Economic growth,convergence, and agricultural economics

After nearly two centuries of lagging behind the industrial countries, growth in many developing countries has surged since the early 1990s. This outperformance has major implications for almost all areas of agricultural economics and, if continued, will likely do so into the future. This article aims to identify the key ways in which the changes in rich and poor country growth rates matter for agricultural economists, as a basis for formulating better research agendas. A key impact arises through sharp increases in demand for agricultural resources as demand for livestock products increases. This changing structure of food demand has important implications for nutrition studies and policies, with the emergence of a double burden of malnutrition. On the supply side, growth in developing countries tends to increase domestic food supply, which is also boosted by increases in research and development spending. Growth in developing countries both stimulates and benefits from increases in infrastructure investment, evaluation of which requires new analytical tools. Negative impacts include the contribution of increased demand for livestock products to global greenhouse gas emissions. In terms of trade policy, growth in developing country is tending to lead to convergence of agricultural policies with the pattern of assistance seen in today's developed countries, raising concerns about the future need to deal with collective action problems, particularly those that increase the volatility of world prices.     

Information,efficiency, and welfare in agricultural markets

Information and communications technologies (ICTs) have spread rapidly in the developing world. There has been considerable interest in the potential role ICTs, particularly mobile phones, have begun to play in the marketing of agricultural outputs in these countries. In this article, we discuss the potential impacts ICTs may have on welfare, both in terms of potential efficiency gains (via improved arbitrage), and welfare transfers among agents in the supply chain (via reduced informational asymmetries and market power). We also review the recent empirical evidence for such effects.     

The Impact of Seed Policy Reforms and Intellectual Property Rights on Crop Productivity in India

The growth of private investment in developing‐country agriculture, new advances in the biological sciences, and rapid integration of developing countries into the global trading system has heightened interest in the topic of seed market and intellectual property rights’ (IPRs) policies among public policy‐makers, corporate decision‐makers and other actors in the agricultural sector. But there are still unanswered questions about whether emerging and evolving seed policy reforms and IPR regimes in developing countries will contribute to increasing crop productivity and improving food security. This paper attempts to answer some of these questions by focusing specifically on the case of India, the regional leader in implementing seed policy reforms and IPRs in agriculture. Findings indicate that maize and pearl millet yields grew significantly during the last two decades due partly to the combination of (1) public policies that encouraged private investment in India’s seed industry during the 1980s, and (2) biological IPRs conferred by hybridisation that conveniently married the private sector’s need for appropriability with the nation’s need for productivity growth. Although past lessons are not an indication of future success, this convergence of policy solutions and technology opportunities can be replicated for other crops that are vital to India’s food security.     

The fourth industrial revolution,agricultural and rural innovation,and implications for public policy and investments: a case of India

The Indian Government and public–private partnerships are developing and disseminating a dizzying number of innovative, networked solutions, broadly known as the Digital India initiative, to increase the efficiency of safety nets and worker productivity and to improve life. Yet, challenges to turn the power of information and other technologies into a farmer‐friendly technological revolution for India's 156 million rural households are considerable, including: (1) reliable, up‐to‐date, location‐specific message content for a diverse agriculture to help stratified households shift to productive, knowledge‐intensive agriculture as a business—government, private sector, and civil society have big roles to play; (2) digital literacy, i.e., teaching farmers how to choose and use apps, even where the digital divide is absent; apps are, or soon to be, in regional languages; and (3) monitoring actual use and impacts on users’ lives by understanding the adoption and adaptation processes. These challenges call for bottom‐up, complementary investments in physical, human, and institutional capital, and farmer‐friendly e‐platforms, while forging ahead with many top‐down policy and institutional reforms currently underway, in which progress is real and constraints holding back greater success are better understood.     

Geography of plant breeding systems,agroclimatic similarity,and agricultural productivity: evidence from Nigeria

Agroclimatic conditions and agricultural research and development (R&D) including plant breeding activities by the public sector are some of the most significant exogenous factors in the agricultural sector. However, the effects of the interactions between these two sets of factors on agricultural productivity have not been studied widely in developing countries, despite potentially important implications on their plant breeding strategies. Using three‐wave panel data of agricultural households in Nigeria and spatial data on various agroclimatic parameters, we show that agricultural productivity and technical efficiency at the agricultural household level is significantly positively affected by the similarity of agroclimatic conditions between locations where agricultural households are located, and locations where major plant breeding institutes are located. These results hold after controlling for various socioeconomic characteristics of these households, including their physical distances to the breeding institutes. Findings are robust across parametric and nonparametric specifications such as Data Envelopment Method, and after addressing potential endogeneity of agroclimatic similarity and agricultural inputs variables in the production function. Productivity effects due to the locations of plant breeding institutes and resulting agroclimatic similarity can be potentially sizable given Nigeria's past productivity growth speed.     

Human behavior and the use of experiments to understand the agricultural,resource, and environmental challenges of the XXI century

The use of laboratory¹ experiments in economics, and their later deployment in the field as a tool for exploring how actual decision‐makers respond to information, incentives or institutions has brought a revolution to how we model economic systems, and design policies for them. This new century will bring challenges for the study of agriculture, natural resources and the environment, where it will be necessary to have a better understanding of human behavior, in a world where climate on the one hand, and land, labor and food markets are ever more unstable. This article reviews the intellectual history of a rich dialogue between theory and experiments with a particular focus on its relevance for agricultural, resource and environmental issues. Special attention will be given to the case of common‐pool resources where this dialogue between models, field work and laboratory experiments continues to provide a rich cross‐fertilization for the advance in the understanding of the economic systems that governs these resources. I will close by arguing that agricultural, environmental and resource economists will have to take part of this behavioral revolution by embracing experiments in their teaching, their research and their policy design.     

China’s Agricultural Policy Transition: Impacts of Recent Reforms and Future Scenarios

This article reviews recent developments in China’s agricultural domestic support policy, especially the transition from taxing farmers and agriculture to providing direct subsidies to grain production and purchased inputs. A model‐based quantitative analysis on the effects of these policy changes is presented. Simulation results suggest that recent policy changes have achieved the declared policy goals of increasing grain production and boosting farm income. Much of the increase in grain production and farm income can be attributed to higher per unit return to arable land, land reallocation to grain production and extra agricultural employment triggered by the policy changes. Based on the assumption that China’s public assistance to agriculture and farmers will continue and rise, two hypothetical future scenarios are simulated. Using all the support permitted under WTO de minimis limits with existing instruments, China’s policy will increase grain production, change trade patterns seemingly contrary to China’s comparative advantage, increase rural employment and significantly increase farm income (by more than 12%). If, however, decoupled instruments are applied to raise China’s agricultural domestic support to the same level, China’s agricultural production and trade will remain unchanged, rural employment remain stable, but farm income will be increased by nearly 15%.     

Navigating the perfect storm: reflections on the food,energy, and financial crises

The closely interlinked food, energy, and financial crises pose a significant new challenge to the global effort to reduce poverty. In 2008, food prices rose sharply in many countries, and global poverty and hunger levels increased quite markedly. The good news is that the agricultural supply response in many countries was also strong. The impacts of the financial crisis on poor countries have yet to fully roll out, but it is clear that more people have fallen into poverty and more are suffering from hunger. Lastly, there are strong indications that the global food system is fundamentally changing in a number of dimensions. Biofuels are here to stay, and energy and food prices appear to have adjusted to a higher equilibrium and will in turn raise the prospects of renewed volatility in agricultural commodity markets. Trade protection has also resurfaced, but so have renewed investments in agriculture. These fundamental shifts bring with them opportunities and risks that require internationally coordinated responses with strong national buy‐in, as well as timely and relevant research.     

Food Standards and Welfare: General Equilibrium Effects

We analyse the general equilibrium effects of the growth of high standard food chains on household welfare. To measure structural production changes and welfare effects on rural and urban households, our model has two types of agents, five kinds of products and four types of factors. We calibrate the model using a Chinese dataset. The simulation results show that the effects on poor rural households depend on a variety of factors, including the nature of the shocks leading to the expansion of high standard sector, production technologies, trade effects, spillover effects on low standard markets, factor market constraints and labour market effects.     

Some Economics of Public Statistics

Public statistics are an important part of the information needed for efficient and effective agricultural and rural policy. Experience of several decades of work at the interface of statistics and policy, in particular on income measurement in agriculture, suggests that there are systematic failures in the process by which statistics are fed into policy decisions, although their nature and extent can be expected to vary across types of policy. These failures include poor recognition of the need for information and conceptual obsolescence in methodologies. The explanations for these failures are likely to include the unwillingness of policy‐makers to articulate their objectives clearly, various interests in not having better statistics, the limited independence of agricultural statisticians from departments responsible for policy, and the low level of engagement by academics. Ways of improving the situation are explored.     

Economics and politics of food standards,trade, and development#

Standards have played an important role in food trade for a very long time. Their rapid growth in recent years has triggered vigorous debates on their impacts on international trade and development, with many arguing that standards are “non‐tariff barriers” to trade and that standards are marginalizing the poor. I present conceptual frameworks and review empirical evidence on the equity and efficiency effects and the political economy of standards. Models which incorporate essential aspects of standards yield complex theoretical results and nuanced conclusions. Careful empirical analyses support such nuanced arguments and find complex effects. For trade, standards can create welfare gains but also involve rent redistribution which induces lobbying by interest groups to set the standards at their preferred level. This makes it difficult to distinguish socially desirable standards from those resulting from political rent‐seeking. For development, it is crucial to explicitly account for (a) the endogeneity of the institutional organization of value chains and (b) both smallholder contracting and employment creation on large scale farms when considering the impact of standards on development and poverty.