Inter‐ and intra‐seasonal crop acreage response to international food prices and implications of volatility

Understanding how producers make decisions to allot acreage among crops and how decisions about land use are affected by changes in prices and their volatility is fundamental for predicting the supply of staple crops and, hence, assessing the global food supply situation. This study makes estimations of monthly (i.e., seasonal) versus annual global acreage response models for the world's principal staple food crops: wheat, corn, soybeans, and rice. Primary emphasis is given to the magnitude and speed of the allocation process. Estimation of intra‐annual acreage elasticity is crucial for expected food supply and for input demand, especially in the light of the recent short‐term volatility in food prices. The econometric results indicate that global crop acreage responds to crop prices and price risks, input costs as well as a time trend. Depending on respective crop, short‐run elasticities are about 0.05 to 0.40; price volatility tends to reduce acreage for some of the crops; comparison of the annual and the monthly acreage response elasticities suggests that acreage adjusts seasonally around the globe to new information and expectations. Given the seasonality of agriculture, time is of an essence for acreage response. The analysis indicates that acreage allocation is more sensitive to prices in the northern hemisphere spring than in winter and the response varies across months.     

Higher fuel and food prices: impacts and responses for Mozambique

Rising world prices for fuel and food represent a negative terms‐of‐trade shock for Mozambique. The impacts of these price rises are analyzed using various approaches. Detailed price data show that the world price increases are being transmitted to domestic prices. Short‐run net benefit ratio analysis indicates that urban households and households in the southern region are more vulnerable to food price increases. Rural households, particularly in the North and Center, often benefit from being in a net seller position. Longer‐term analysis using a computable general equilibrium (CGE) model of Mozambique indicates that the fuel price shock dominates rising food prices from both macroeconomic and poverty perspectives. Again, negative impacts are larger in urban areas. The importance of agricultural production response in general and export response in particular is highlighted. Policy analysis reveals difficult trade‐offs between short‐run mitigation and long‐run growth. Improved agricultural productivity has powerful positive impacts, but remains difficult to achieve and may not address the immediate impacts of higher prices.     

Rural credit and agricultural supply in Brazil

The objective of this study is to determine the financing impact of total expenditure on the use of agriculture inputs (fertilizers, labor, and pesticides), and the output of cotton, rice, beans, corn, soybean, and wheat in Brazil. We study the period 1976–2005. The analysis is based on duality applied to the production theory. The output supplies and conditioned input demands are estimated from a translog multi‐output, multi‐input restricted profit function, where the total production credit is used as proxy of the total expenditure. Farmer expectations with respect to crop prices are incorporated to the estimation based on the quasi‐rational expectation model. The output and input responses to the total expenditure are positive and statistically significant except for cotton, wheat, fertilizer, and pesticides. The short‐run output supply response to own prices is inelastic, except for wheat, which presents elastic response to its price. Acreage has a positive impact on the output supply and it is influenced by land productivity. The main conclusion is that farmers face budget restrictions to purchase inputs, and a government credit program might increase the agricultural supply.     

The effects of China's growth on the food prices and the food exports of other developing countries

This article explores the impacts of China's growth in the international markets of agricultural products along two dimensions: food price inflation and export growth in other developing countries. China's food imports of vegetable oils have grown dramatically over the last decade, linking China's economic growth to the recent increases in global food prices. If China is a source of global food price inflation, exporting countries will benefit whether they sell directly to China or not. These direct and indirect linkages are explored using a short‐run, partial‐equilibrium model of international trade in agricultural products in which consumer prices and trade costs are derived from bilateral trade flows. China's effects on food prices and exports are estimated by reducing Chinese food expenditures in 2007 by half, roughly China's level of expenditures in 1995. Results indicate that food prices as measured by CES price indexes in developing Asia, Africa, and Latin America would have been reduced by 1.27%, 0.32%, and 0.22%, respectively. China has been an important source of growth for exporters selling directly to China. There is no evidence of export growth due to an overall increase in food prices caused by China's growth.     

FOOD SECURITY IN KWAZULU: RESULTS OF A HOUSEHOLD-BASED PROGRAMMING MODEL

A mathematical programming model of rural KwaZulu, excluding three northern districts, was developed to simulate agricultural production in regions of high and low cropping potential. This model aggregates enterprise levels predicted for four representative households of which two are in the high-potential region and two in the low-potential region. Several economic scenarios are simulated with the model to predict, inter alia, responses to changes in cereal prices, input subsidies, changes in off-farm employment and a rental market for crop land. Long-run food supply response is estimated to be inelastic with respect to changes in product and input prices. Higher food prices harm the majority of rural households. Lower input prices have little impact on household welfare. Conversely, it is predicted that a rental market for arable land could have a large positive impact on crop production and would improve household welfare.     

The Ghana Grains Partnership

A surge in international food prices that began in 2008 led to a variety of responses from African governments, ranging from price controls, trade restrictions and food security stocks, to facilitating longer-term increase in supply-side increases in production. In Ghana, the objectives emphasized broad-based, pro-poor agricultural growth, expansion of high-value cash crops and improved production of food crops. A hybrid of crop rotation plus addition of external inputs of fertilizers in a modern intensified farming regime was seen as a way forward. The Ghana Grains Partnership (GGP) was underpinned by this assumption, addressing a national shortfall in maize through a coordinated and market-led value chain development approach. The Partnership was initially made up of international and national agribusinesses, an agricultural development fund, farmers and farmer associations and a commercial bank and coordinated by Prorustica. The GGP adopted innovative approaches such as the coordination of commercial and non-commercial objectives. The focus on complete agricultural value chains provided a holistic approach to meet the needs of farmers for agricultural inputs and finance and addressed constraints to more effective commodity output markets. The Partnership's basic principles included the setting up of a farmers' grain association with the partners sharing the costs, benefits and risks.     

Monetary Impacts and Overshooting of Agricultural Prices in an Open Economy

This article's focus is on the time adjustment paths of the exchange rate and prices in response to unanticipated monetary shocks. First, we expand the theoretical specification of the overshooting hypothesis by generalizing Dornbusch's model to include a third sector (i.e., agricultural prices). Second, we employ Johansen's cointegration test along with a vector error correction model to investigate whether agricultural prices overshoot in an open economy. The empirical results indicate that agricultural prices adjust faster than industrial prices to innovations in the money supply, affecting relative prices in the short run, but strict long-run money neutrality does not hold.     

Wages,Prices and Agriculture: How Can Indian Agriculture Cope with Rising Wages?

Rapid economic growth in India has resulted in rapidly rising rural wages. Using the framework of variable profit functions and household level data, we study econometrically the wage impacts on crop agriculture. Rising wages are associated with decreasing crop output, other things being equal. Crop prices would need to increase by 80% in the short run to offset the effect of an agricultural wage increase, or by 140% in the short run to offset rural non‐farm wage increases as well. However, because non‐land farm assets respond positively to the non‐farm wage, in the medium term this increase is reduced to 74%. During the period of 1999/00‐2007/08, growth in non‐land farm assets, the labour force, education and technology has easily compensated for the wage increase, and probably also for the accelerating wage growth. Focusing on growing these shifter variables is a much better policy option than raising prices that would come at the expense of consumers or taxpayers.     

Moving up the processing ladder in primary product exports: Sri Lanka's "value-added" tea industry

Governments in many developing countries, influenced by the experience of the East Asian newly industrialized countries, have adopted policies to enhance domestic processing of primary commodities as a tool for accelerating employment growth, export revenues, and development. Sri Lanka has traditionally exported tea in the form of bulk (commodity) teas, but “value‐added” teas such as packaged teas, tea bags, etc., have expanded in recent years. This article examines factors affecting the processing of value‐added tea products in Sri Lanka by modeling export supply behavior. Estimates of the long‐run relationship and short‐run dynamics of export supply are presented and discussed. The price of value‐added tea relative to bulk tea, and industry capacity, are identified as the main determinants of export supply, while exchange rate changes have no discernible effect. The policy implications of the analysis for enhancing further expansion of such value‐added teas are presented. These are of interest for both policy makers and development analysts. In particular, the reasons that undermine the effectiveness of exchange rate policy as an instrument to stimulate value addition of primary products have much relevance for similar developing countries.     

Effects of supermarket monopsony pricing on agriculture

Potential effects of alleged monopsony pricing of farm food products by supermarkets on farm product prices, quantities, incomes and land values are assessed relative to competitive behaviour. A long‐run comparative static equilibrium model is used. For export‐competing and import‐competing products, the farm food input supply curve facing the supermarkets is close to perfectly elastic and this limits monopsony behaviour. At the margin, the opportunity to reallocate agricultural land between traded and nontraded farm products means a highly elastic supply function for nontraded food inputs facing supermarkets and very limited monopsony effects.     

ASSESSING SOME EFFECTS OF INFLATION ON THE AGRICULTURAL SECTOR*

The time pattern of effects of inflation on prices received, prices paid, asset returns, and real incomes of different members of the agricultural sector is described. In the long run it is argued that inflation will have very small, if any, effects on relative prices or real incomes. For the short run, which may be several years, it is likely that some prices will rise more slowly than others and cause income losses. Included in the group of losers are producers of export products.     

The Determination of Agricultural Wage Rates in Bangladesh

The impact of the ‘green revolution’ on wages has been a contentious issue. This paper uses the cointegration and error correction approach to identify long and short-run relationships between prices, agricultural production and wages of agricultural labourers in Bangladesh, test for homogeneity, test for weak exogeneity with the Johansen-Juselius methodology, test for a structural break, and estimate the long and short-run elasticities of nominal wages with respect to rice prices. We find that agricultural wages have strong positive long run relationships with rice prices, manufacturing wages and agricultural productivity. The short run response of wages, estimated consistently with these longer run relationships, to rice prices is small, highlighting the vulnerability of the rural poor to sudden rises in rice prices, even though in the longer run nominal wages respond sufficiently to rice prices. Policy can promote growth of agriculture and manufacturing but should also mitigate the short run food insecurity of agricultural labourers.     

Food security and Canada's agricultural system challenged by COVID-19

The effect of COVID-19 on Canadian food security is examined from two different perspectives. COVID-19 creates a unique “income shock” that is expected to increase the prevalence of household food insecurity. This food insecurity can be measured by utilizing the Canadian Community Health Survey (CCHS). More fundamentally, COVID-19 heightens household concern about the capacity of the Canadian food system to ensure food availability. Despite surges in demand and supply chain disruptions, we currently do not observe broad, rapid appreciation in food prices. This suggests that there is an adequate supply of food for the near term. There is less certainty over intermediate and longer time periods because so many factors are in flux, particularly the rate of increases in sicknesses and deaths across the country and globally. Data on these health factors and elements of the food supply chain are needed to predict beyond a short time frame. In this regard, we discuss three ongoing considerations—ease of capital flows, international exchange, and maintaining transportation—that will help ensure food availability in the longer run.     

The Effect of the Structural Adjustment Program on the Output,Prices and Exports of Major Agricultural Export Crops in Nigeria

The primary objective of this paper is to examine changes in the level of output, prices and exports of major export crops resulting from the Structural Adjustment Program (SAP) in Nigeria. THere two main sources of data: the Central Bank of Nigeria (CBN) through its annual reports, Economic and Financial Review, and the Nigerian Federal Office of Statistics (FOS) through its Trade Summaries. Although the SAP led to appreciable increases in output and producer prices, its effects on exports were insignificant. The implications of these for the implementation of the program are explored.     

Cash cropping and food crop productivity: synergies or trade‐offs?

The case for promoting export‐oriented cash crops in Africa has generally been based on their direct potential contribution to agricultural productivity and small farmer incomes. A relatively neglected avenue of research concerns the synergistic effects that cash cropping can have on other household activities, including food production. The conventional view that cash crops compete with food crops for land and labour neglects the potential for cash crop schemes to make available inputs on credit, management training, and other resources that can contribute to food crop productivity, which might otherwise not be accessible to farmers if they did not participate in cash crop programs. This article builds on previous research by hypothesising key pathways by which cash crops may affect food crop activities and empirically measuring these effects using the case of cotton in Gokwe North District in Zimbabwe. Analysis is based on instrumental variable analysis of survey data on 430 rural households in 1996. Results indicate that—after controlling for household assets, education and locational differences—households engaging intensively in cotton production obtain higher grain yields than non‐cotton and marginal cotton producers. We also find evidence of regional spill‐over effects whereby commercialisation schemes induce second round investments in a particular area that provide benefits to all farmers in that region, regardless of whether they engage in that commercialisation scheme. The study suggests that the potential spill‐over benefits for food crops through participation in cash crop programs are important to consider in the development of strategies designed to intensify African food crop production.     

Is Exchange Rate Pass-Through in Pork Meat Export Prices Constrained by the Supply of Live Hogs?

The impact of lags in the production and marketing of agricultural products on the degree of exchange rate pass-through in export prices is investigated. The predictions of the theoretical model are tested by investigating Canadian pork export prices in the United States and Japan. The empirical methodology accounts for unit root and cointegration using the dynamic seemingly unrelated regression framework and a minimum distance estimator. Predetermined hog supplies have a statistically significant impact on export prices of two out of three Canadian provinces. The degree of misspecification involved with standard pass-through models that do not account for production lags is also illustrated.     

How sensitive is U.S. agricultural trade to the bilateral exchange rate? Evidence from bulk,intermediate, and consumer‐oriented products

This article examines the dynamic effects of changes in bilateral exchange rates on changes in bilateral trade of bulk, intermediate, and consumer‐oriented agricultural products between the United States and its 10 major trading partners. We find that, for consumer‐oriented products, U.S. exports are highly sensitive to bilateral exchange rates in both the short and long run, while U.S. imports are mostly responsive only in the short run. For bulk products, on the other hand, U.S. exports and imports are relatively insensitive to exchange rate changes in both the short and long run. For intermediate products, exports and imports are responsive to exchange rate changes in the short run, but not in the long run. It is also found that income of the United States and its trading partners has a significant effect on U.S. exports and imports of the three types of agricultural products in both the short and long run.     

Estimation of dynamic maize supply response in Zambia

Increased attention on government pricing policies among African nations leads directly to a need for information about producer responses to price adjustments. This is especially true in the case of Zambian maize production. Maize is the most important crop grown in Zambia. It accounts for more than 80% of the value of marketed food crops, is heavily relied on for subsistence consumption, and is a staple food in the diet of all Zambian citizens. This paper analyzes the aggregate price response of maize supply in Zambia using a dynamic regression analysis. As a result, short, intermediate and long-run multipliers/elasticities are measured which can be used to analyze the effect of future price policy changes. It was found that a second-order rational distributed lag model best fits the available data. Estimates of short-run elasticities of supply for maize and fertilizer prices are 0.54 and –0.48, respectively. The corresponding estimated long-run elasticities are 1.57 and – 1.44.     

The effect of barge and ocean freight price volatility in international grain markets

Short‐run responses of export and domestic shares of total agricultural output to changes in stocks of domestic savings (SAV), development assistance (ODA), private foreign commercial capital (PFX) and other variables is investigated. A profit function approach is used. Time series data for 19 sub‐Saharan African countries are pooled into three panels using similarities in changes in economic policy regime. Statistical evidence suggests that for the panel of countries that were undertaking liberalized economic reforms, the slope coefficients of some of the variables in the models have changed significantly between 1970–1980 and 1981–1993. For the 1981–1993 period, the impacts of ODA, PFX and SAV on export and domestic shares were different for this panel. The effect of increases in agricultural labor was different across the three panels. There is also evidence that productivity growth in the export agriculture sub‐sector is negative in all the groups. It is recommended that to halt the decline in export share of agricultural output in the group of countries that have undertaken substantial improvements in economic policy environment, efforts must be made to reduce the negative impact of domestic savings and agricultural labor, while at the same time working to reduce the bias of development assistance against food security.     

产销平衡区粮食安全评价及形势分析——以甘肃省为例

[目的]粮食安全是社会稳定、经济发展的基础和前提,评估粮食安全状况、分析粮食安全形势,可为科学选择新时期粮食安全战略路径、推进乡村振兴战略实施,促进经济持续发展、构建生态屏障提供决策依据。[方法]文章以粮食产销省份甘肃省为区域,选择粮食产消、粮食供需、口粮保障、粮食储备、粮食流通和粮食生产等6个指标,系统评价2010—2020年区域粮食安全状况;运用产销平衡区粮食安全预警模型,评估近10年甘肃省粮食储备、流通和供需等结构体系的安全性;采用GM (1, 1)模型和线性回归组合模型预测粮食生产趋势,评估近10年甘肃省粮食生产的稳定性。[结果]（1）甘肃省粮食自给率高,人均粮食生产占有量达到了FAO要求的安全水准以上,粮食储备充裕并逐步向合理的储备规模调整,省内外粮食购进和外销保持稳定的流通态势,粮食总供求个别年份出现短缺轻警,总体保持紧平衡态势。（2）2021—2030年甘肃省粮食产量趋势增加,变化范围在1 159万～1 335万t,粮食生产实际产量高于趋势产量,但粮食生产波动指数年际间变幅较大,粮食生产的稳定性欠佳,且主要的口粮作物小麦呈隐性减产态势。[结论]（1）政策支持、财政资金扶持...