Did the Thai rice-pledging programme improve the economic performance and viability of rice farming?

This article evaluates impacts of the rice-pledging programme on the economic performance and viability of rice farming in Thailand. It also investigates whether the effects of the programme are heterogeneous across different farm types using the propensity score matching technique to address the self-selection bias in the farm-level data set. We found that the programme enhanced the economic performance less than hoped for. Overall, the programme was estimated to improve the net direct farm income for participating farms by $175.12–$194.82 per hectare. Taking into account the heterogeneous effects of the programme across farm types, we calculated that the greatest effects may be realized by farmers within the small farms subsample, at $404.41–$439.85 per hectare, but only $139.80–$213.36 per hectare for midsize farms, and $138.82–$173.34 per hectare for large farms. With regard to the economic viability of the programme, we discovered that it had an insignificant effect on farm modernization investment initiatives. Thus, future strategies incorporated into the programme that better control increases in production costs, improve small farmers’ access to the programme and require participating farms to spend a portion of the money received on farm modernization may improve long-run benefits of the programme.     

State-led or market-led green revolution? Role of private irrigation investment vis-a-vis local government programs in West Bengal's farm productivity growth

We estimate the role of private investments in irrigation in farm productivity growth in West Bengal, India between 1982 and 95. Using a state-wide farm panel, we find that falling groundwater costs generated significant growth in value added per acre for farms. These resulted from investments in minor irrigation which was stimulated by tenancy registration programs implemented by local governments. This helps account for substantial spillover effects of the tenancy reform on non-tenant farms noted in an earlier study. Hence the West Bengal Green Revolution of the 1980s benefited from complementarity between private investment incentives and state-led institutional reforms.     

The implications of the US renewable fuel standard programme for farm structure

We investigate the impact of the 2005 Renewable Fuel Standard (RFS) on farm structure, particularly farm size. We rely on the salience of a new ethanol plant in a farmers’ local neighbourhood to identify the impact of the RFS mandate on these spatially advantaged farms. To control for the nonrandom selection of ethanol production facilities, we utilize a propensity score matching estimator, and to remove impact of farm-level or market shifting unobservables resulting from shifts in commodity prices we employ a difference-in-difference (DD) matching approach. We estimate the treatment effect of an ethanol production facility on farm size prior to the RFS mandate and after the RFS programme. The effect of the RFS policy on farm size is obtained as the difference between these two DD matching estimators. Overall, our results suggest that the RFS programme raised the probability of farm size increase by roughly 12–18%, on average, for farms located within a 30-mile radius of new ethanol plants. In addition, the programme contributed to a net increase in farm size of 25–32%, on average, for those spatially advantaged farms.     

Do Farmers Overuse Nitrogen Fertilizer to the Detriment of the Environment?

Increasing use of nitrogen fertilizer in U.S. agriculture has led to nitrate contamination of water resources. The main objective of the study is to determine if the current use of nitrogen exceeds the profit-maximizing level, since reducing such discrepancy, if any, could raise farmers' profitability and enhance water quality making it a win-win situation. Specific objectives of the study, however, are two-fold. First, develop an appropriate methodology for estimation of an agronomic production function utilizing panel data with several treatments from experimental plots. Second, using experimental data from 1987 through 1990 for three farm sites in southeastern Minnesota, empirically estimate the production function and profit maximizing level of nitrogen application. Our results show that both the current recommended rate, 150 1b/acre, and farmers' use, 176 1b/acre, of nitrogen exceed the profit maximizing level of nitrogen in the region. It is shown that the recommended rate needs to be revised and made more site or area specific rather than a general figure for the entire region. The study shows considerable residual nitrogen build-up in the soil profile, implying that farmers have been applying more nitrogen than could be utilized by corn plants. The later finding highlights the importance of soil testing for plant nutrients when making decisions on fertilizer application.     

TECHNOLOGY,POLICY DISTORTIONS,AND THE RISE OF LARGE FARMS

Between 1900 and 2002, mean farm size in the United States tripled; productive resources were increasingly concentrated in large farms. These observations are difficult to explain as results of profit maximization by farmers in a frictionless equilibrium model, given exogenous factor endowment and technology. I show that notable shifts in the farm size distribution coincided with important changes in farm legislation and that farm programs provided larger farms more subsidy per dollar of output produced. These farm‐level distortions are crucial for the increasing dominance of large farms but have little impact on employment and productivity in agriculture.     

Wind turbines and coastal recreation demand

We examine the impact of coastal wind turbines on local coastal tourism and recreation for residents of the northeastern coastal counties in North Carolina. A combination of telephone and web survey data are used to assess the impact of coastal wind farms on trip behavior and site choice. Most of the respondents to our telephone survey claim to support offshore wind energy development, and independent survey data suggest that the observed levels of support may be indicative of the broader population in this region. Overall, we find very little impact of coastal wind turbines on aggregate recreational visitation; loss in annual consumer surplus associated with wide spread wind development in the coastal zone is insignificant at $17 (or about 1.5% of annual consumer surplus). Results suggest that NC local coastal tourists are averse to wind farms in the near-shore zone; average compensating variation for wind farms one mile from the shore is estimated at $55 per household. On average, we find no evidence of aversion to wind farms 4 miles out in the ocean, or for wind farms located in coastal estuaries. For all wind farm scenarios, we find evidence of preference heterogeneity—some respondents find this appealing while others find it aversive.     

Ozone pollution and farm profits in England and Wales

Tropospheric ozone is an air pollutant known to adversely affect crop yields across Europe. Experimental work is underway to quantify yield effects at ambient ozone levels for a number of crops. In this article, we undertake direct, farm-level evaluation of the impact of ozone by estimating a multi-output profit function using a panel dataset of cereal farms in England and Wales. A system of equations, comprising the profit function, input and output share equations is estimated using a fixed-effects seemingly unrelated regression technique, with ozone as a quasi-fixed input. Estimated parameters are used to calculate tropospheric ozone-related profit and output supply elasticities. The main findings from the profit function show that a 10% increase in average ozone levels would decrease variable profits by 1.3% and wheat output supply by 1%. These results are of a significantly lower magnitude, but qualitatively consistent with findings from similar studies carried out in North America.     

Farm Level Effects of On-Farm Irrigation Infrastructure Programs in the Southern Murray–Darling Basin

On-farm irrigation infrastructure programs have become an important method of recovering water for the environment in the Australian Murray–Darling Basin (MDB). These programs offer farmers funding to upgrade infrastructure in return for a portion of their water rights. This study measures the effects of Australian Government on-farm infrastructure programs in the southern MDB between 2009–2010 and 2016–2017, particularly the On-Farm Irrigation Efficiency Program. A novel dataset is constructed combining program administrative data with farm survey data. This data is used to derive econometric estimates on the effects of these programs on various measures of farm productivity, profitability and water demand. On-farm programs are found to have positive effects for participants in terms of higher farm productivity and profitability. However, the study also finds a Jevon's paradox outcome, where farm demand for water is significantly higher post-upgrade.     

Economic Impacts of Multiple Agro-Environmental Policies on New Zealand Land Use

This paper investigates the implications of policy on farm income, land use, and the environment when New Zealand landowners face multiple environmental constraints. It also looks at the interaction between climate and nutrient reduction policy and the extent to which one policy can be used to meet the other’s objectives. We use a non-linear, partial equilibrium mathematical programming model of New Zealand land use to assess the economic impacts of climate and water policies at the New Zealand territorial authority level. The spatially explicit agro-environmental economic model estimates changes in land use, agricultural output, land management, and environmental impacts. The policies investigated include a range of carbon prices on land-based emissions ($0–30/tCO\(_{2\mathrm{e}}\)) as well a range of prices on nitrogen leaching from diffuse sources ($0–30/kgN). We estimate that implementing stand-alone greenhouse gas and nutrient emissions reduction policies for the agricultural and forestry sectors will create environmental benefits outside the scope of the policy. However, not all environmental outputs improve, and net farm revenue declines by between 0 and 11%. Simultaneously implementing the two policies results in the desired goals of reductions in nitrogen and greenhouse gas emissions with a marginal economic burden on landowners (i.e. 1–2% additional loss in farm profit relative to a stand-alone policy).     

Australian Government COVID-19 Business Supports

This article documents the considerable economic support provided to businesses by the Australian Government in response to the COVID-19 pandemic. We find that measures were associated with higher levels of business profitability and savings, a strong recovery in payroll jobs and wages, and mixed effects with respect to business dynamism. We formally evaluate the SME Cashflow Boost, finding costs per job-year saved in the vicinity of $72–83,000 ($US51–59,000) over its first year, implying between 400 and 500,000 job-years saved over this period. Combined with results from previous studies, this suggests between 1.1 and 1.3 million job-years were saved by the SME Cashflow Boost and JobKeeper Payment over their respective first years post-announcement.     

Firm profitability,regional unemployment and human capital in wage determination

This paper presents an analysis of wage formation in the Norwegian private sector using data for individual workers matched with firm level information and regional unemployment. A key issue is to test whether or not firm specific variables affect individual wages after controlling for individual specific factors and working conditions. The results imply positive effects of firm specific profitability and firm size. The elasticity of wages with respect to value added per worker and firm size is 5% and 3.3%, respectively. Empirical evidence of a downward sloping regional wage curve is also reported, while there is no support of the hypothesis of compensating wage differentials. Since data for three levels of aggregation are used, the OLS estimates of the standard errors are downward biased. Therefore, results using a random effects model are also reported, taking the multi-level structure of the data into account.     

The persistence of profits in banking: an international comparison

This article examines the dynamics of bank profitability in the USA, Germany, Great Britain, France, Italy and Switzerland over the period 1993–2014. We find long-run bank profit persistence in all six countries in the period before the financial crisis in 2008. Banks with large capital ratios are persistently more profitable, and there is little evidence of a link between bank size and the persistence of bank profits. Commercial (saving) banks are persistently more (less) profitable in four of the six countries. The effects of the financial crisis in 2008 differed dramatically across countries as well as across ownership types. While US banks experienced dramatic declines in the immediate aftermath of the crisis, they recovered much faster than their European counterparts and essentially retain their long run profit potential by the year 2014.     

TARGETING FARM PROGRAMS

"Targeting" in the agricultural policy context generally means directing payments to small or financially vulnerable farms or to poor farm families. This may seem a worthy objective. If farm programs were designed to act as welfare, then focusing the benefits on the needy clearly would be appropriate. Payments now are roughly the difference between the market price per unit produced and a high government price per unit. Therefore, farms with more output get larger payments. Further, revising farm programs to act as aid to the needy would be difficult. Targeting amendments currently proposed generally are unworkable and likely would do little to change the actual distribution of benefits. Finally, because farmers currently are eligible for other aid programs and because few producers of significant output meet general welfare criteria, seemingly little real reason exists for attempting to convert farm programs rather than simply phasing down the payment levels overall.     

Integrating environmental and economic performance to assess modern silvoarable agroforestry in Europe

The environmental and economic performance of silvoarable agroforestry in Europe is highly variable. Multi-criteria analysis, using the PROMETHEE outranking approach, was used to evaluate the integrated performance of silvoarable agroforestry on hypothetical farms in nineteen landscape test sites in Spain, France, and The Netherlands. The silvoarable scenarios allocated a proportion of the hypothetical farms (10 or 50%) to silvoarable agroforestry at two different tree densities (50 or 113 trees ha^− 1) on two different qualities of land (best or worst quality land). The status quo (conventional arable farming) was also assessed for comparison. The criteria used in the evaluation (soil erosion, nitrogen leaching, carbon sequestration, landscape biodiversity, and infinite net present value) were assessed at each landscape test site; infinite net present value was assessed under six levels of government support. In France, the analysis showed, assuming equal weighting between environmental and economic performance, that silvoarable agroforestry was preferable to conventional arable farming. The best results were observed when agroforestry was implemented on 50% of the highest quality land on the farm; the effect of tree density (50-113 trees ha^− 1) was small. By contrast, in Spain and The Netherlands, the consistently greater profitability of conventional arable agriculture relative to the agroforestry alternatives made overall performance of agroforestry systems dependent on the proportion of the farm planted, and the tree density and land quality used.     

Valuation and management of wetland ecosystems

We recently completed a study of wetland values in coastal Louisiana that employed both willingness-to-pay and energy analysis-based methodologies and were able to bracket a range of values within which we feel fairly confident the true value lies. However, a large amount of uncertainty remains. Our current estimates of the total prsent value of an average acre of natural wetlands in Louisiana are US$2429–6400 per acre (assuming an 8% discount rate) to $8977–17000 per acre (assuming a 3% discount rate). At the lowest value, the current annual rate of loss of Louisiana wetlands (50 sq miles per year) is worth about $77 million. At the largest value it is worth about $544 million.In this paper we (a) discuss the fundamental theoretical and practical problems underlying natural resources valuation; (b) summarize our methods and findings for Louisiana wetlands; and (c) elaborate on some of the more recalcitrant problems attending applied natural resource valuation, including discounting and dealing with uncertainty and imprecision.The discount rate makes more difference in the final result than any other one factor, and yet there is much disagreement about the appropriate approach to discounting natural resources. We discuss the discounting problem as applied to natural resources and argue for lower discount rates for valuing renewable natural resources than apply for other aspects of the economy.It now seems clear that no reasonable amount of effort will produce very precise estimates of wetland values, and we suspect this is also the case for several other classes of natural resources. We elaborate a Wetlands Asurance Bonding System to address these problems.     

WELFARE LOSS OF WETLANDS DISINTEGRATION: A LOUISIANA STUDY

This study estimates the loss in welfare of projected Louisiana coastal wetlands disintegration. Various programs have initiated costly projects to terminate this disintegration process. But can these projects succeed, and will their benefits exceed their costs? This study addresses the benefits issues and estimates reductions in incomes and consumption opportunities and increases in costs that would be avoided if restoration and enhancement projects are successful. Estimated welfare losses that would be avoided do not include non-user and lifestyle losses, which may be very important, and they do not include the costs of dismantling coastal infrastructure. These exclusions make the estimates of this study minimum estimates of welfare losses. Future economic welfare losses represent a 1990 present value in a range between $5.9 and $24.3 billion, depending upon discount rates and whether low or high loss estimates are used. In order to make these estimates more meaningful, the implied wetlands values were calculated on a per acre basis. These values ranged from $8,437 to $15,763 per acre.     

Oil shale and climate policy in the shift to a low carbon and more resilient economy

Policy makers worldwide are recently debating options to implement an effective climate policy that would put a cap on green house gas emissions. At the same time, investors are carefully evaluating the profitability of unconventional fossil fuels such as shale oil. To enhance the understanding of the impacts of a climate policy such as the American Clean Energy and Security Act of 2009, on oil shale production – and vice versa – we have customized an integrated assessment model, the Climate and Energy Assessment for Resiliency model for Unconventional Fossil Fuels to the U.S. Western Energy Corridor. Our analysis indicates that while the bill would increase the production cost of oil shale, the industry remains highly profitable in the longer-term, generating a potential profit of about $10 to $16 billion per year by 2040 at 2.5 million barrels per day. These results suggest that the oil shale industry may comfortably face the enactment of a carbon policy, albeit with some caveats. Furthermore, while its potential economic impact on non-compliant industries may be severe, it would generate mounting profits for those achieving energy efficiency gains, thereby increasing the profitability of energy efficiency investments.     

FARM PROFITABILITY AND BUREC WATER SUBSIDIES: AN LP LOOK AT A REGION

Most studies of irrigation water subsidies focus on farmers' "ability-to-pay" for irrigation-related construction costs without questioning the methods used to subsidize these costs. This article shows how BUREC water subsidies could be eliminated by increasing federal water and power rates on long-term irrigation contracts. The welfare effects of this "desubsidization" are examined for California's San Joaquin Valley, which uses federal power for groundwater pumping and the conveyance of surface water. A linear programming model provides estimates of the change in farm profitability from imposing full-cost federal water and power rates. The desubsidization has a disproportionate impact on growers of water intensive crops while benefiting non-agricultural power users and the U.S. Treasury. This points to the conclusion that charging full-cost rates would redistribute $4.58 million of profit-income per year without significant regional impacts on growers.     

Market deregulation,trade liberalization and productive efficiency in Bangladesh agriculture: an empirical analysis

The impact of trade liberalization and of market deregulation in general, on the performance of agriculture remains contentious and empirical issue in the literature. Following the random coefficient frontier modelling framework, this paper attempts to contribute to this debate by computing the farm-specific productive efficiency indices in Bangladesh agriculture before and after reform. It also examines the impact of some farm-specific and policy variables on productive efficiency. The empirical results show that there are wide variations in productive efficiency across farms and regions and the average efficiency of all regions increased modestly by 8 percentage points from the pre-reform to post-reform period. The efficiency differentials are largely explained by farm size, infrastructure, households' off-farm income and the reduction of government anti-agricultural bias in relation to trade and domestic policies. The implication of these results suggests the need for further policy reform to augment productive efficiency.     

Disciplining firms: the impact of trade reforms on profit margins in Indian industry

The paper analyses the effects of increased trade exposure on the profitability of firms in Indian industry. While trade reforms are often expected to decrease profit margins as firms struggle to compete in international markets, there is the possibility that increased competition may improve firm efficiency and provide a positive impetus to firm profitability. This paper is different from many others in this area in that it considers both these possibilities. An efficiency index is created to directly analyse the impact of changing efficiency levels on firm profit margins. Results indicate that liberalization significantly influenced profit margins. However, its main effect is through the impact that it has had on other firm variables - market shares, advertising, R&D and exports - all of which changed after 1991. While exports have had a pro-competitive effect on profit margins in the selected sample, AD and R&D both cause an increase in profit margins. It is also found that neither capital nor managerial capabilities (as proxied by remuneration) are particularly effective in increasing profit margins.