Price transmission,asymmetric adjustment and threshold effects in the cotton supply chain: a case study for Vidarbha,India

This study examines price transmission asymmetries in Vidarbha's (India) cotton supply chain from 2002 to 2012. The analysis takes account of thresholds in price adjustments toward their long‐run equilibrium. The first stage considers the price dynamics between international and Indian domestic cotton prices. The second stage considers price transmission from domestic to farm gate cotton prices in Vidarbha. Results from the first stage indicate that Indian and international cotton markets are well‐integrated. In contrast, the second stage reveals significant threshold‐type nonlinearities as well as asymmetries in price transmission between domestic and farm gate prices. The short‐run dynamics suggest that the pass‐through from domestic to farm gate prices is larger when domestic prices decrease than when they increase. Moreover, back of the envelope calculations suggest that the loss in revenue for a typical farmer from a decrease in domestic price is larger than the gains from an increase in domestic price of the same magnitude. The implication is that traders benefit from price fluctuations at the expense of farmers. Evidence from fieldwork in Vidarbha suggest that asymmetries revealed in this analysis may be linked to trader's market power and inadequate market information among farmers.     

Forecasting the Adoption of GM Oilseed Rape: Evidence from a Discrete Choice Experiment in Germany

This paper explores farmers’ willingness to adopt genetically modified (GM) oilseed rape prior to its commercial release and estimates the ‘demand’ for the new technology. The analysis is based upon choice experiments with 202 German arable farmers. A multinomial probit estimation reveals that GM attributes such as gross margin, expected liability from cross pollination, or flexibility in returning to conventional oilseed rape significantly affect the likelihood of adoption. Neighbouring farmers’ attitudes towards GM cropping and a number of farmer and farm characteristics were also found to be significant determinants of prospective adoption. Demand simulations suggest that adoption rates are very sensitive to the profit difference between GM and non‐GM rape varieties. A monopolistic seed price would substantially reduce demand for the new technology. A monopolistic seed supplier would reap between 45% and 80% of the GM rent, and the deadweight loss of the monopoly would range between 15% and 30% of that rent. The remaining rent for farmers may be too small to outweigh possible producer price discounts resulting from the costs of segregating GM and non‐GM oilseed rape along the supply chain.     

Crop‐Level Supply Response by Agro‐Climatic Region in Ethiopia

Using farm‐level survey data from Ethiopia, this paper estimates a quadratic restricted profit function to assess the supply response of smallholder farmers. All major crops are identified in the analysis and variations in agro‐climatic and farming systems are accounted for. Peasant farmers, at least in the more commercial Central and Southern zones, do respond positively and significantly to price incentives. Farmers in the Northern zone are least commercial and least responsive to prices, and in fact the model based on profit maximisation does not adequately capture their behaviour. In general, non‐price factors, especially rainfall and market access, are more important than prices in affecting poduction, and which factors are most important varies depending on the crop and region in question. We conclude with suggestions regarding which crops appear most suitable to each agro‐climatic region, and identify the most relevant policy interventions in each case.     

Price and Profit: Investigating a Conundrum

Corn and soybean prices do not differ significantly among farms participating in the Illinois farm business farm management (FBFM) program from 1996 through 2005. While consistent with the literature, the finding is inconsistent with farmers' opinion of the importance of price. A conundrum exists. However, the study also finds that price and profit per acre are positively related when a given farm is examined over time. Thus, the conundrum can be explained as a difference in perspective: researchers examine variation between price and profit across farms at a point in time while farmers examine this variation within his/her farm over time. Nevertheless, the relationship a farmer observes is likely due to market supply and demand factors, not the farmer's managerial control over the price received.     

Agricultural Policy Reform and Off‐farm Labour Decisions

Off‐farm labour decisions of a sample of Kansas farmers are evaluated. The central question of our analysis pertains to whether 1996 US farm policy reforms may have altered the decisions to work off the farm. The effects of policy decoupling on off‐farm labour are complex: different aspects of policy changes can have opposing effects on off‐farm work decisions. Essentially, this makes this issue an empirical question. Results show that the introduction of fixed, decoupled payments in 1996 might have reduced the likelihood of off‐farm labour participation. However, the new policy environment may have increased farm households’ revealed aversion to risk, motivating a higher participation in non‐farm labour markets. The effects of 1996 policy reforms on farm income variability could have been attenuated by changes in US crop insurance programmes and by an increase in emergency assistance payments towards the end of the 1990s. The reduction in price supports may have increased the motivation for working off the farm. The net effect of the overall reforms on off‐farm work participation is not likely to have been large.     

How Do Health and Social Insurance Programmes Affect the Land and Labour Allocations of Farm Households? Evidence from Taiwan

To protect farmers from health care costs and risks to livelihood, most countries have developed special health and social insurance programmes specifically for farmers. While numerous studies have examined the determinants of participation in these programmes, little is known about how they influence famers' land and labour allocations. Without government‐sponsored health and social insurance, farmers may seek off‐farm employment in order to obtain similar benefits. Conditioning eligibility for social insurance on minimum land holdings and on‐farm work days can lead to delayed retirement and other forms of job lock. We investigate these issues using a unique dataset of 703,287 farms in Taiwan. After controlling for non‐random participation in Taiwan's social insurance programme, we find that the programme increases (decreases) on (off) farm labour supply, and decreases the amount of set‐aside land. This suggests that payments from social insurance substitute for those issued through land set‐aside programmes to some extent, and that failing to account for this substitution increases the cost of achieving both programmes' objectives.     

Marketing,cooperatives and price heterogeneity: evidence from the CIS dairy sector

Drawing on survey data, this article identifies the determinants of variations in farm gate milk prices for three CIS countries (Armenia, Moldova, and Ukraine). We apply a multi‐level modeling approach, specifically a bootstrapped mixed‐effects linear regression model. The analysis suggests three main strategies to improve the price received by farmers for their output: consolidation, competition for output, and stable supply chain relationships. In Armenia and Ukraine selling through a marketing cooperative has a significant, positive, albeit modest, effect on farm gate milk prices. In all three countries studied, the size of dairy operations, trust, and contracting also affect positively the prices received by farmers.     

保本微利和阶梯式水价机制研究

合理的水价是农村饮水安全工程可持续运行的重要手段之一。以民乐县为例,从农民水费承受能力和供水成本两方面进行分析,对农村推行保本微利的水价调整机制以及在此基础上推行阶梯式水价机制进行研究,探讨水价合理性和供水成本合理构成。推行保本微利和阶梯式水价机制保障了正常生产生活的基本用水量,兼顾了水企业和用水主体的利益,使水资源成本和供水成本在水价格中得到了充分体现,同时促进用水户珍惜水资源,保护水资源。     

Assessing the Impact of the ‘Decoupling’ Reform of the Common Agricultural Policy on Irish Farmers’ Off‐farm Labour Market Participation Decisions

This paper assesses the impact of the ‘decoupling’ reform of the Common Agricultural Policy on the labour allocation decisions of Irish farmers. The agricultural household decision‐making model provides the conceptual and theoretical framework to examine the interaction between government subsidies and farmers’ time allocation decisions. The relationship postulated is that ‘decoupling’ of agricultural support from production would probably result in a decline in the return to farm labour but it would also lead to an increase in household wealth. The effect of these factors on how farmers allocate their time is tested empirically using labour participation and labour supply models. The models developed are sufficiently general for application elsewhere. The main findings for the Irish situation are that the decoupling of direct payments is likely to increase the probability of farmers participating in the off‐farm employment market and that the amount of time allocated to off‐farm work will increase.     

Climate change adaptation actions by fish farmers: evidence from the Niger Delta Region of Nigeria

This paper examined climate change adaptation strategies in fish farming and the effect of such methods on the profit of fish farmers in the Niger Delta region of Nigeria, Africa’s most populous country. Using cross‐sectional data obtained from 420 fish farmers from the region and applying multivariate probit and instrumental variable regressions, the study found that fish farmers have adopted a broad range of strategies to address climate risk and that these have significantly increased farmers’ profit. Our findings indicated important relationships between certain farm, socio‐economic and institutional characteristics and the adaptation actions. The study provides useful insight into factors that potentially encourage the adoption of livelihood‐enhancing climate risk adaptation strategies by fish farmers in the Niger Delta region and similar contexts.     

新疆棉花生产要素成本收益及规模报酬变动趋势研究基于465户农户问卷调查数据

目的 由于生产要素的价格稳步攀升,新疆棉花生产成本过高,加上新疆棉花销售回归市场,价格不稳定,导致棉花生产风险增大,棉农种棉积极性降低。文章通过对新疆棉花成本收益及规模报酬变动趋势的研究,为棉农生产决策和政府政策提供参考。方法 在对新疆棉农问卷调查的基础上,研究棉花种植规模变动下生产要素的规模报酬。在二次函数的基础上寻找生产要素投入成本较低,收益最大的植棉规模,运用多元线性回归模型分析棉花生产要素投入对植棉成本的影响,以及不同植棉规模下生产要素对棉花产量增加的贡献程度。结果 新疆农户棉花生产的单位面积成本和收益随着户均种植规模的变化呈二次曲线变化;单位面积成本随着种植规模扩大,先下降,超过一定规模后上升,成本最低植棉规模为3.56hm²;单位面积收益随着种植规模扩大,先增加,超过一定规模后下降,收益最高的植棉规模为4.67~5.33hm²。研究发现,户均种植规模在2.5~4.5hm²时,土地费用、机械作业费、水电费、雇工费用投入对棉花产量的贡献较大,规模在7~10hm²时,化肥投入对棉花产量的贡献较大;农药、地膜、滴灌带等物质投入未体现规模趋势。结论 新疆农户棉花生产的成本和收益随着种植规模不同而变化的趋势符合规模经济原理,存在最优种植规模;在不同种植规模下,各种要素投入对新疆农户棉花产量的影响差异明显。因此,要引导棉农合理投入生产要素,降低成本,增加收益。     

Effect of off‐farm income on smallholder commercialization: panel evidence from rural households in Ethiopia

This article investigates how off‐farm income affects crop output market participation decisions and marketed surplus of smallholder farmers in Ethiopia. A double‐hurdle model is estimated using three waves of panel data from the Ethiopian Rural Household Survey. Unobserved heterogeneity is controlled for using a correlated random effect procedure and potential endogeneity of explanatory variables using a control function approach. The results show that off‐farm income has no significant influence on household crop output market participation. However, conditional on market participation, additional off‐farm earnings negatively affect the marketed surplus. This indicates that farmers use off‐farm earnings for consumption rather than for investment in agricultural production. Policy measures that promote rural investment may help increase returns to labor for land‐poor households participating in off‐farm work in the process of agricultural commercialization.     

Adoption of Food Safety Practices in Milk Production: Implications for Dairy Farmers in India

This study investigates the status, estimates the cost, and identifies the determinants of compliance with food safety measures in milk production in India. The study is based on the cross section primary data collected at the farm level in 3 states of India, namely, Bihar, Punjab, and Uttar Pradesh, in the year 2007. These states capture the geographical and institutional diversity of milk production and marketing in the country. The study shows that the status of compliance with food safety measures at the dairy farm level is not encouraging and a lot of efforts are needed to bridge this gap. The adoption intensity of food safety practices shows wide inter- and intraregional variations. This intensity depicts a positive relationship with herd size. The additional cost of compliance with food milk safety measures reveals an inverse relationship with herd size. The adoption intensity of food safety practices has been found to be influenced by the dairy farmers' characteristics. Herd size, education level, expertise in dairying, and integration of dairy farmers with modern milk supply chain have positive influence on the adoption intensity of food safety practices at the farm level. The positive relationship between adoption intensity of food safety measures and farmers' realization of milk price would influence farmers for greater adoption of these measures.     

The Welfare Economics of a Biofuel Tax Credit and the Interaction Effects with Price Contingent Farm Subsidies

A framework is developed to analyze the effects of a biofuel consumer tax exemption and the interaction effects with a price contingent farm subsidy. Ethanol prices rise above the gasoline price by the amount of the tax credit. Corn farmers gain directly while gasoline consumers only gain from any reduction in world oil prices due to the extra ethanol production. Domestic oil producers lose. Historically, the intercept of the ethanol supply curve is above the gasoline price. Hence, part of the tax credit is redundant and represents "rectangular" deadweight costs that dwarf triangular deadweight cost measures of traditional farm subsidies.     

Factors and scenarios affecting a farmer’s grain harvest logistics

This paper explores how changes in Australia’s grain industry supply chains are likely to impact on the nature and profitability of an Australian farmer’s grain harvest logistics. A simulation model is used to show how receival site rationalisation, cheaper on‐farm storage, larger trucks, higher‐yielding crops and new harvest technologies, separately and in combination, affect the nature and profitability of a farmer’s grain harvest logistics. Applying the model to a typical Australian grain farm shows that many of these changes unambiguously advantage the farm business, and often, the combination of these changes increases a farmer’s harvest profits by at least 10 per cent. For many farmers, the task of efficiently designing and managing harvest logistics will be an increasingly difficult yet important series of choices due to the range of storage options, grain pathways, crop portfolios and market opportunities that are arising. A farmer’s decisions about cost‐effective on‐farm storage and transport, and their judicious use, will be a key contributor to additional profit in future years.     

Analysis of a supply-control program under uncertainty and imperfect competition: Chinese cabbage in Taiwan

Researchers have often attributed the farm–wholesale price spread, after adjusting for marketing costs, as compensation for marketing firms' risk bearing. However, price spreads in excess of marketing costs can also be due to marketing firms' exercise of market power. In settings where both imperfect competition and marketer risk aversion are plausible, a modeling framework must be sufficiently general to accommodate both types of behavior. This article develops and estimates such a model in the context of fresh produce marketing and develops the implications for analysis of supply‐control programs. The model is applied to the production and marketing of Chinese cabbage in Taiwan and specifically to the analysis of supply‐control programs implemented in this industry by the Taiwanese government. The empirical results provide little support for the hypothesis that marketing firms exhibit risk averse behavior, but they do show that marketing firms exercise oligopsony power in procurement of the product from farmers, and that this power is positively related to the quantity supplied in each market period. This provides a heretofore unexplored impetus for supply controls intended to raise producer incomes. However, such controls are also rendered less effective by imperfect competition because marketing firms capture part of the benefits from supply reduction.     

食品安全丑闻报道与产销价格传导——基于中国猪肉市场的经验研究

本文利用主流媒体对猪肉质量安全事件的新闻报道构造食品安全丑闻报道指数,首次从媒体报道视角分析食品安全丑闻对中国猪肉供应链产销价格传导的影响。平滑转换误差修正模型检验结果表明:(1)食品安全丑闻报道是决定产销价格传导关系的门槛变量,当食品安全丑闻报道指数处于门槛值以内时,产销价格传导表现为线性关系,超出门槛值以后,则表现为非线性关系,但更多时候表现为非线性关系;(2)食品安全丑闻报道对产销价格具有非对称冲击效应,生猪价格比猪肉价格对冲击的反应程度更大、持续时间更长。这种非对称冲击效应不仅会打破产销价格波动的固有规律,也会加剧供应链上福利分配不均衡,处于弱势地位的养殖户更容易遭受福利损失。进一步采用向量自回归模型进行脉冲响应分析,结果仍然支持上述结论。     

Determinants of smallholder farmers' participation in banana markets in Central Africa: the role of transaction costs

A bivariate probit model was employed to jointly and separately estimate banana market participation decisions of buying and selling households in Rwanda and Burundi using household survey data. Selectivity bias was corrected for estimating the transacted volumes using Heckman's procedure. The results showed that transaction cost‐related factors such as geographical location of households, market information sources, and travel time to the nearest urban center influence market participation. Non‐price‐related factors such as security of land tenure, labor availability, off‐farm income, gender of the household head, and years of farming experience had a significant influence on the transacted volumes. Output prices had a significant correlation with sales volume, indicating price incentives increased supply by sellers. Generally, the findings suggest that policies aimed at investments in rural road infrastructure, market information systems, collective marketing, and value addition of banana products may provide a potential avenue for mitigating transaction costs and enhancing market participation and production of marketed surplus by rural households.     

A supply‐side analysis of agritourism: Evidence from farm‐level agriculture census data in Taiwan

Due to consumers’ increased demand for leisure and farmers’ need for income diversification, researchers and policymakers have significant interest in topics related to agritourism. This study provides a supply‐side analysis on agritourism using Taiwan as a case study. Utilising a sample of 720,148 family farms from the 2010 agriculture census survey in Taiwan, we quantify the effects of engaging in the agritourism business on farm income, on farm succession, and on family members’ labour supply decisions between on‐farm and off‐farm work. An analytical framework that combines the doubly robustness regression model and semiparametric estimation is proposed to address the endogeneity bias. Results indicate that participation in agritourism increases farm income and family farm succession. Farms engaging in agritourism also have more family members working on the farm, and fewer family members working off‐farm, compared to farms not engaging in agritourism. Although agritourism enterprises are developed to meet consumers’ demand for leisure, our results show that they also improve the economic welfare of farm households.     

SUPPLY RESPONSIVENESS OF RICE FARMERS IN LAGUNA,PHILIPPINES

The supply response and input demand by farmers using modern rice technology in Laguna, Philippines were estimated using profit function analysis. The results indicate that farmers do maximise short-term profits and respond to price changes efficiently. The supply elasticity of rice with respect to its own price was approximately unity. Changes in real wages were estimated to have a greater impact on rice profit and supplies than changes in the real prices of mechanised land preparation, fertiliser or pesticides. Production elasticities derived from the profit function were consistent with those estimated directly from the underlying production function.