Local compensation payments for agri-environmental externalities: a panel data analysis of bargaining outcomes

We analyse local compensation payments made to farmers for providinglandscape amenities in Alpine tourist communities. These paymentsresult from political bargaining at the municipal level. Paneldata estimation shows that the probability of introducing compensationpayments depends positively on the benefits of landscape amenities.Although no impact of service provision cost is found, transactioncosts at different levels of the bargaining process reduce theprobability of payments. Compensation payments mainly occurin communities where the provision of agricultural landscapeservices is perceived as relatively low and the diversity ofthe countryside seems to be endangered. We argue that municipalcompensation payments are an important supplement to nationaland European Union policy measures in support of less-favouredareas.     

Regional Cooperation in the Use of Irrigation Water: Efficiency and Income Distribution

The paper presents an analysis of the economic potential of regional cooperation in water use in irrigation under conditions characterized by a general trend of increasing salinity. Income maximizing solutions for the region are derived and the related income distribution schemes are solved for, with the aid of cooperative game theory algorithms and shadow cost pricing. Distinction is made between distribution policies with and without side payments. The reasonableness and the acceptability of these schemes is later critically evaluated. The Nash-Harsanyi approach seems to be the most appropriate for the conditions studied.     

The Empirical Distribution of the Costs of Revenue-Based Commodity Support Programs—Estimates and Policy Implications

This paper demonstrates how the density function of the U.S. domestic commodity support payments for corn differs between current price-based approaches to support and a revenue-based alternative. Comparing across program scenarios that provide equal expected levels of support at the national level, the revenue-based scenario exhibits a lower variability around total expected annual payments, and perhaps more importantly, a lower probability of high payments than the current-style support. Furthermore, for the vast majority of corn-producing counties in the United States, the coefficient of variation of total gross revenue per acre is lower under the revenue-based support scenario than under the current-style scenario.     

Beggar-Thy-Neighbor Advertising: Theory and Application to Generic Commodity Promotion Programs

Profits from generic advertising by a producer group often come partly at the expense of producers of closely related commodities. The resulting tendency toward excessive advertising is exacerbated by check-off funding. To analyze this beggar-thy-neighbor behavior we compare a scenario where different producer groups cooperate and choose their advertising expenditures jointly to maximize the sum of profits across the groups, and a scenario where they optimize independently. In an illustrative example using 1998 data for U.S. beef and pork, the noncooperatively chosen expenditure on beef and pork advertising is more than three times the cooperative optimum.     

Markups,organic agriculture and downstream concentration at the example of European dairy farmers

A competitive environment, highly concentrated processing and retailing sectors as well as increasing decoupling of direct payments from production volumes and the area under cultivation incentivizes farmers to find alternative ways to improve their bargaining position towards downstream companies. This article explores the possibilities of organic agriculture to enhance the bargaining power of farmers along with the role of concentration in downstream industries. Using a dataset with more than 200,000 observations from approximately 40,000 dairy farms, I estimate markups of price over marginal cost in dairy farming as a measure of market power in the EU. The results show that organic farmers achieve a significant markup premium over conventional farmers. With increasing market shares of organic milk in total milk production markups of conventional farmers diminish whereas those of organic farmers are unaffected. Farm-level markups decrease with increasing market shares of medium-sized dairy processors and increase with increasing market shares of large processors. The presence of large multinational retail chains shows an adverse impact on farmers’ markups.     

“绿水青山”建设时代退耕还湿问题博弈分析

以博弈论为分析工具,以信息的完备性为分断点,基于退耕还湿政策的有效性趋势,分别从委托-代理与讨价还价两种模型对"绿水青山"建设时代退耕还湿主体的策略选择进行讨论,并从无限重复博弈分析中归纳合作的可能性。研究表明:无论从何种机制进行探讨,农户和政府的合作是必然和有效的;从主体角度分析,推进退耕还湿能促进参与主体互利。因此,建议加大补偿弹性与优化惩罚机制并重、工作透明化与补偿多元化相结合、普及湿地潜在价值以让农户更注重长远利益,为退耕还湿推广和实施、湿地恢复和保护提供理论借鉴。     

Abstracts of Award-Winning Theses

This thesis determines the tradeoff between producer welfare and the provision of environmental benefits, through reduced soil erosion and fertilizer applications, on agricultural working land. A land-use allocation model of two Iowa counties is formulated as a mathematical programming problem, building upon the Takayama and Judge framework. Slope is used to reflect terrain heterogeneity, such that the spatial allocation of land-use practices impacts economic and environmental outcomes via a yield damage function and differentiated rates of soil erosion. The model differs from prior empirical models in that it includes both crop and livestock production, which gives the model the flexibility to choose whether the two activities are optimally nonseparable.
Price policy analysis indicates that the land use allocation is relatively insensitive to changes in commodity prices, i.e., altering commodity-based support payments is insufficient to attain environmental improvements. Several "green" policy instruments are simulated to estimate the cost to producers of reducing environmental damages. Limiting soil erosion with either a regulatory standard or a per unit tax reduces the average return to land by 10%. Shifting current income support payments into a system of payments for conservation land management practices, similar in essence to the Conservation Security Program, cannot attain the same soil erosion reduction with less cost to producers. Overall, the inelastic response of land use practices to commodity prices indicates that targeting the use of productive inputs, as opposed to commodity outputs, may be a more efficient means of attaining environmental improvements.     

Passive farming and land development: A real options approach

The EU's farmers are no longer required to produce commodities to receive direct payments as long as they keep their land in good condition. Some believe this is bad for development because it encourages passive farming. We evaluate, using a real options approach, the implications of decoupled payments for the desirability and optimal timing of agricultural land development when considering sunk investment costs and uncertain future returns. We find that decoupled payments accelerate development while passive farming increases, by adding managerial flexibility, the value associated with land. We then use the Nash bargaining solution to identify the rental share to be paid for leasing land. We show that a deal for the lease of land can always be reached, but that the facility to use passive farming as an outside option allows landowners to extract policy rents, thereby undermining the potential for the Basic Payment Scheme to support tenant farmers’ incomes.     

GENERIC PROMOTION OF BEEF: MEASURING THE IMPACT OF THE US BEEF CHECKOFF

Generic promotions of commodities are growing in importance. In the US, commodity industry assessments or checkoffs (i.e. a per unit levy or tax) are used to underwrite domestic and international promotions by commodity groups. The US beef checkoff is one of the largest of these new national commodity programmes. Evaluation of the economic impact of the beef promotion is an essential part of the beef checkoff. A model for evaluating the US beef programmes is estimated and the methodology is applicable to other commodity models that include advertising and promotion expenditures. The beef analysis shows a positive and significant return to the beef industry, with an average of approximately $5 for each $1 invested for the quarters 1987:1 through 1991:2.     

Measuring the Effects of Generic Dairy Advertising in a Multi-Market Equilibrium

We develop a multi-market equilibrium displacement model that allows demand linkages across downstream product markets, and supply linkages through the common use of a raw commodity as the key input. Applying the model to the dairy sector, we find that the effectiveness of producer-funded advertising depends on the demand relationships across dairy product markets (cross-price and cross-advertising elasticities) as well as the reallocation of milk toward the advertised market. We show that the previous literature, which ignores the horizontal linkages highlighted here, tends to overstate the effectiveness of generic commodity promotion for dairy, and thus results in too much advertising.     

Welfare impacts of technological change on women in southern Mali

It has often been hypothesized that new agricultural technologies could have an adverse impact on women because additional labor required of them reduces the time spent and therefore income earned from private-field activities. This study shows that the expansion of cotton cultivation on the household communal fields in southern Mali associated with the introduction of new technologies results in increased payments to women for their increased labor on the cotton fields. Unfortunately, these payments are small compared to the loss of revenue from private-plot production. Thus, the net effect of the expansion of household cotton cultivation is a reduction in incomes of women who cultivate private plots. Short-run policy implications of this study are that improving women's income requires concern with their private - plot earnings. For example, profitability of the private-field crops could be increased with higher input use. In the long run, as land becomes even more constrained, emphasis needs to be placed on institutional changes to increase women's bargaining power so that they obtain larger shares of the new income streams resulting from technological change on the communal field. Institutional changes already occurring in the region, with the apparent objective of increasing women's (and non-household head men's) bargaining power, include organized work teams and the movement toward smaller, nuclear families.     

基于Nash-Bargaining的区域内水权交易合作议价模型研究

针对江苏省水量水质双缺型水资源冲突问题,基于准市场交易模式,考虑水权交易决策主体各自议价能力,引用合作博弈理论方法,构建区域内跨行业水权交易Nash-Bargaining议价模型,并给出准市场条件下水权交易的最优价格。以江苏省工业、农业之间跨产业水权交易为例开展实例研究,分析交易水量、议价能力对水权交易价格的影响。研究成果表明:水权交易总量与水权交易单价呈现正向相关关系,但水权交易单价存在上限,价格天花板受政府部门调控影响;水权交易能够有效提升江苏省工农业主体的收益,同时交易水量与交易价格的升高均能够有效提升江苏省整体社会福利;在高交易水量情况下,水权交易购买方的议价能力对提升水权交易整体福利具有更强的作用。     

Management of a Cooperative Bargaining Association: A Case in the Pacific Northwest Asparagus Industry

Bargaining cooperatives are formed and operated with the primary goal of providing countervailing market power for many small producers faced with selling their product to a few large buyers. This case study outlines the management challenges encountered in organizing and managing a bargaining association to represent Washington and Oregon asparagus growers in contract negotiations with asparagus buyers. Industry events and changing marketing conditions leading to a management crisis that threatened survival of the cooperative are outlined. The case introduces relationships between fresh and processed market segments in the produce industry that must be carefully incorporated into a successful management strategy for a bargaining cooperative.     

20世纪上半叶的农村合作化--以民国江西农村合作运动为中心的考察

1930-1940年代国民政府江西省政当局着力推行的农村合作运动已经具有明显的合作化特征。农村合作化运动体现了江西省府推进合作事业的广度与力度，成为江西农村近代化进程的重要推动力；同时也体现出国家对乡村社会的渗透和影响，这是现代民族国家建构的必然趋势和现代国家政府职能的显现。透过这一过程可以观察到国家政权的强制、社会互动的错位、合作互助初哀的背离。正是合作化导致了社会经济领域中国家-基层社会关系的扭曲和错位。     

Cooperatives and the Commodity Political Agenda: A Political Economy Approach

Historically, major agricultural cooperatives in Canada have been intimately involved in commodity policy issues. Large cooperatives were created because farmers were upset about the perceived lack of competition in buying farm inputs or selling farm outputs. Often, the resulting cooperative was the organization farmers saw as the logical organization to represent their view of commodity policy or competition policy. As cooperatives grew and diversified, the ability to represent their members coherently across policy issues was hampered. For processing cooperatives in the supply-managed sector, the requirement that the cooperative be the political arm of industry, process product, and provide maximum returns to producer members made for a complicated objective function. This paper focuses on the twin objectives of providing efficient member services and performing political lobbying in a public choice framework. The results are illustrated by the recent history of a supply-managed further-processing cooperative and a diversified grain cooperative.     

What role for cooperation in conservation tenders? Paying farmer groups in the High Andes

This paper sheds light on the potential of group-level tenders to enhance conservation where it depends on cooperation of small-scale farmers. We analyze data from two pilot payment for ecosystem service (PES) schemes focused on the conservation of agricultural biodiversity in the Bolivian and Peruvian Andes. Contracts were assigned to farming groups who could choose between different types of in-kind payments with varying degrees of divisibility between group members. Our main results indicate that: (1) stronger general patterns of collective action are positively related to the level of cooperation in group-bid making; (2) where collective action is robust, collective payments seem to provide stronger conservation incentives than individual payments; (3) collective payments could mitigate some potential rent-seeking behavior; (4) selecting bid offers based on both a ‘cooperation’ criterion and conservation land area offered does not overly compromise the cost-effectiveness of PES; and (5) group-level contracts may create strong incentives for contract compliance. Hence, combining farmer group-level contracts with collective in-kind payments can enhance the cost-effectiveness of conservation tenders, while generating co-benefits in terms of increased interaction and social capital among group members.     

Rules, Policy and Rent Seeking: A Cross-border Comparison

The United States and Canada are similar in many ways, yet they have taken different approaches to agricultural policy. This paper discusses what affect the different constitutional arrangements have had on the development of agricultural policy. Constitutions can affect the policy bargaining process in several ways: they determine who has access to the bargaining process, what is the legal set of policy options and what is the admissible coalition. The two countries' Constitutions differ in where regions have access to the bargaining process, the use of the courts and the size of the admissible coalition. These differences have led to divergent policies, which are evidenced by the response to the recent drop in commodity prices.     

Analysing Farm‐specific Payments for Norway using the Agrispace Model

Norway maintains a complex system of activity or type specific coupled payments which account for a large share of farm income. Most of the payment rates are negatively related to farm size and are higher in remote areas compared to central regions. We present and use a newly developed recursive‐dynamic multi‐commodity model (Agrispace) with CES production functions depicting regional farm clusters derived from the full farm population. Using this model, we simulate impacts of current and alternative subsidy policies on production, prices, input use, income and farm structural change. Mapping cluster results to each farm along with behavioural rules allows estimation of individual profits and farm exits. Our results indicate that, in the short run, the current policy regime seems to support the policy objective of maintaining a variety of farms in all parts of Norway. In the long run, farm structural change is less affected by a policy reform that leaves total support levels unchanged.     

Factors affecting municipal land use cooperation

This paper evaluates the factors affecting voluntary municipal land use cooperation in Michigan where neither substantial mandates nor incentives for such cooperation exist. Cooperation is conceptualized as the formality of land use cooperation. This paper uses quantitative data obtained through surveys of chief elected officials and finds that the extent of internal municipal support for cooperation, whether elected officials anticipate benefits from cooperation, and the effectiveness of regional institutions at providing supportive services for cooperation have positive impacts on the formality of land use cooperation. The amount of cooperation on services and a regional cooperative culture impact the formality of land use cooperation negatively.     

Household-level effects of China's Sloping Land Conversion Program under price and policy shifts

This study examined how agricultural households involved in China's Sloping Land Conversion Program (SLCP) could respond to expected changes in environmental and livestock policies and changing commodity prices. We calibrated a farm household model using 2009 survey data collected in northeast Gansu Province, China, and examined the responses of four different household groups. Household groups were distinguished based on the resources they possessed for either cropping, livestock husbandry or off-farm employment. We also calculated the opportunity cost of converting sloping land from grain crop production to perennial grass production and included the net value of the replacement crop in these calculations. Our model simulations indicated that subsistence-oriented households were most likely to participate in the SLCP, and that SLCP payment reductions could have large negative income effects for this group. Reductions in SLCP payments increased income inequality among households in the study area. Migration- and cropping-oriented households have fewer incentives to participate in the SLCP. With rising commodity prices, SLCP payments need to rise to avoid that subsistence-oriented households reconvert their land from perennial grasses to annual grain crops. Local government policies related to livestock production are being devised in Gansu as a method to lift incomes, and these policies could also have positive environmental benefits by increasing grass production on sloping land. The introduction of these livestock promotion policies had modest income effects but did not alter the area grown with grasses under the SLCP.