Are agro-clusters pro-poor? Evidence from Ethiopia

Governments and development agencies increasingly promote agro-clusters as a pathway to improving smallholder incomes and ensuring inclusive rural development through mitigating production and market risks. However, there is very limited empirical evidence to support this promise. We use a large farm household survey of about 4000 smallholder farmers in Ethiopia growing cereals like teff, maize, wheat, maltbarley and sesame to examine the relationship between agro-clusters and smallholder welfare and poverty. Using instrumental variable estimators, we establish a positive association between agro-clusters, household income and per capita income. Agro-clusters are also shown to reduce poverty and poverty gaps. Our results are robust over different agro-cluster proxies and alternative estimators, such as the augmented inverse probability weighting estimator. We also show that our findings are unlikely to be driven by omitted variable bias. Moving beyond average effects and in the interest of understanding heterogeneous effects, we use quantile regressions at different income levels. We find that agro-clusters are associated with welfare gains for all households. However, the most significant gains are observed for the wealthier households. Despite this regressive association, our findings suggest that agro-clusters may be useful in making farming more profitable with significant welfare implications.     

Are we overestimating the negative impact of higher food prices? Evidence from Ghana

Most studies of the welfare impact of higher food prices adopt Deaton's approach, based on the first‐order effect of prices changes using income and expenditure survey data. This paper explores the impact of higher maize and food prices in Ghana and considers the sensitivity of results to changes in several assumptions. If second‐order effects are included, incorporating household response to price changes, the welfare impact of food price increases is more positive, but only modestly so. However, if we assume that marketing margins are constant in real terms rather than proportional to prices, the welfare impact is substantially more positive. These findings highlight the need for more research on the behavior of marketing margins under volatile prices.     

Deregulation of the Australian Wheat Export Market: What Happened to Wheat Prices?

ABSTRACT

This report investigates whether deregulation of the Australian wheat export market induced a structural change in the price data generation process. We analyze the unit root properties of Western Australian wheat price series by testing for the possibility of single and double structural breaks. Daily spot prices for the period of May 20, 2003, to September 14, 2010 are used. We find the wheat price series has a unit root with two structural breaks but neither breaks coincides with the time when the Wheat Export Marketing Act 2008 came into effect on July 1, 2008. The implication of our results is that deregulation was not the main cause of structural breaks in the price series in the sample period.     

Higher Intensity,Higher Profit? Empirical Evidence from Dairy Farming in New Zealand

Over the last two decades there have been significant and well‐documented changes in the nature and structure of New Zealand dairy production. One particular feature has been a marked shift in the ‘input intensity’ of dairy farming systems through increased use of supplementary feed. These changes have generated debate about the impact of dairy farm intensity on the performance of farm businesses and the competitiveness of the New Zealand dairy sector. Using a novel econometric approach, we assess statistically the impact of three types of dairy farming systems on milk production and financial performance, using farm business data provided by DairyBase^®. Our empirical results show that higher input systems perform significantly better physically than lower input systems, but not financially. The disaggregated analysis suggests that the average treatment effects differ by region and performance quantiles.     

Is off-farm income reforming the farm? Evidence from Mexico

Does access to off-farm income complement or compete with agricultural production? This article explores the effect of off-farm income on agricultural production activities, using data from the 2003 Mexico National Rural Household Survey. We first discuss the theoretical conditions under which access to off-farm income may influence production in an agricultural household model. Instrumental-variable (IV) estimation methods are then used to test whether agricultural production activities, technologies, and input use differ between households with and without access to off-farm income. We find that off-farm income has a negative effect on agricultural output and the use of family labor on the farm, but a positive impact on the demand for purchased inputs. There is also a slight efficiency gain in households with access to off-farm income. Findings offer insights into how household production evolves as rural households increasingly engage in off-farm income activities.     

Can the Internet improve agricultural production? Evidence from Viet Nam

This paper aims to contribute to the growing literature on the potential benefits of the Internet on rural livelihoods. We estimate the relationship between Internet access and agricultural production in rural Viet Nam using a panel dataset from 2008–2012. This is a time span during which Internet access increased substantially and government‐run and private online outlets providing information about agriculture started to operate. Our findings suggest that Internet access is associated with a 6.8% higher volume of total agricultural output. We find that this result is manifested through more efficient use of fertilizer. Our findings are stronger for younger households. The less developed northern provinces have benefited the most from the arrival of the Internet. The results are weaker in the case of rice, which is related to strong government involvement in rice production and prices.     

Are In‐House and Outsourcing Innovation Strategies Correlated? Evidence from the European Agri‐Food Sector

We analyse European agri‐food firms’ choices about innovation in‐house or through outsourcing and provide empirical evidence about the correlation between these strategies. The relationship between the innovation strategy and firm‐, industry‐ and innovation‐specific characteristics is analysed through a bivariate probit model, which uses firm data from the EFIGE Bruegel‐UniCredit dataset. Transaction cost, resource base and knowledge governance arguments are used to explain the choice of innovation strategy. Our results show that the decisions to innovate in‐house or through outsourcing are independent from each other. In addition, we find that several organisational characteristics such as communication systems, human resource practices and specialisation are likely to influence both strategies. Conversely, organisational characteristics such as the allocation of authority and the business network do not seem relevant in determining the innovation strategies of the European agri‐food sector.     

Do Farmers and the Environment Benefit from Adopting Integrated Pest Management Practices? Evidence from Kenya

We estimate the impacts of a bundle of integrated pest management (IPM) practices on mango yield, mango net income, insecticide use, human health and the environment, using recent household survey data of mango growers in Kenya. We employ a multinomial endogenous switching treatment regression model with an ordered probit selection rule to establish counterfactual outcomes. Our results indicate that IPM‐adopting farmers have higher mango yields and mango net income, and also use lower quantities of insecticide and cause less damage to the environment and to human health. In addition, switching from one IPM to multiple IPM practices generates greater economic, environmental and human health benefits. These results suggest intensification of IPM‐adoption efforts and encouragement of the use of multiple IPM practices. These positive outcomes could be achieved through greater provision of technical support and extension services to farmers.     

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.     

Have coffee producers benefited from the new domestic cherry market? Evidence using panel data from Rwanda

The article assesses the effects of the new domestic cherry market on coffee‐growing households in Rwanda using panel data. Findings from combined first differenced with instrumental variable specification and other estimation methods provide evidence that farmers who sell to the cherry market do not increase their expenditures compared to farmers selling to the traditional parchment market. The different time lags in terms of when farmers started selling to the new cherry market may explain the lack of statistically significant differences across the two groups. It is possible that farmers will adjust their expenditure patterns in subsequent periods after year‐over‐year market trends become more apparent to them.     

Is public investment complementary to private investment in Indian agriculture? Evidence from NARDL approach

The issue of complementarity between public farm investment and private farm investment in Indian agriculture is an unsettled empirical question in the literature, which has not been studied adequately. Few studies analyzing the trends of both types of investments have produced contradictory results. Thus, this study attempts to bridge that gap, by examining the hypothesis of crowding‐in/crowding‐out effect of public sector investment on private investment. Time series data for a period of 45 years from 1971 to 2015 has been used. Adopting a ‘nonlinear auto‐regressive distributive lag’ (NARDL) model the study confirms a strong crowding‐in effect of public investment on private investment in short run, but relatively a weak complementarity between the two over long‐run. Moreover, the public canal intensity as a major component of public investment has been observed to have much stronger effect on private investment than the public investment itself. It is also found that private investment is constrained by its own lagged values, institutional credit and terms of trade during both short‐run and long‐run. The policy suggestion of this study calls for an immediate arrest of declining trend of public investment.     

Does having more children increase the likelihood of parental smoking? Evidence from Vietnam

Evidence has shown that parental smoking can cause health problems for children. It might be expected that parents who are aware of the harmful effects of second-hand smoke will reduce their smoking, especially as they have more children. However, based on instrumental variable regressions using data from the 2006 and 2008 Vietnam Household Living Standard Surveys, we find a strongly positive and significant effect of the number of children on the probability of tobacco smoking in households in Vietnam. An additional child increases the probability of tobacco consumption in the household by approximately 15%. These findings imply low levels of awareness of the harmful effects of second-hand smoke on children’s health in Vietnam, and indicate the need for policy action to disseminate knowledge on the harmful effects of smoking.     

How Might Shadow Price Restrictions Reduce Technical Efficiency? Evidence from a Restricted DEA Analysis of Coffee Farms in Vietnam

We use data from smallholder coffee farms in Vietnam to measure the technical efficiency of coffee producers, and the degree to which potential restrictions on the shadow prices of chemical inputs might reduce overall efficiency among these farmers. Using input‐oriented data envelopment analysis (DEA) we find the use of pesticide and herbicide accounts for a relatively small proportion of overall technical efficiency in the sample. We place restrictions on input shadow prices and show that restricting their importance does not dramatically alter patterns or measures of short‐run efficiency.     

Are maize marketers averse to quality loss in supplies? A case study from Ghana

To ensure sustainable post‐harvest loss reduction, markets that are averse to quality loss and provide incentives for farmers to supply high quality produce are crucial. Such markets will be averse to quality loss, offering distinct prices and substantial rewards to farmers for the supply of quality produce. Farmers in sub‐Saharan Africa (SSA), where informal markets exist, have often assessed the rewards for the supply of quality produce as inadequate. Hence, this study investigates if intermediary buyers are actually indifferent to quality loss in supplies based on two scenarios—the informal market scenario and a hypothesized grade scenario. The analysis builds on survey data from marketers in two informal maize markets in Ghana. For the hypothesized grade scenario, random effect regression was used to examine the influence of marketer‐specific characteristics on premiums offered to farmers over different quality levels. The findings suggest that although informal markets seem not to adequately value loss reduction, investing in institutional infrastructures, such as grades and standards can change this. Furthermore, interaction among marketers and association participation positively influences the value marketers place on quality loss reduction. The result highlights the importance of standard grading systems and collaborating with market groups in minimizing quality loss.     

Does the Decoupling Reform Affect Agricultural Employment in Sweden? Evidence from an Exogenous Change

This study uses aggregated municipality data, for the years 2001–2009, to explore whether direct payments to farmers affect agricultural employment in Swedish municipalities. The decoupling reform in 2005 included a new grassland support payment accompanied by management obligations that had unexpectedly high redistributive consequences as it greatly increased common agricultural policy payments to municipalities with large areas of grassland. In some municipalities, total payments more than doubled. Thus, since the reform seems exogenous to the behaviour of farmers and the regional economy, the reform can be used to identify a subsidy effect. We find that a permanent increase in agricultural employment can be attributed to the new grassland support. Our results indicate that the grassland support generates an additional job at a cost of SEK 250,000, relative to the average agricultural wage of SEK 333,000. However, the subsidy effect is largely keeping jobs in agriculture, i.e. the grassland support may be slowing down the process of structural change in grassland regions.     

Are existing soils data meeting the needs of stakeholders in Europe? An analysis of practical use from policy to field

Soils form a major component of the natural system and their functions underpin many key ecosystem goods and services. The fundamental importance of soils in the environment means that many different organisations and stakeholders make extensive use of soils data and information in their everyday working practices. For many reasons, stakeholders are not always aware that they are reliant upon soil data and information to support their activities. Various reviews of stakeholder needs and how soil information could be improved have been carried out in recent years. However, to date, there has been little consideration of user needs from a non-expert perspective. The aim of this study was to explore the use of explicit and hidden soil information in different organisations across Europe and gain a better understanding of improvements needed in soil data and information to assist in practical use by non-expert stakeholders. An on-line questionnaire was used to investigate different uses of soils data and information with 310 responses obtained from 77 organisations across Europe. Results illustrate the widespread use of soil data and information across diverse organisations within Europe, particularly spatial products and soil functional assessments and tools. A wide range of improvements were expressed with a prevalence for finer scale resolution, trends over time, future scenarios, improved accuracy, non-technical supporting information and better capacity to use GIS. An underlying message is that existing legacy soils data need to be supplemented by new up-to-date data to meet stakeholder needs and information gaps.     

How land transfer marketization influence on green total factor productivity from the approach of industrial structure? Evidence from China

Market-oriented allocation of land resources is one of the main economic reforms in China. However, the influence of land transfer marketization (LTM) on green total factor productivity (green TFP) and its mechanisms remain unknown. Based on panel data of 30 provincial administrative regions in China from 2004 to 2016, this study attempts to establish mechanism among LTM, industrial structure and green TFP, which is measured by the Slack Based Measure DEA (SBM-DEA) model containing undesirable output, and empirically estimates the impact of LTM, the rationalization and optimization of industrial structure and their interactions on green TFP further. The results show that: 1) LTM has a significant promoting effect on the improvement of green TFP in China, and the effect is also significant in the eastern, central and western regions as well, indicating that the application of land transfer policy to regulate regional economic development is widespread in China. 2) The rationalization of industrial structure has significantly promoted the development of green TFP in China, as well as at the regional levels, and the effect decreases from the western region to the central and eastern regions. The optimization of industrial structure also has a promoting effect on green TFP in China and all the regions, but the regional differences of the effect are contrary to that of the rationalization of industrial structure, with a decreasing trend from the eastern region to the central and western regions. 3) The interaction between LTM and the rationalization of industrial structure has significantly inhibited the improvement of green TFP in China, and the regional variations of the restraining effect are higher in the western region, followed by the central and eastern regions. The interaction between LTM and the optimization of industrial structure also has a negative effect on green TFP in China, and the regional variations of the effect showing the decreasing trend from the eastern region to the western and central regions. Therefore, China should continue to adhere to the market-oriented urban land transfer system reform, actively play the role of the government in the industrial upgrading and industrial transfer, and formulate a differentiated land transfer system and industrial development policies based on the economic development and industrial characteristics of various regions, so as to achieve the sustainable development of China’s economy and society.     

Are capacity deficits in local government leaving the Amazon vulnerable to environmental change?

The last 20 years have seen remarkable progress in monitoring and modelling environmental change in the Amazon region. As a result, scientists and policy makers now have robust and spatially explicit knowledge and forecasts of critical phenomena such as deforestation and bioclimatic uncertainty. However, whether this knowledge is used to support the implementation of policies and initiatives to cope with environmental changes in the Amazon depends on the ability of the political institutions to proactively integrate the scientific evidence into land planning at multiple spatial scales. In Brazil, municipalities are constitutionally responsible for legislating on land planning and therefore have a power to significantly influence the future trajectory of environmental change. Here, we assess the environmental capacity of municipalities in the Brazilian legal Amazon based on data from a self-assessment survey and from the Brazilian Institute of Geography and Statistics database. Municipalities generally have a low level of institutional capacity and there is no evidence that the municipalities most at threat from environmental change are taking proactive measures to reduce their vulnerability. We argue that structural reforms and capacity raising initiatives are urgently needed, especially in smaller, less economically developed municipalities located in areas at high risk of imminent environmental change.     

Do native and invasive labels affect consumer willingness to pay for plants? Evidence from experimental auctions

Ornamental plant sales have been identified as an important vector for the introduction of invasive plants. Increased concerns about the economic and ecological costs of invasive plants have spawned interest in identifying strategies to curtail introductions. One possible strategy is labeling plants based on whether they are invasive or native. The primary purpose of this paper was to explore how labeling plants based on invasive and native attributes might affect consumer demand. To accomplish this objective, a second price auction was used to elicit the willingness to pay (WTP) for plants with and without labels. On average, we found a $0.35 premium for plants labeled as noninvasive and native and a $1.01 to $1.66 discount for plants labeled as invasive. The size of these premiums and discounts differed in relation to various demographic, attitudinal, and preference‐related factors. Overall, our results suggest that labeling plants as invasive or native could be a viable strategy for reducing the introduction of invasive plants.