjustment to new trade and domestic policy conditions may prove very challenging for a large number of farm businesses.     

Climate Smart Agriculture? Assessing the Adaptation Implications in Zambia

We examine a set of potentially climate smart agricultural practices, including reduced tillage, crop rotation and legume intercropping, combined with the use of improved seeds and inorganic fertiliser, for their effects on maize yields in Zambia. We use panel data from the Rural Incomes and Livelihoods Surveys merged with a novel set of climatic variables based on geo‐referenced historical rainfall and temperature data to explore the changing effects of these practices with climatic conditions. We estimate the impacts on maize yields, and also on the exhibition of very low yields and yield shortfalls from average levels, as indicators of resilience, while controlling for household characteristics. We find that minimum soil disturbance and crop rotation have no significant impact on these yield outcomes, but that legume intercropping significantly increases yields and reduces the probability of low yields even under critical weather stress during the growing season. We also find that the average positive impacts of modern input use (seeds and fertilisers) are significantly conditioned by climatic variables. Timely access to fertiliser emerges as one of the most robust determinants of yields and their resilience. These results have policy implications for targeted interventions to improve the productivity and the resilience of smallholder agriculture in Zambia in the face of climate change.     

European Agriculture after Brexit: Does Anyone Benefit from the Divorce?

The UK exited the EU on 31 January 2020, with a transition period agreed as part of the Withdrawal Agreement. During this transition period the UK and the EU will decide on their future trading relationship. No matter what form this relationship takes, there will be disturbances to agri‐food markets. This study analyses four different scenarios with increasing barriers to trade, ranging from a very close relationship similar to the European Economic Area to a distant relationship in which the UK and EU trade on Most Favoured Nation terms, using the EU focused global agricultural sector model CAPRI. In the UK, food prices will increase in all scenarios, making consumers in the UK the biggest losers. Only in a free trade agreement scenario does the UK show an unambiguous positive net welfare gain in just the agri‐food sector. In the case of the European Economic Area scenario, which assumes continued access to the single market, the net welfare impact would depend on the size of the UK’s continued contribution to the EU. In the EU, declining food prices would benefit consumers but the sum of the loss in farmers’ incomes and the UK’s EU CAP contribution would be much greater than the consumer’s gain. These impacts in agricultural markets under different future trade arrangements will also be influenced by the UK’s agricultural policy changes in direct payments as well as by possible further UK trade liberalisation after the end of the transition period.     

Agriculture–nutrition linkages with heterogeneous,unobserved returns and costs: Insights from Tajikistan

Agriculture–nutrition linkages (ANLs) have been increasingly investigated in the literature. However, nutritional returns and costs of household agricultural production practices (APPs) in semisubsistence settings are poorly understood. We fill these knowledge gaps using pooled cross-section data sets in Tajikistan, where semisubsistence farming and undernutrition coexist despite relatively good agricultural infrastructure and education systems. Agricultural diversification, yield enhancement, production expansion are positively associated with various nutritional outcomes, particularly in areas with poor food market access. Decomposition exercises suggest that nutritional returns and costs of these APPs vary across households, and the adoption of APPs is driven by the expected nutritional returns. In Tajikistan, improving nutrition through household ANLs requires growing the smallholder agricultural sector in multiple dimensions, including diversification, intensification, and expansion, while also understanding better the pathways of ANLs and addressing bottlenecks at appropriate stages of such pathways.     

Introduction to the Special Feature: Will the BRIC Decade Continue? The Role of Rural Areas and Agriculture

This article provides an introduction to the special feature on agriculture‐related issues in the emerging economies of Brazil, Russia, India and China (BRIC) contained in this issue of Journal of Agricultural Economics. The special feature is motivated by the increased interest which these countries have received since the turn of the millennium and by the significance of agriculture in their development. It considers economic and social development in BRICs, their integration in world agricultural trade as well as environmental concerns. This article presents key figures on economic, social and agricultural features in BRICs and compares them across countries. A synthesis of the articles included in the special feature is provided by highlighting the selection of topics likely to be crucial for further development across BRICs.     

Do Community Supported Agriculture programmes encourage change to food lifestyle behaviours and health outcomes? New evidence from shareholders

Community Supported Agriculture (CSA) programmes have recently received attention for their potential to influence food lifestyle behaviours and health outcomes, though studies have mostly drawn from small samples (n?t-tests assess if paired means are statistically different, and multiple regressions of paired differences on socioeconomic factors, self-reported health, and years of CSA enrolment estimate the effect of respondent characteristics on behaviour change. The results strongly suggest that CSAs have the potential to positively impact shareholders’ food lifestyle behaviours and health outcomes, and that those reporting ‘poor health’ prior to CSA enrolment exhibited the most change overall. These results should be taken as an initial, yet promising, analysis of the impact of CSA participation on shareholder food lifestyle behaviours and health outcomes.     

The Economic Impacts of Climate Change on Canadian Agriculture and the World: How Big are the Impacts Really?

A computable general equilibrium model was used to assess the impacts of global climate change on Canadian Agriculture. The assumption of ceteris paribus was relaxed. The results indicated that many supply and demand factors have potentially larger impacts on the Canadian and world economies over the next 5 decades than climate change. The distribution of regional impacts varied substantially. Such information is valuable for the agricultural sector and policymakers trying to allocate limited resources .     

Does Intensive Tillage Enhance Productivity and Reduce Risk Exposure? Panel Data Evidence from Smallholders’ Agriculture in Ethiopia

We analyse the impact of intensity of tillage on wheat productivity and risk exposure using panel household‐plot level data from Ethiopia. In order to control for selection bias, we estimate a flexible moment‐based production function using an endogenous switching regression treatment effects model. We find that tillage has a complementary impact on productivity and risk exposure. As the intensity of tillage increases, productivity increases and farmers’ exposure to risk declines. Our results suggest that smallholder farmers use tillage as an ex‐ante risk management strategy. The main policy implication of this study is that the opportunity cost of switching to reduced tillage in wheat production seem rather high unless farmers are supported by appropriate incentive schemes.     

Is Input Mix Inefficiency Neglected in Agriculture? A Case Study of Pig‐based Farming Systems in England and Wales

The principal concern of this article is the relative importance of input mix as a source of inefficiency. Emphasis in efficiency analysis studies in agricultural production has historically focused on technical inefficiency as a single concept until methodological advances enabled it to be decomposed into pure technical inefficiency and scale inefficiency. But, this advance was insufficient to identify what we consider to be the major source of inefficiency in agricultural production, namely mix inefficiency. We consider that farm enterprises may be particularly susceptible to input mix inefficiency because of restrictions on movement around the frontier isoquant; delays in the adoption of improved technologies embodied in new vintages of production processes; risk as a source of friction in input allocation decisions; and the potential for inconsistency in simultaneously attempting to reach points of allocative efficiency and mix efficiency in input use. We use non‐parametric methods to calculate a Hicks–Moorsteen productivity index using panel data for a sample of specialised pig producers in England and Wales. This index is then decomposed into measures of technology, technical efficiency, scale efficiency and mix efficiency for an input orientation. Results of the analysis show that the estimated mean mix inefficiency (0.736) was substantially larger than mean technical inefficiency (0.975) and mean scale inefficiency (0.957) over the study period.     

‘Deal’ or ‘No Deal’? Impacts of Alternative Post‐Brexit Trade Agreements on UK Agriculture

Brexit will have important implications for UK agricultural commodity markets due to potentially significant changes to trade flows. We quantify the sectoral impacts on UK agriculture of three illustrative scenarios, which capture a broad range of potential trade arrangements: Bespoke Free Trade Deal , WTO Default and Unilateral Trade Liberalisation . It is estimated that the projected market impacts are relatively small if the UK negotiates a Bespoke Free Trade Agreement with the EU. The projected impacts are much greater under the two other scenarios, which capture potential trade arrangements if ‘no deal’ is reached. The high tariffs imposed under the WTO default scenario lead to significant adjustments in trade between the UK and EU‐27, with the impact on the domestic UK market depending on whether the UK is a net importer or a net exporter of the relevant commodity. All sectors experience price and production declines under the trade liberalisation scenario in which the UK unilaterally sets tariffs on imports from both the EU‐27 and the rest of the world to zero; the impacts are particularly severe in the beef and sheep sectors where international competition is very strong.