Estimating Input Use and Production Costs From Farm Survey Panel Data

Econometric estimation of enterprise input use and production costs offers a less expensive alternative to special surveys. Estimates of input allocation are of use within programming models, for policy analysis and income forecasting. However, simple ordinary least squares estimation has been plagued by a number of problems and the results have been disappointing. This paper provides some empirical evidence on the extent to which these problems can be overcome, or at least mitigated, through exploitation of panel data sets and appropriate panel data estimation techniques. The results confirm that this approach provides some improvement in estimation results, but some practical and methodological problems remain.     

The Dynamics of Farm Incomes: Panel data analysis using the Farm Accounts Survey

This paper uses longitudinal information from the Scottish Farm Accounts Survey to explore the dynamics of Scottish farm incomes between 1988/89 and 1999/2000. Both the Net Farm Income and Cash Income of farms are considered. The results show high levels of income variability and income mobility within Scottish agriculture. Although exit rates from the lowest income groups remain relatively high even when spells of low income have lasted a number of years, there is evidence of farms with persistent low farm income and farms experiencing repeated spells of low‐income. Smaller farm size and having a farmer aged over 65 increase both the probability that a farm will fall into the lowest income group and the length of time spent in that income group. Further the results suggest that the impact of the post‐1997 agricultural recession on income mobility depended on the income status of the farm when the recession began.     

Does Capital Market Structure Affect Farm Investment? A Comparison using French and British Farm–Level Panel Data

This article considers whether differences in the structure of agriculture credit markets in France and the United Kingdom alters the investment sensitivity to financial variables particularly cash flow. Using two panel datasets of French and British farms, three approaches are used to test the sensitivity of investment to internal finance, an inventory investment model, a fundamental q –model, and Euler equations for machinery investment. The results suggest that the contrasting capital markets structures do induce differences in overall investment sensitivity to cash flow and its pattern across both farms with varying levels of collateral and between inventory and machinery investment.     

A Parametric Approach to Estimating Eco‐Efficiency

The concept of eco‐efficiency is becoming increasingly popular as a tool to capture economic and environmental aspects of agricultural production. The literature to date has exclusively used the Data Envelopment Analysis (DEA) approach to measure producers’ eco‐efficiency. We show that it can also be estimated using a Stochastic Frontier Analysis (SFA) approach. Our approach not only allows controlling for random noise in the data but also permits an analysis of the potential substitutability between environmental pressures. We provide an empirical application of our model to data on a sample of Spanish dairy farms.     

Livestock in China: Commodity-Specific Total Factor Productivity Decomposition Using New Panel Data

Studies of total factor productivity (TFP) in livestock production are rare, but when available provide useful information especially in the context of developing countries such as China where livestock is becoming more important in the domestic agricultural economy. We estimate TFP for four major livestock products in China employing the stochastic frontier approach, and decompose productivity growth into its technical efficiency (TE) and technical progress components. Efforts are made to adjust and augment the available livestock statistics. The results show that growth in TFP and its components varied between the 1980s and the 1990s as well as over production structures. While there is evidence of considerable technical innovation in China's livestock sector, TE improvement has been relatively slow.     

Challenging Small‐Scale Farming: A Non‐Parametric Analysis of the (Inverse) Relationship Between Farm Productivity and Farm Size in Burundi

We use a non‐parametric approach to investigate the (inverse) relationship between farm productivity and farm size. A kernel regression is used on data of mixed cropping systems to study the determinants of production including different factors that have been identified in literature as missing variables in the testing of the inverse relationship such as soil quality, location and household heterogeneity. Household data on farm activities and crop production were gathered from 640 households in 2007 in two Northern provinces of Burundi. Our results do not reject the findings of an inverse relationship between farm size and productivity. However, we find that size returns vary substantially with farm size, that is, between 0.2 for the smallest farms and 0.8 for the largest farms. Other factors that significantly affect production include soil quality. Finally, we find a significant positive association between food security and farm size.     

On‐Farm Conservation of Rice Biodiversity in Nepal: A Simultaneous Estimation Approach

This paper presents an empirical case study about farmer management of rice genetic resources in two communities of Nepal, drawing on interdisciplinary, participatory research that involved farmers, rice geneticists and social scientists. The decision‐making process of farm households is modelled and estimated in order to provide information for the design of community‐based conservation programmes. A bivariate model with sample selection examines the simultaneous process of whether farmers decide to plant landraces or modern varieties, and whether the landraces they choose to plant constitute the genetic diversity of interest for future crop improvement. Findings show that the two landrace choices are affected by different social and economic factors, but in certain cases the decision processes are interrelated. Policies to promote the conservation of local rice diversity will need to take both processes into account.     

城市工业用地产出率影响因素及区域比较—— 地级城市面板数据分析

研究目的:发现城市工业用地产出率影响因素及其影响程度和区域差异,提出相应对策以促进工业集约用地。研究方法:根据土地功能理论和经济主体动力学关系导向原则构建城市工业用地产出率双向固定效应模型,利用地级城市面板数据估计并检验工业用地产出率影响因素及作用程度并进行区域比较。研究结果:城市工业用地投资强度、就业密度和全要素生产率对1999年来城市工业用地产出率增长的贡献率分别为21.3%、-7%和85.7%;它们对工业用地产出率的边际贡献由于东中西部工业用地集约度、产业类型、劳动素质不同而呈现出区域差异。研究结论:应遏制各地尤其是中西部工业新区建设中粗放用地行为、促进工业投资并加强工业区生活配套以提升投资强度和就业密度,应在工业用地配置和评价中更加重视全要素生产率指标,应推动中西部地区工业升级并在营商环境、基础设施等方面缩小与东部的差距。     

Modelling Farmers’ Participation in an Agri‐environmental Scheme using Panel Data: An Application to the Rural Environment Protection Scheme in Ireland

Previous studies that have attempted to model the participation decision of farmers in agri‐environmental schemes have used a static framework where it was not possible to examine changes in the participation decision of farmers over time. This is rectified in this paper by utilising an 11‐year panel that contains information on 300 farmers for each year. The structure of this dataset allows us to employ discrete time duration random effects panel data logit models to model the determinants of entering the Irish Rural Environment Protection Scheme (REPS). We introduce a dynamic element into a number of the models by using the random effects logit model estimator, with lagged dependent variables as additional explanatory variables. The results point to the fact that systems of farming that are more extensive and less environmentally degrading remain those most likely to participate in the REPS. In addition, the results highlight the fact that where no attempt is made to control for unobserved heterogeneity or path dependency the effects of the farm‐ and farmer‐specific characteristics may be overestimated.     

The Driving Forces of Agricultural Decline:A Panel‐Data Approach to the Italian Regional Growth

This paper investigates the causes of the long‐run decline of agriculture during economic growth. Within a two‐sector model, agricultural decline is explained by three basic driving forces (relative price change, Rybczynski effect, and technological gap). In a dynamic (vector autoregression) specification the share of agriculture on gross domestic product the agricultural relative price and the capital intensity are simultaneously determined. The model allows for short‐run adjustments with respect to long‐run equilibrium and for cross‐sectional dependence taking into account interregional linkages. The approach is applied to the panel data set of 20 Italian regions over the period 1951–2002 of intense economic development but still persistent regional disparities. Regularities and differences of decline patterns across regions are investigated. Le présent article examine les causes du déclin à long terme de l’agriculture en période de croissance économique. Dans un modèle à deux secteurs, trois éléments fondamentaux (le changement dans les prix relatifs, l’effet de Rybczynski et l’écart technologique) expliquent le déclin de l’agriculture. Dans une spécification dynamique (VAR), la part de l’agriculture dans le PIB, le prix relatif agricole et l’intensité du capital sont simultanément déterminés. Le modèle permet des ajustements à court terme par rapport à l’équilibre à long terme et permet une dépendance transversale qui tient compte des liens interrégionaux. Ce modèle a été appliquéà un ensemble de données de panel regroupant 20 régions de l’Italie, durant la période de développement économique intense de 1951 à 2002, qui présentait des disparités régionales persistantes. Nous avons examiné les similitudes et les différences des déclins observés à l’échelle des régions.     

Effects of Farm Size on Technical Efficiency in China's Broiler Sector: A Stochastic Meta‐Frontier Approach

This paper employs the stochastic meta‐frontier approach to measure technical efficiency and to investigate the effects of farm size on the technical efficiency in China's broiler sector. Empirical results show a positive association between farm size and technical efficiency in China's broiler sector. The medium and large farm sizes exhibit increases of 0.058 and 0.160, respectively, in technical efficiency scores, relative to small farms, which have a mean technical efficiency score of 0.722. Results indicate that there are significant differences in technical efficiency across regions. Technical efficiency in the southern region, which is dominated by yellow‐feathered broilers, is significantly lower than that in the northern region where white‐feathered broilers are the dominant species. Also, the technical efficiency scores estimated from the meta‐frontier model vary substantially across farm sizes in the southern region. Increased farm size improves the technical efficiency for yellow‐feathered broiler production. Dans la présente étude, nous avons utilisé l'analyse métafrontière stochastique pour mesurer l'efficience technique et pour déterminer les effets de la taille de la ferme sur l'efficience technique du secteur du poulet à griller en Chine. Les résultats empiriques indiquent qu'il existe un lien positif entre la taille de la ferme et l'efficience technique. Les fermes de moyenne et grande taille affichent une augmentation du pointage d'efficience technique de 0,058 et de 0,160 respectivement, comparativement aux fermes de petite taille dont le pointage d'efficience technique moyen est de 0,722. Les résultats indiquent que l'efficience technique varie considérablement d'une région à l'autre. L'efficience technique dans la région du Sud, où l’élevage du poulet à griller blanc domine, est significativement plus faible que celle de la région du Nord, où l’élevage du poulet à griller jaune domine. De plus, les pointages d'efficience technique estimés à partir du modèle de métafrontière varient considérablement dans la région du Sud. L'augmentation de la taille de la ferme améliore l'efficience technique de la production du poulet à griller jaune.     

Bias from Farmer Self‐Selection in Genetically Modified Crop Productivity Estimates: Evidence from Indian Data

In the continuing debate over the impact of genetically modified (GM) crops on farmers of developing countries, it is important to accurately measure magnitudes such as farm‐level yield gains from GM crop adoption. Yet most farm‐level studies in the literature do not control for farmer self‐selection, a potentially important source of bias in such estimates. We use farm‐level panel data from Indian cotton farmers to investigate the yield effect of GM insect‐resistant cotton. We explicitly take into account the fact that the choice of crop variety is an endogenous variable which might lead to bias from self‐selection. A production function is estimated using a fixed‐effects model to control for selection bias. Our results show that efficient farmers adopt Bacillus thuringiensis (Bt) cotton at a higher rate than their less efficient peers. This suggests that cross‐sectional estimates of the yield effect of Bt cotton, which do not control for self‐selection effects, are likely to be biased upwards. However, after controlling for selection bias, we still find that there is a significant positive yield effect from adoption of Bt cotton that more than offsets the additional cost of Bt seed.     

Productivity Growth in German Dairy Farming using a Flexible Modelling Approach

A random‐coefficients specification of an output distance function is used to measure and decompose productivity growth in German dairy farming. This specification can accommodate heterogeneity with respect to the technology employed by dairy farms, allowing for specialised and non‐specialised farms to be included in the analysis. The proposed modelling approach is favoured by the data when compared with the conventional translog specification of distance functions. The average total factor productivity growth rate for German dairy farms is estimated at 1.1%, with the technical progress component contributing most of this growth.     

Farm Level Costs of Agri‐environment Measures: The Impact of Entry Level Stewardship on Cereal Farm Incomes

Applying a difference‐in‐difference approach with propensity score matching, we examine the impact of participation in the Entry Level Stewardship (ELS) scheme on cereal farm incomes in eastern England. We assess the extent to which impacts are related to a) the source of income affected – whether only from agricultural or total business income; b) the channel of the impact – through land use and/or labour input; and c) the level of impacts through time. In addition, we assess the appropriateness of the level of the ELS payment. We find that: a) entering the ELS scheme could negatively affect cereal farm incomes – in particular, the total business income; b) that negative impacts arise primarily in relation to the use of land resources; c) that impacts may diminish over a relatively short period of time; and d) that the ELS payment broadly compensates for losses without providing over compensation. Given the diminishing negative impact over time, the level of ELS payment might need to be reviewed in the longer term, although policy evaluation should consider the wider implications for efficiency of alternative payment levels. We also discuss some limitations of the approach and potential extensions.     

河南省农用地生产能力核算最佳模型选择研究

研究目的:选择河南省农用地生产能力核算的最佳模型类型。研究方法:数据综合法、统计检验法、外延趋势分析法。研究结果:(1)河南省可实现单产调查样点与农用地利用等指数之间的关系并不是目前多数省份采用的线性关系。(2)通过对指数、对数、乘幂、一元二次多项式和线性5种类型模型模拟效率的统计检验和外延性检验发现,一元二次多项式模型更适合河南省农用地生产能力核算。(3)通过验证,一元二次多项式模型的模拟结果数值可信,空间分布规律符合河南省实际。研究结论:农用地生产能力核算模型的选择要建立在对调查数据分布规律探索的基础上,并结合研究区域及模型特点来确定。     

The Role of the Common Agricultural Policy in Enhancing Farm Income: A Dynamic Panel Analysis Accounting for Farm Size in Italy

As a multi-objective policy, the EU Common Agricultural Policy continues to secure significant income support for farmers as one of the nine specific objectives. We estimate the income transfer efficiency of a broad set of pivotal policy measures, focusing on the effects of farm structure on income transfer efficiency. We use dynamic modelling, based on a micro-data panel of Italian farms for the period 2008–2014, allowing for endogeneity, simultaneity bias, and omitted variables. In line with previous studies and economic expectations, we find that decoupled direct payments provide the highest contribution to agricultural incomes, followed by agri-environmental payments and on-farm investment subsidies. Coupled payments have no significant impacts on farmers’ income. Generally, for all analysed Common Agricultural Policy measures, large farms benefit from greater transfer efficiency levels compared with medium and small farms. These differences among instruments and across farms suggest that policy-participation costs may play a pivotal role, together with the economic structure of farms, in determining the income transfer efficiency of CAP policies.     

Estimating the Enduring Effects of Fertiliser Subsidies on Commercial Fertiliser Demand and Maize Production: Panel Data Evidence from Malawi

Most studies of input subsidy programmes confine their analyses to measuring programme effects over a one‐year period. This article estimates the potential longer‐run or enduring effects of fertiliser subsidy programmes on smallholder farm households' demand for commercial fertiliser and maize production over time. We use four waves of panel data on 462 farm households in Malawi for whom fertiliser use can be tracked for eight consecutive seasons between 2003/2004 and 2010/2011. Panel estimation methods are used to control for potential endogeneity of subsidised fertiliser acquisition. Results indicate that farmers acquiring subsidised fertiliser in three consecutive prior years are found to purchase slightly more commercial fertiliser in the next year. This suggests a small amount of crowding in of commercial fertiliser from the receipt of subsidised fertiliser in prior years. In addition, acquiring subsidised fertiliser in a given year has a modest positive impact on increasing maize output in that same year. However, acquiring subsidised fertiliser in multiple prior years generates no statistically significant effect on maize output in the current year. These findings indicate that potential enduring effects of the Malawi fertiliser subsidy programme on maize production are limited. Additional interventions that increase soil fertility can make using inorganic fertiliser more profitable and sustainable for smallholders in sub‐Saharan Africa and thereby increase the cost‐effectiveness of input subsidy programmes.     

Patterns of Rural Development: A Cross‐Country Comparison using Microeconomic Data

This article proposes a general pattern of rural development in which increases in per capita income are associated with a decline in the importance of agricultural production and a rise in the importance of non‐agricultural income sources. Following the approach to examining Engel’s Law, we use data from 15 developing countries and a merged dataset to test whether such a pattern emerges. The analysis shows a strong, positive relationship between per capita income and the share of income earned from rural non‐agricultural wage employment and a negative relationship between per capita income and agricultural production.     

Damage Control Productivity: An Input Damage Abatement Approach

This paper compares the value of the marginal product of three different pesticides from different specifications of the production function. The specifications are the output damage abatement specification proposed by Lichtenberg and Zilberman, a general input damage abatement specification and a traditional production function. These specifications are estimated on panel data of specialised Dutch arable farms over the period 1989–1992, using Generalised Maximum Entropy estimation. Results of the input damage abatement specification show that pesticides have different impacts on individual productive inputs, although statistical evidence is weak. The output damage abatement specification produces statistically more significant relations, but imposes restrictions that are only partly supported by the data. It is also found that estimation of a quadratic traditional production function, that treats damage abatement inputs in the same way as productive inputs, does not lead to over estimation of the value of the marginal product as previous authors have hypothesised.     

Time‐varying Hedge Ratios: A Principal‐agent Approach

We use the classic agency model to derive a time‐varying optimal hedge ratio for low‐frequency time‐series data: the type of data used by crop farmers when deciding about production and about their hedging strategy. Rooted in the classic agency framework, the proposed hedge ratio reflects the context of both the crop farmer's decision and the crop farmer's contractual relationships in the marketing channel. An empirical illustration of the Dutch ware potato sector and its futures market in Amsterdam over the period 1971–2003 reveals that the time‐varying optimal hedge ratio decreased from 0.34 in 1971 to 0.24 in 2003. The hedging effectiveness, according to this ratio, is 39%. These estimates conform better with farmers’ interest in using futures contracts for hedging purposes than the much higher estimates obtained when price risk minimisation is the only objective considered.