Cost Structure and Performance of Prairie Grain and Oilseed Farms

The views expressed in this paper are those of the authors and do not necessarily represent the views of Agriculture Canada     

Alternative Policy Instruments for Agriculture Support: Consequences for Trade, Farm Income and Competitiveness

The views expressed are solely those of the authors and should not be attributed to the Organisation for Economic Co-operation and Development or Agriculture and Agri-Food Canada.     

Effects of Product Origin and Selected Demographics on Consumer Choice of Red Meats

A multinomial nonlinear nested logit model is used to test data from a stated preference questionnaire to examine the potential effect of identified product and consumer characteristics on the probability of afresh meat product being purchased. The target market of the study is western Canada, and the questionnaire is directed to randomly selected households in major cities in this region. Fresh beef products from Alberta are generally preferred by these consumers over fresh beef products from other parts of Canada. For pork, consumers are indifferent between products of Alberta and those of other Canadian origin. However, fresh beef and pork products from Canada are preferred to products from the United States. The results support origin branding of Alberta beef, but not Alberta pork. Consumer age, household income and family size all have an effect on meat choices.     

An Economic Assessment of the Significance of Long-Range Transported Air Pollutants for Agriculture in Eastern Canada

This paper is based upon a report prepared by the author for Agriculture Canada and Environment Canada. The views expressed in the paper are those of the author. I am indebted to Thomas Crocker for discussions on the subject matter. Comments of the reviewers of this journal proved useful in drafting the present version.
This paper surveys, collates and interprets information from the scientific literature pertaining to the agricultural impacts of long-range transported air pollutants (acid deposition and ozone) in Eastern Canada in order to provide a preliminary assessment of their economic significance. While most crop scientists believe that Ozone is the major air pollutant causing damage to a number of crops in Eastern Canada, in terms of economic impacts, acid deposition may be considerably more important if the Lee and Neely (1980) corn yield-loss estimate of 9 percent is correct. Agricultural soils receive a net economic benefit from acid deposition because of the sulphur input which is a fertilizing agent; however, this is small ($2.6 million) compared to the possible direct corn crop damage ($105 million) attributable to acid deposition.     

Investment and Productivity in Canadian and U.S. Food Manufacturing

A restricted cost function model of Canadian and US. food manufacturing shows that productivity growth rates in Canada have remained well below those in the United States for the past decade and a half_: At mean factor prices, output, and capital quantities, processing costs would be 22% lower in the U.S. than in Canada. Technical change in both countries has been labor-saving and material-using, although slightly more so in the US. than in Canada. The labor-saving bias of technical improvements puts Canada at a disadvantage to its southern neighbor, since food manufacturing wages in Canada tend to be lower and material prices higher than in the United States. Enhancing its competitiveness will require that Canada reduce raw food and packaging costs or invest more in research and development .
L'estimation d'une function constraint de coût démontre que le taux de productivité du secteur de la transformation des aliments et boissons au Canada est demeuré inférieur à celui des Etats-Unis depuis une quinzaine d'années. En effet, à la moyenne du prix des intrants, du stock de capital et de la quantité produite, le coût de production américain est de 22 % inférieur à celui du Canada. Dans les deux pays, le changement technologique a permis de substituer le matériel à la main-d'oeuvre, et ceci de façon plus prononcée aux Etats-Unis. En bout de ligne, ceci désavantage le secteur canadien des aliments et boissons puisque les salaires sont généralement inférieurs au Canada alors que le matériet est plus coûteux. Le Canada pourrait améliorer sa compétitivité face aux Etats-Unis en réduisant le prix des denrées et des entrées intermédiaires ou en augmentant l'investissement dans la recherche et le développement .     

The Crow Rate Issue: A Retrospective on the Contributions of the Agricultural Economics Profession in Canada

The Crow rate policy issue is finally being put to rest. It has been a major agricultural policy issue in Canada over the past 20 years, and agricultural economists should have had a great deal to contribute to the policy debate. The contribution of the profession is critically assessed. While much of the research undertaken was of high quality, the profession's aggregate contribution was much less than what might have been possible. A number of shortcomings of the research system are identified, and some lessons for researchers and those who fund research are provided.     

Price or politics? An investigation of the causes of expropriation*

Expropriations of foreign direct investment in developing countries are typically blamed on political and economic crises in those countries. Developing a new database of expropriations in the minerals sectors of developing country exporters, I show that expropriations were correlated with mineral price booms and that democratic governments were more likely to expropriate. No link is found between expropriations and political or economic crises, except at independence. A better explanation of expropriation would be opportunistic behaviour by host governments when profits of investments are high. In two developed countries, Australia and Canada, expropri‐ations are also found to occur during price booms.     

Simultaneous Estimation of Cost and Distance Function Share Equations

The study considers the simultaneous estimation of share equations using cost and distance functions. Simultaneous rather than single system estimation utilizes full as opposed to limited information. Econometric results exploit the nonstationary nature of the data and that variables are cointegrated. Under cointegration all variables are endogenous and so it is not necessary to undertake the somewhat ad hoc exercise of choosing instruments to achieve parameter consistency. Johansen's maximum likelihood estimator is applied to data from Central Canada and Western Canada (1935–2006). Symmetry and homogeneity restrictions are not rejected for either region. Monotonicity held for all data points and concavity held at 92% of the data points. Long‐run constant returns and Hicks neutral technological change are rejected for both regions. Morishima elasticity estimates coming from the cost function in Western Canada indicate highly elastic long‐run substitution between the land/fertilizer input pair and mildly elastic long‐run substitution between land and both machinery and labor. In contrast, substitution for land and other inputs is inelastic for the land/machinery pair and the land/labor pair, with only the land/fertilizer pair being mildly elastic. The results indicate the limiting nature of land as a fundamental constraint on long‐term agricultural production is a real possibility in Central Canada because other inputs are inelastic, or at best only mildly elastic, substitutes for land. In Western Canada, fertilizer is the only factor that is highly substitutable for land and, therefore, could mitigate the limiting nature of land in that region. However, given that fertilizer applications are often considered to be environmentally unfriendly, the long‐run substitution of fertilizer for land as a fundamental mitigating factor to land scarcity in Western Canada is at a cost to the environment.     

Factors Affecting Spring Wheat Variety Choices: Comparisons between Canada and the United States

The demand for high-quality hard wheats has been increasing in the 1980s and 1990s. In this article, factors affecting the varieties planted of hard red spring wheat in Canadian producing regions and North Dakota are compared. Differences exist in the development and release of varieties, which affect the supply and quality of hard wheats produced. Wheat areas in the Canadian provinces are more con- centrated in the top variety than those in North Dakota. However, in recent years, there appears to be a tendency toward increased varietal concentration in North Dakota and less in Canada. Econometric models are developed to compare and contrast factors affecting variety choice. In Canada, agronomic factors including relative yields are significant variables affecting variety choice. In North Dakota, agronomic factors generally have less effect on adoption rates, but economic variables are important. Varieties in North Dakota and Manitoba have shorter life cycles and reach their maximum utilization by farmers earlier than in Alberta or Saskatchewan. The longer varietal life cycles and higher concen- tration of the dominant variety suggest end-use variability should be lower in Canada than in North Dakota. La demande de blé vitreux de haute qualité s'accroît depuis une vingtaine d'années. Nous comparons id lesfacteurs déterminant le choix des variétés de ble deprintemps roux vitreux dans les régions canadiennes de production et au North Dakota. On observe, dans les modalités de création et de mise au commerce des variétés, des différences qui influent sur l'offre et sur la qualité des blés produits. Ainsi au Canada, les surfaces emblavées dans la variété la plus recommandée étaient plus concentrées qu'au North Dakota, bien que, ces dernières années, la tendance semble s'inverser. Des modèles économétriques ont été construits pour comparer et confronter les facteurs jouant sur le choix variétal. Au Canada, lesfacteurs agronomiques, notamment les rendements relatifs, ressortaient comme les variables significatives du choix variétal, alors qu‘au North Dakota leur importance était secondaire à celle des variables économiques. Les variétés adoptées au North Dakota et au Manitoba avaient un cycle de vie plus court et atteignaient leur sommet d'utilisation plus vite qu‘en Alberta ou en Saskatchewan. La plus longue durée du cycle de vie des variétés et les plus fortes concentrations de la variété dominante indiquent que la qualité du grainproduit devrait être mains variable au Canada qu'au North Dakota.     

Interdisciplinary Agricultural Research in Canada

The activities and accomplishments of agricultural economists conducting interdisciplinary research in association with other agricultural scientists in Canada are reviewed and evaluated. Agriculture and Agri-Food Canada instituted an interdisciplinary research program with the placement of agricultural economists at Research Centres in the early 1970s. University- and government-employed agricultural economists have produced a large number of important studies for the benefit of the agricultural industry in Canada. However, less than 3% of the articles published in this journal since its inception in 1952 report on interdisciplinary research. Interdisciplinary research in agriculture has been hampered by organizational weaknesses and inherent difficulties associated with conducting this type of research.     

Land use planning in Canada: An overview of the forestry aspects

Forested land occupies 44% of Canada. Forestry activities contribute more to the balance of payments than the combined total trade of farm products, food, beverages, metals and the auto industries. Despite the significance of forestry in the federal and provincial economies of Canada, forest and land use planning strategies have not played a major role until very recently. Traditionally, Canada's forests were regarded as limitless, requiring no skills other than to manage logging and roadbuilding operations. Today land use planning strategies have recognized the need for reliable data about the forest, and forest land tenures in Canada are being (or have recently been) revised in most provinces.     

An Analysis of Removal of Agricultural Trade Barriers between the United States and Canada with Emphasis on the Southeast

A four-region, 23-commodity small world agricultural trade liberalization model within the SWOPSIM framework is used to measure the impact of tariff removal between the United States and Canada. The tariffs are simply defined as negative import subsidy equivalents in the model and are then removed from the trade prices. The model recalculates domestic supply and demand levels in all regions, rebalancing world trade, production, consumption and prices. In summary, the impacts of the Canada-U.S. Trade Agreement on selected commodity groups are significant. Canadian imports of beef and veal, poultry meat, soybean oil and fresh strawberries increase. Furthermore, the results indicate larger trade flows for selected products and declines in producer and consumer prices in Canada, U.S. and Southeast regions. Since the U.S. share of Canadian agricultural imports averaged 60% in the 1980s, the impact of trade liberalization will be greater in Canada in selected commodities than in the U. S. or the southeastern region, and Canadian dependence on the U.S. market will be increasing in the future. The tariff phaseout, together with a reduction in nontariff barriers and harmonizing of domestic agricultural policies, will create more export opportunities in selected commodities for both the United States and Canada, and will create the world's largest free trade market.     

Consumer Willingness to Pay for Dairy Products With the 100% Canadian Milk Label: A Discrete Choice Experiment

ABSTRACT

A component of the supply management policy governing the Canadian dairy sector is a requirement that all milk and cream sold in Canada be sourced from Canadian producers. Cheese, yogurt, and ice cream, however, can be made using imported milk components. Recently, the Dairy Farmers of Canada launched a 100% Canadian Milk label for products that contain only milk and milk ingredients produced in Canada. Featuring a discrete choice experiment, a Canada-wide survey of dairy consumers is used to elicit their willingness-to-pay for milk and ice cream carrying the 100% Canadian Milk label. The results show that Canadian consumers are willing to pay more for milk and ice cream products that carry the label. Consumer knowledge of the dairy sector affects their willingness to pay for this labeling information. Implications for the use of the Canadian origin label and suggestions for further research are discussed.     

Consumer Demand Analysis at Agriculture Canada — Past and Future

This paper traces the development of consumer demand analysis at Agriculture Canada for the period 1972 to 1982 and identifies areas for future work. The objectives of this exercise are threefold: (I) to assess existing empirical results, emphasizing problems in specifying, estimating and evaluating alternative models; (2) to make the benefit of the Canadian experience available to applied researchers in Canada and other countries who are investigating the structure of consumer demand; and (3) to provide perspective for future analyses of consumer demand.
Cet article retrace le développement de l'analyse de la demande des consommateurs de 1972 à 1982 à Agriculture Canada el ètahlit les champs d'intérét du travail à venir. Le but de cette mise en perspective se divise en trois: (1) évaleur les résullats empiriques déjà obtenus en mettant l'accent sur la spécificiation, l'estimation et l'évaluation de modeles de remplacement, (2) rendre les avantages de expérience canadienne disponible aux specialistes de la recherche appliquée du Canada et de l'étranger qui étudient la structure de la demande de consommation et, (3) fournir des perspectives pour d'éventuelles analyses de la demande des consommateurs.     

An empirical assessment of food security on First Nations in Canada

Using data generated from surveys conducted on First Nations throughout Canada, we use regression analysis to examine factors influencing food insecurity. To our knowledge, this is the first time a regression-based analysis has been conducted to examine food insecurity on First Nations in Canada. As expected, income is inversely related to the likelihood that one reports their household as experiencing food insecurity. In addition, individuals in extremely remote areas are more likely to report their household as experiencing food insecurity. Although traditional food consumption is prevalent, we do not find evidence that it is associated with reductions in the prevalence of self-reported household food insecurity. We find that gender and mental health are associated with perceived household food insecurity. Although this study is novel, for reasons and limitations detailed in the paper, it should be viewed as an initial effort to establish potential relationships that underscore one of the most important issues facing Canada: the high prevalence of food insecurity in First Nations communities.     

A COMPARISON OF LEGISLATIVE ASPECTS OF AGRICULTURAL MARKET REGULATION IN CANADA AND THE U.S.

There are many common characteristics between publicly sanctioned market regulation in U.S. and Canada, but there are also important differences. The growth of this form of organized intervention in Canadian agriculture in recent years and the apparent continued growth through national marketing boards create a need for a great deal more information than is presently available. This paper summarizes existing legislative sources of producer marketing agencies in Canada and the U.S. as one step toward reducing this information gap.
Les régulations sur la mise en marché sanctionées publiquement aux Etats-Unis et au Canada ont beaucoup de traits communs mais il y a aussi ďimportantes différences. La croissance de cette forme ďintervention organisée dans ľagriculture canadienne au cours des derniéres années ainsi que la croissance apparente engenderée par le Conseil de la mise en marché ont crée un besoin pour beaucoup plus ďinformation qui ne sont actuellement pas disponibles. Cet article réume les sources législatives qui existent présentement dans les agences de mise en marché des produits agricoles au Canada et aux Etats-Unis, comme un pas en avant afin de réduire ce manque ďinformation.     

The J-curve effect and the US–Canada forest products trade

This paper examines the dynamic effect of the US–Canada exchange rate on bilateral trade of forest products between the two countries. Special attention is given to investigate the J-curve hypothesis: whether or not the trade balance for US forest products trade with Canada benefits from a decline in the value of the US dollar. We adopt the autoregressive distributed lag (ARDL) approach to cointegration to estimate quarterly bilateral trade data between the US and Canada from 1989 to 2005. We find little evidence of the J-curve phenomenon for US forest products trade with Canada.     

Factors Impacting Food Safety Risk Perceptions

We developed and applied a model of consumer risk perceptions of beef food safety to better understand the underlying drivers of consumer demand for food safety. We show how consumer demographics, country‐of‐residence, as well as reliance on, and trust in, alternative food safety information sources affect risk perceptions of consumers in Canada, Japan and the United States. Consumers in all three countries have risk perceptions shaped by their level of reliance on observable and credence attribute information. Risk perceptions of consumers in each country are significantly higher for those less trusting of doctors. Moreover, personal and indirect food safety experiences substantially affect risk perceptions. These results are useful to decision‐makers in developing more efficient supply chain management strategies and public policies aimed at building or sustaining consumer confidence in food safety.     

The Demand for Atlantic Salmon in Canada: Reply

In their comment on our paper, Bing-Hwan Lin and Nancy Williams have raised some interesting issues, but some of them are peripheral to the objective of our original study. The central objective of our original paper is to estimate income and price elasticities of demand for Atlantic salmon in Canada and then to use the parameter values to evaluate the market potential of farmed Atlantic salmon which are now being produced in Atlantic Canada. Accordingly, a demand equation has been estimated using annual data for the period 1955–1981. The inverted form has given a good fit and the results are reported in the paper.