The price stabilization effects of the EU entry price scheme for fruit and vegetables

The article assesses the stabilization effects of the EU import regime for fresh fruit and vegetables based on the entry price system (EPS). The analysis is carried out on the EU prices of tomatoes and lemons and those of imports from some of the main competing countries on the EU domestic markets: Morocco, Argentina, and Turkey. It is based on the estimation of a threshold vector autoregressive econometric model that is shown capable of taking the workings of the import regime into account. The model shows that prices behave differently when import prices are above/below the trigger entry price. This article allowed to highlight the cases for which the isolation effect of EPS seems reached and the resulting stabilization effects.     

Out‐of‐sample testing price discovery in commodity markets: the case of soybeans

Price discovery, a central function of futures markets, has been usually tested in‐sample by studying the common stochastic trend between spot and futures prices. Instead, to evaluate futures as anticipatory prices, we develop a forecast approach to out‐of‐sample test price discovery in a multivariate framework. We apply it to the soybeans market. Results indicate futures prices as the best available “predictors” of future spot prices, although this finding holds only on average and for certain periods, other models show forecasting gains.     

The impact of the 2005–2010 rice price increase on consumption in rural Bangladesh

This article studies the impact of the rice price increase between 2005 and 2010 on consumption in rural Bangladesh. Using the Household Income and Expenditure Survey (HIES) data, we compare net rice buyers and sellers to self‐sufficient households. To identify the effect of rice price changes on household consumption of rice, nonrice food and nonfood items, we employ a difference‐in‐differences (DiD) technique. Our findings indicate that the surge in domestic rice prices between 2005 and 2010 reduced the nonrice food consumption of net rice buyer households by 7%, compared to the households who are self‐sufficient in rice production. However, it did neither affect their rice nor their nonfood consumption. In contrast, while we find no significant effect of rice price increases on the rice consumption of net rice sellers, we observe a 9% increase in their nonrice food consumption. In such situation, a subsidy on low‐quality rice may be effective in fulfilling the nutritional requirement of low‐income households.     

Beyond One‐Size‐Fits‐All: Differentiating Market Access Measures for Commodity Systems in the Kenyan Highlands

Market access measures employed by economists and spatial analysts may not adequately capture local market or product‐specific variation. Analysis is conducted on the effects of market access on two commodities in the Kenyan highlands: milk and bean seeds. Both simple and composite measures of market access are applied to spatial price formation models to create spatial price decay functions in the context of household‐specific transaction costs. Composite measures of market access include negative exponential (using travel time or distance as cost) and gravity measures. The results demonstrate that the effects of market access differ significantly depending on the particular goods of interest. Simple measures of market access have the advantage of being more easily interpretable, and should therefore be preferred when communicating research outputs to the non‐scientific community, especially decision‐makers. The implications are that research addressing commodity‐specific development questions needs to look beyond generic measures of market access and develop tailored measures that reflect the characteristics of the commodity system of interest. The analysis also demonstrates that spatial price formation can be used to generate potentially more accurate measures of unit‐distance marketing costs.     

Animal disease outbreaks and food market price dynamics: Evidence from regime‐dependent modelling and connected scatterplots

The economic impacts of animal disease outbreaks have been widely discussed in the literature. Most authors have centred their attention on estimating the direct costs. Recent studies have shown that the indirect economic effects might lead to equal or even higher welfare losses. This study aims to contribute to this field of research by assessing the effect of an animal disease outbreak on food market price dynamics in Mexico, accounting for the potential effect of an antitrust intervention. We employ a regime‐dependent vector error correction model and a connected scatterplot analysis. The results show that both the outbreak and the antitrust intervention caused structural breaks in food market price dynamics between producers and consumers, reflected in an increase in the absolute component of the marketing margin, with serious food security implications.     

Collateral‐free lending with risk‐contingent credit for agricultural development: indemnifying loans against pulse crop price risk in India

This article addresses the problem of collateral‐free lending in the context of agricultural development. We investigate a viable alternative to traditional credit products through the development of risk‐contingent credit for operating loans and farm mortgages and apply the concept to agricultural loans for pulse crops in India. Risk‐contingent credit mitigates business and financial risk by reducing debt obligations depending on the embedded commodity options whose payoffs are linked with commodity price fluctuations. We analyze daily commodity spot prices for pulse crops in India and show how risk‐contingent structured financial instruments can be priced in practice.     

Consumer Willingness to Pay Price Premiums for Credence Attributes of Livestock Products – A Meta‐Analysis

Livestock products, such as dairy and beef, are increasingly regarded as resource intensive and concerns are raised about animal welfare and environmental sustainability. As a result, consumer awareness of these issues has led to an increasing demand for products with high quality credence attributes (CAs) that cannot be directly experienced or identified. A number of empirical studies have attempted to estimate consumers' willingness to pay (WTP) for CAs, which represents the additional value placed on the benefits that they derive from those products. However, there are significant differences in these WTP estimates, mainly because both consumers' perceptions of CAs and the conditions of the studies vary. We conduct a meta‐analysis to examine consumers' WTP for different CAs of livestock products based on a systematic review of relevant studies. Meta‐regression models are used to control for the heterogeneity of WTP estimates and investigate factors that affect the estimation of WTP. Overall 555 estimates derived from 94 papers reporting WTP are included in this study. Meta‐regression results establish the presence of systematic WTP variation associated with types of products, CAs, and locations, though also indicate that WTP is subject to systematic variation associated with study methodology.     

Spatial price premium transmission for Meat Standards Australia‐graded cattle: the vulnerability of price premiums to outside shocks

Studies of market integration show that price changes are transmitted spatially through arbitrage. Transmission across differentiated agricultural products is important to investigate, but it has not been explored given its complexities for assessment. Using data from Australian cattle markets, we examine the dynamics of Meat Standards Australia price premium transmission between states. An impulse response function analysis using Bayesian vector autoregression with sign restriction identification shows that shocks to prices and price premiums are partially transmitted contemporaneously between markets and it takes several weeks to complete transmission. In addition, we find an asymmetry of price and price premium shocks originating in Southern Queensland that have an inverse immediate impact in New South Wales, and take months to transmit the usual price response. This outcome may be explained by differences in cattle availability in each state, which can be related to forage availability due to weather conditions. Based on these results, producers can forecast fluctuations on price premiums and adjust their cattle supply accordingly.     

Price Premiums for Providing Eco‐labelled Seafood: Evidence from MSC‐certified Cod in Sweden

Eco‐labelled seafood is an important tool to promote sustainable development in fisheries. A price premium on eco‐labelled seafood signals a return on investment in sustainable fishing methods, providing an incentive for fishers to adopt such methods. This paper investigates whether Swedish fishermen gained a price premium from participating in the Marine Stewardship Council (MSC)‐certified Swedish Eastern Baltic cod fishery in the period 2011–2012. Using a detailed dataset of landing tickets and log books, we apply a panel data methodology to estimate the MSC price premium. We cannot find reliable evidence that the consumer level premium for MCS cod is actually passed back to the producers in this case.     

FTA,Exchange rate pass‐through and export price behavior – Lessons from the Australian dairy sector

The growing number of bilateral and regional free trade agreements (FTAs) alongside exchange rate volatility has raised a question on whether these affect exporters’ pricing behaviors, hence competitiveness. This study contributes to this topic by examining Australian dairy export price behavior across eight major markets taking into account the extent of pass‐through of exchange rate and tariff as well as FTAs between Australia and its trading partners. Commodity‐level dairy trade data from 1996 to 2016 and the feasible generalized least squares methods are employed. The study finds incomplete pass‐through at the industry level. The dairy export prices decrease by 1.7% if Australian dollar depreciates by 10%, while 10% tariff reduction is associated with 0.7% export price cut. Results at the commodity level show different pricing behaviors across destination and commodity markets. Overall, apart from the tariff effects, there is minimal evidence of the impacts of FTAs on dairy export prices.     

Capital Intensification,Productivity and Exchange – A Class‐Based Analysis of Agriculture in West Bengal in the Current Millennium

This paper deals with capitalist agricultural development in West Bengal, India. Based on a field study of two regions at different ends of the development spectrum, it shows the class‐specific nature of agrarian development. Farms based on hired labour adopt more capital‐intensive techniques, operate on a much larger scale and have higher yields in comparison to farms based on family labour, regardless of their size. Differentiation of the peasantry is intense where the adoption of capital‐intensive technology is high. The paper concludes that the arguments of A.V. Chayanov and A.K. Sen, which seek to explain the inverse relation between farm size and productivity in terms of the superior efficiency of farms based on family labour compared to capitalist farms, are not borne out by our findings. Moreover, in the advanced region of Bardhaman, farmers of all economic classes are found to be subject to a form of compulsive exchange or stressed commerce brought about by traders external to the region.     

Demand for fish in Asia: a cross‐country analysis*

Fish demand patterns in nine Asian countries were investigated using a multistage budgeting framework allowing a disaggregated approach to analysing fish consumption. This paper highlights the heterogeneity of fisheries products in terms of species, sources and cultural responses of consumers, factors that are important in fish demand under the Asian setting. Specifically, fish demand by income groups were compared to determine how the low‐ and high‐income households respond to price and income changes. Results showed that the estimated price and income elasticities of all fish types included in the study were relatively more elastic among the poorer households.     

Re‐evaluating the Harbinson Proposal – Prospects for the EU25: A Note

In this study, we use the Harbinson Proposal and July Framework to compare a ‘likely’ Doha scenario with a realistic baseline. The novelty of this study is that we focus exclusively on the trade‐led welfare impacts in selected EU member states. The important features of this note are the: (i) usage of the latest Global Trade Analysis Project (version 6) data; (ii) focus on EU25 regions incorporating all major Common Agricultural Policy instruments and reforms; and (iii) inclusion of binding tariff overhangs into the Harbinson tariff reductions. Results show the damping effects of tariff‐binding overhangs on welfare outcomes. This and other factors which limit the gains to liberalisation mean that the EU25 only realises 10% of its long‐run welfare gain potential, as defined by complete liberalisation.     

A Meta‐Analysis on the Elasticity of Demand for Pesticides

There is an increasing policy interest in pesticide taxation schemes as a measure to reduce harmful effects of pesticide use. The effectiveness of such tax depends, however, on the price elasticity of demand for pesticides. Moreover, information on these demand elasticities and their determinants is of crucial relevance for policy‐making and normative modeling approaches. In this article, we present a meta‐analysis based on studies that have estimated pesticide demand elasticities in Europe and North America. Our meta‐analysis reveals that the own‐price elasticities of demand for pesticides are, with a median of ?0.28, significantly smaller than zero, but also significantly larger than ?1, i.e. to be inelastic. We find that the demand for pesticides for special crops is less elastic than that for arable and grassland. In addition, the demand for herbicides is more elastic than for other pesticides. Studies that consider only short‐term horizons and little flexibility for farmers to adjust to price changes generate significantly less elastic pesticide demands. The results also indicate that more recent studies identify lower pesticide price elasticities of demand. Furthermore, we find that peer‐reviewed studies tend to find more inelastic results compared to grey literature.     

Demand for a labor‐based drought insurance scheme in Ethiopia: a stated choice experiment approach

Index‐based weather insurance is increasingly used to manage weather‐related risks in smallholder agriculture. However, cash‐constrained smallholders often lack the resources to pay an insurance premium, which may undermine its wider adoption. This article investigates alternative insurance payment methods that may help to enhance the adoption of index‐based weather insurance. We use a choice experiment to elicit smallholders’ willingness to pay in cash or labor for index‐based weather insurance in four districts in the south‐central highlands of Ethiopia. The insurance schemes were created using a fractional factorial design with three factors: work, cash, and payout rate. We analyze the choice data using a random parameter mixed logit model. We find that the average participants need a subsidy to pay cash for insurance because their willingness to pay is less than the expected cost of the insurance. On average, they are willing to pay only 0.81 ETB (Ethiopian currency) to get an expected yearly payout of 1 ETB. However, most are willing to participate in work‐for‐insurance programs at lower daily wage rates than is common for other work programs in Ethiopia.     

Price linkages in the international skim milk powder market: empirical evidence from nonparametric and time‐varying copulas

The objective of this article is to assess the integration of the international skim milk powder (SMP) market. This is pursued using monthly data over 2001 to 2014 from the three principal SMP‐producing regions (the EU, the USA and Oceania) and nonparametric kernel‐based and time‐varying copulas. The empirical results point to a strong and an increasing degree of overall price co‐movement and to statistically significant probabilities for joint price crashes and booms. While the EU and Oceania have been the regions with the highest degree of integration, the USA has been catching up with them.