Spatiotemporal Modeling of Asian Citrus Canker Risks: Implications for Insurance and Indemnification Fund Models

Asiatic citrus canker is a disease that poses a significant hazard to commercial citrus production. This article examines spatiotemporal models of the risks of citrus canker transmission. Models evaluate risks and are used to price annual contracts, which would pay producers a prespecified indemnity in the event that their grove is found to be infected with canker. Implications for risk management policy are discussed.     

Finding optimal price risk management instruments: the case of the Spanish potato sector

This article offers a comprehensive analysis of the problem of choosing between alternative market risk management instruments. We model farmers' behavior to optimize the certainty equivalent, formulated by a mean–variance model, by combining instruments with and without basis risk. Results are expressed as the demands for hedging with futures, forward contracts and insurance. Theoretical results are applied to a selection of Spanish producers of fresh potatoes, a sector that is exposed to significant market risks. Amsterdam's Euronext provides potato futures prices, and the recently launched revenue insurance in Spain provides the example for price insurance. Three conclusions summarize the article's main findings. First, we show that Spanish potato revenue insurance subsidies are a factor that determines the instrument rankings and choice. Second, the efficiency of insurance subsidies is generally low. Finally, the Amsterdam potato futures market does not provide a cost‐effective means to manage price risks for Spanish fresh potato growers.     

Contracting for Canola in the Great Plains States

Canola has become an important crop in the last decade in the United States. Production of canola is risky and competes with other crops that have varying risk reduction mechanisms. Processors develop and offer contracts with varying specifications that allow growers to reduce risk and attract canola production. In this study, preplant contracting strategies were evaluated in terms of risk and return for growers and processors. Alternative contracts include fixed‐price‐variety‐specific with and without act‐of‐God provisions, and an oil‐premium contract. Grower returns and processor gross margins were simulated and resulting distributions were evaluated using stochastic efficiency with respect to a function. In the dominant growing region, growers would prefer fixed‐price‐variety‐specific contracts versus contracts with oil premiums. The latter would only be preferred by crushers that are highly risk averse. The results vary regionally suggesting that contract types should vary by region to be acceptable to a broader range of growers and processors.     

Farmers’ Preferences for Production Practices: A Choice Experiment Study in the Rhone River Delta

This article examines farmers' preferences for both cropping and management practices, which are of policy interest because of their environmental impact. We present the results of a choice experiment survey of all agricultural decision makers in the Camargue region. A latent class model identified three classes. The main class encompasses farmers complying with the norms of the Protected Geographical Indication (PGI): Riz de Camargue. We estimated the monetary value of each of the relevant agricultural practices. Our results make a strong case for differentiating incentives to encourage environmentally friendly practices and identify the diversity of values attached to the main components of rice cropping technology in the area. Estimates of the implicit prices indicate that most rice growers can be persuaded to adopt environmentally friendly practices. These findings could help in designing targeted contracts according to farmers' preferences, in line with conservation or environmental objectives.     

Vertical Integration in the Pork Industry

This article provides an economic explanation regarding why the share of U.S. pork raised on company-owned farms with hired management (integration) is increasing relative to production through independently owned-and-operated contract growers (contracting). The article develops a property rights model that shows how in certain circumstances production contracts do not transfer sufficient control over the use of production assets to intermediaries. On the other hand, integration removes certain grower incentives, with the result that production on company farms tends to be relatively costly. Practical examples of factors that influence the likelihood of full integration are emphasized.     

Seasonal variability,land values and willingness–to–pay for a forward wheat contract with protein premiums and discounts

This article investigates the impact of a protein premiums and discounts system on the income stream from growing wheat. Based on a biological relationship between protein and yield in uncertain seasonal conditions, it shows that such a system reduces the expected level and variability of wheat income. It is subsequently argued, using a numerical analysis, that protein payments affect both the attraction to wheat growers of forward contracts and the value of land used for wheat. The nature of both of these impacts is related to the level of seasonal variability affecting the land. Consequently, wheat growers in the more unreliable regions of the wheatbelt may have been particularly disadvantaged by the system.     

Price-Predicting Ability of Farm Managers: Empirical Findings with Flower Producers in the Netherlands

Differences in income among horticultural growers producing under similar conditions are known to be substantial. Production policy, including cultivar choice, plays an important role. Both price variation over time and price differences among cultivars provide valuable management information to growers to adapt their production policy. This study focuses on price-predicting skills of specialized chrysanthemum growers. The study, based on a survey among 26 participants, shows that growers who predict absolute prices well for one period do not have a higher chance of predicting well for other periods. With respect to predicting relative price positions (relative to other cultivars or other firms), evidence is found, however, that this is a skill, especially for estimating the relative market position. Also, evidence is provided that price differences among cultivars are nonrandom in time, and it is concluded that growers could adapt their production planning and cultivar choice to benefit from expected price variations.     

Vertical Integration in the Malting Barley Industry: A "Silver Bullet" for Coors?

The Coors Brewing Company owns a single-site, integrated malting facility and brewery in Golden, Colorado; a second brewery in Memphis, Tennessee; and a mixing facility in Elkton, Virginia. Coors operates a research and development program that breeds barley varieties suitable for malting at the Golden site. Coors contracts with 900 growers in Colorado, Idaho, Montana, and Wyoming for approximately 160,000 acres of malting barley. This case study is designed for senior- and graduate-level courses in agribusiness management. The case relates three theories of vertical coordination to Coors' decision to contract 100% of its malting barley requirements.     

Contract Enforcement, Social Efficiency, and Distribution: Some Experimental Evidence

We use economic experiments to investigate how different contract enforcement regimes affect efficiency and the distribution of surplus in a vertically coordinated market with buyer concentration. We find that if a third party (e.g., government) perfectly enforces contracts, social efficiency is enhanced. We also find that when third-party enforcement is imperfect, social efficiency will not necessarily decrease because trading partners find ways to self enforce contracts. However, opportunistic behavior by some traders leaves some sellers (growers) with ex post profits below reservation levels. Finally, partial or one-sided third-party enforcement causes significant efficiency losses by constraining subjects' ability to use informal enforcement instruments.     

Means-end chain analysis explains soil fertility management decisions by peri-urban vegetable growers in Kenya

Past studies of the use of soil fertility management strategies by farmers usually model input use decisions based on the neoclassical utility/profit maximization principle in which farmers use soil fertility management inputs primarily to increase revenues and profits. However, there is, to date, no study that explains exactly how this decision-making process occurs and the role which personal values play in driving the choice of soil fertility management inputs. This article systematically maps the relationship between choice of soil fertility management strategy (attributes), its outcomes (consequences) and the personal values that motivate the choice. It specifically uses the means-end chain approach to construct hierarchical value maps that relate the attributes to consequences, and ultimately to the personal values. The study finds that the use of soil fertility management strategies by peri-urban fresh vegetable growers is driven by five personal values, namely happiness, comfortable life, independence, good/healthy life and achievement of life goals. It also finds that while farmers seek to increase profit (hence incomes), profit maximization is not the end driver of the use of soil fertility management inputs. It concludes that a lot more goes into farmers’ decision-making process relating to the use of soil fertility management practices than can be explained by the neoclassical profit/utility maximization principle. The study discusses the policy implications of these findings.     

Self-enforcing contracts in agriculture

This article examines a self-enforcing contract between a risk-neutralprincipal and a risk-averse agent who is able to hold up valuesex post. It shows that risk aversion and variance can only partlyexplain the contract's incentive intensity. Ex post bargainingpower and outside options will also determine contract choice.If the agent's ex post bargaining position is weak, the principalcannot commit to high-powered incentives, whereas if the agent'sex post bargaining position is good, the agent cannot committo low-powered incentives. The model may thus explain some puzzlesin agricultural contracts, in particular why risk-averse agentssometimes accept to be governed by high-powered incentive contractsthat are quite similar to fixed rental contracts, and why risk-neutralagents are sometimes offered share contracts with lower-poweredincentives.     

Microeconometric analysis of wine grape supply contracts in Australia*

This paper examines wine grape supply contracts used in the main grape growing regions of Australia. An empirical analysis provides insight into specific aspects of contract design and implementation. Statistical analyses of sample data reveal differences between regions in contract specifications. Lower quality grape growing regions place a greater reliance on grape quality assessment to determine bonus/penalty payments compared to higher quality regions. Contracts in higher quality regions place greater emphasis on explicit winery involvement and direction in vineyard management. Results indicate that longer duration contracts are more inclusive in terms of the number of clauses included. Evidence of risk shifting (i.e., winery to grower) for high quality grapes is reported, where the price received by growers is determined by the bottle price of the wine produced.     

Integrating crop modelling and production economics to investigate multiple nutrient deficiencies and yield gaps

A method is described for integrating crop modelling and production economics to quantify optimum applications of multiple nutrients and yield gaps. The method is demonstrated for crop production in the high‐rainfall zone of southern Australia. Data from a biophysical crop model were used to overcome the persistent problem of inadequate experimental data. The Mitscherlich function was expanded to accommodate four variable inputs – nitrogen, phosphorus, potassium and sulphur – and the expansion path was used to determine the economic optimum application of all four nutrients. Modelling revealed the state‐contingent yield potential and the extent to which unrealised yield could be explained by profit‐maximising behaviour and risk‐aversion by growers. If growers and their advisors were guided by the methods described, they would be better equipped to assess crop nutrient demands and limitations, predict yield potential, additional profit and the risks associated with high input systems in a variable climate. If scientists were more aware of the extra profits and the risks involved (as well as the quantitative relationships between inputs and outputs) when thinking about what to produce and how to do so, they would be more circumspect about the net benefits to be obtained from closing yield gaps.     

Pesticide‐handling practices: the case of coffee growers in Papua New Guinea

Pesticide mismanagement potentially has high risks for farmers, households living in the community and the environment. In Papua New Guinea where farming is the primary occupation, there is evidence of dangerous herbicide application methods being used by coffee growers. Using original survey data for coffee smallholders from four provinces, we assess the factors driving farmers' use of personal protective equipment when preparing and applying herbicides, and farmers' disposal of agro‐chemical containers. We control for households' demographic variables and measure the impact of farmers' training in pest and disease management. We use the special regressor method to estimate binary choice models featuring an endogenous binary regressor (training). Our results show that human capital (education) and training are important drivers of farmers' pesticide‐handling practices, with marginal effects estimated at 10 and 22 per cent, respectively.     

Sunkist Growers: Refreshing the Brand

The objective of this case is to introduce students to what is possibly the most complex agricultural cooperative in the United States and learn more about the economic issues involved in citrus production globally. Students are asked to analyze a strategy built around brand loyalty with higher costs and an inability to dictate to growers what varieties are most valuable to retailers.     

农业水费收缴方式改革之思考

针对农业水费收缴工作中存在的认识误区、政策缺陷、水价形成机制不合理、水费使用不合理及灌溉设施老化等问题，提出收费直接到村，合同管理，建立用水者协会等建议。     

Herbicide resistance and the adoption of integrated weed management by Western Australian grain growers

Extension programs to encourage farmers to reduce reliance on herbicides by adopting integrated weed management (IWM) practices have met with limited success. Studies aiming to understand the factors that influence farmers' choices of integrated control practices have faced difficulties in variable specification, and have not achieved high explanatory power. Using data from grain growers in Western Australia, where herbicide resistance in major crop weeds is common, this study tests the applicability of a framework for the IWM adoption decision in which herbicide efficacy is assumed to be a potentially exhaustible resource. Farmers' perceptions of multiple techniques and other variables are aggregated using principal components, and used in logistic regressions to explain the intensity of use of IWM practices. Eighty‐six percent of growers were correctly classified according to use of multiple IWM practices. Herbicide resistance and expectations of the future availability of effective new herbicides were significant in explaining IWM adoption. IWM adoption and herbicide‐resistance management are shown to be information‐intensive and involving an intertemporal resource management decision.     

Quality Measurement and Contract Design: Lessons from the North American Sugarbeet Industry

This paper examines contracts used in the North American sugarbeet industry. Though quite similar in many respects, the contracts we study vary across processing firms in the set of quality measures used to condition contract payments to growers. This is somewhat surprising, given the homogeneous nature of the processors' finished product (refined sugar). It seems unlikely that processors differ significantly in how they value the various attributes of a sugarbeet, and such a difference is perhaps the most natural reason to expect variation in the structure of quality incentives across processors. Previous attempts to explain the observed variation in sugarbeet contracts have focused on differences in organizational form across firms. In this paper, we provide an alternative explanation that relies on variation across production regions in growers' ability to control the relevant measures of sugarbeet quality.     

经营权稳定性、转入规模与农户化肥施用行为——基于转入地的微观实证

目的 论证农地经营权稳定性对农户化肥施用行为的影响,基于产权理论的视角,构建“农地经营权稳定性—转入规模—化肥施用量”的理论分析框架为政府部门制定化肥减量使用的政策安排提供决策参考,以期促进农业绿色高效生产。方法 文章基于2015年对黑龙江、河南、四川及浙江4省1 040户的调查数据,运用中介效应模型揭示农地经营权稳定性对农户化肥施用的影响关系和路径,并尝试引入工具变量来缓解模型内生性问题。结果 （1）农地经营权稳定性总体上显著减少农户的化肥施用量,从不同维度的农地经营权稳定性影响来看,农地流转期限越长和在流转时签订合同均有助于农户减少化肥施用量。（2）农地经营权稳定性对农户化肥施用具有直接效应和间接效应,农地经营权在时间持续和权力保障维度的稳定均会通过扩大土地转入规模从而显著减少农户的化肥施用量。结论 长期稳定的农地经营权和权责明确的流转契约是农户减施化肥的重要因素。政府要积极引导土地较长期限流转,保障时间维度上的持续性;政府要加强土地流转规范管理及培育农户契约意识;政府要积极推进闲散农地流转并因地制宜给予政策优惠。