Yield and income effects of rice varieties with tolerance of multiple abiotic stresses: the case of green super rice (GSR) and flooding in the Philippines

With the increasing frequency of extreme climatic events, the new challenge is to develop rice varieties that are tolerant of drought, water submergence, and salinity. There are now new high‐yielding green super rice (GSR) cultivars developed at the International Rice Research Institute with increased tolerance to multiple abiotic stresses. But a clear understanding of the economic benefits of these varieties under farmers’ production environments is not yet fully understood. In this article, we assess the yield and income effects of GSR rice varieties using a two‐year panel data from one province. We use matched samples from a propensity score matching method and a fixed‐effects model within a difference‐in‐difference (DID) framework to estimate the yield effects. The income effects were evaluated using the parameter estimates from the yield/production function model. The results of the ordinary least squares and DID fixed‐effects regressions reveal significant and positive effects of GSR varieties on yield. The most important finding is that the benefits from these varieties are strongly felt when there is flooding. This evidence was not as robust when matched samples were used. However, it is clear that the yield benefits from GSR varieties could improve rice food security and help alleviate poverty in the country.     

Ex ante analysis of the benefits of transgenic drought tolerance research on cereal crops in low-income countries

This article develops a framework to examine the ex ante benefits of transgenic research on drought in eight low-income countries, including the benefits to producers and consumers from farm income stabilization and the potential magnitude of private sector profits from intellectual property rights (IPRs). The framework employs country-specific agroecological–drought risk zones and considers both yield increases and yield variance reductions when estimating producer and consumer benefits from research. Benefits from yield variance reductions are shown to be an important component of aggregate drought research benefits, representing 40% of total benefits across the eight countries. Further, estimated annual benefits of US$178 million to the private sector suggest that significant incentives exist for participation in transgenic drought tolerance research.     

Evaluation of drought management in irrigated areas

This paper focuses on the economic consequences of droughts for the irrigation sector. We develop a dynamic‐recursive mathematical programming farm model that assumes imperfect mobility of capital and labour as well as rational expectations about future water availability. The model is calibrated to 12 representative farms belonging to three irrigation communities of the Guadalquivir Basin (south Spain) and used to simulate the 1991–1997 period, which included 3 years of intense drought. Results indicate that the drought imposed significant costs on farmers, but show also that water managers partly exacerbated these costs by allocating excessive amounts of water to irrigators in the abundant years. The model is also used to evaluate the benefits of a perfect water supply forecast and to simulate the economic gains of a voluntary water banking scheme. Results show that the benefits resulting from the perfect forecast of water supply 1 year ahead would represent a relative gain of 5%. However, a voluntary banking system would allow farmers to increase their benefits by 32–82% depending on the supply system.     

Returns to public sector plant breeding in the presence of spill‐ins and private goods: the case of bean research in Michigan

This article illustrates a methodology for assessing economic returns to a publicly funded breeding program in the presence of private sector investments, and spill‐ins from other contemporary public institutions and past research efforts. The approach consists of determining yield gains from bean improvement research; applying these yield gain estimates to measure benefits attributable to different institutional players and time periods; and then assessing the benefit‐cost ratios of investments in a bean improvement program since 1980 by Michigan State University (MSU). The results indicate that investments in MSU's bean breeding program have yielded benefits to costs ratio in the range of 0.7 to 2.2, depending on the attribution rule used to estimate the benefits. The estimated benefit/cost ratios reported in this study are lower‐bound estimates, as they do not account for potential benefits from area planted to MSU varieties outside of Michigan (spillover effects), which was 1.5 times greater than the area planted to MSU‐bred varieties within Michigan in the period 1998–2002. The implications of the increasingly privatized bean seed markets for the role of public sector research in bean improvement research are discussed.     

Productivity impact of drought tolerant maize varieties under rainfall stress in Malawi: A continuous treatment approach

Drought tolerant (DT) maize varieties have received massive support in sub‐Saharan Africa because of their potential to protect smallholder farmers against drought‐related maize yield losses. Using four waves of household farm panel data from six districts in Malawi, we examine the impact heterogeneity of this technology on maize productivity using a continuous treatment approach. We find strong evidence of positive correlation between maize yield and adoption of DT maize varieties. On average, an increase by one hectare in the area allocated to DT varieties increases maize yield by 547 Kg/ha representing a 44% increase from the average maize yield of 1,254 Kg/ha for our sample. Our findings give evidence that DT maize technology has potential to protect smallholder farmers against drought‐related production losses. Policies that promote increased allocation of maize area to DT maize hold potential to enhance food security. Smallholder farmers especially in drought‐prone areas should be encouraged to allocate at least one‐third of the maize plot to DT varieties while breeders continue with the efforts of breeding a DT variety that is not only drought tolerant but also adapted to all weather conditions. More importantly, the government should ensure provision of timely ex ante weather information to guide farmers on decision‐making with respect to maize varietal choices.     

Farm demand for quality potato seed in Indonesia

Seed is the one of the most costly components of potato production in developing countries. Since potato is a vegetatively reproduced crop, diseases such as viruses build up and yield declines as tubers are saved from one harvest for use as seed the next season. Replacing farm‐saved seed with clean seed is one means to increase yield, but information asymmetry between buyers and sellers on seed quality may restrict market supply of this input. In this article we develop a model of the seed market in which clean seed is treated as a capital good providing benefits over several seasons. To determine farm demand for clean seed, we conducted a survey of 182 potato farmers in the major potato growing areas of Indonesia to elicit their perceptions of seed quality from different sources, and derive farmers' “willingness‐to‐pay” for quality potato seed. Results indicate that the effects of information asymmetry on seed supply may be partially offset by the “reputation” of specialized seed producers. Nevertheless, marginal returns to disease‐free seed appear to significantly exceed marginal costs, indicating that improving supply of quality seed will contribute strongly to productivity growth in potato. We discuss several policy options to encourage supply and utilization of quality potato seed.     

Adding value to spatially managed inputs by understanding site-specific yield response

Many mechanized crop producers and agribusinesses are fascinated with precision agriculture technology, but adoption has lagged behind the expectations. Among the reasons for slow adoption of precision agriculture technology is that initial users focused excessively on in‐field benefits from variable‐rate fertilizer application using regional average fertilizer recommendations. This article illustrates how greater use of site‐specific crop response information can improve variable rate input application recommendations. Precision agriculture is spatial information technology applied to agriculture. The technologies include global position systems (GPS), geographic information systems (GIS), yield monitoring sensors, and computer controlled within‐field variable rate application (VRA) equipment. Experimentation with these technologies is occurring everywhere there is large scale mechanized agriculture. Commercial use has been greatest in the US, where 43% of farm retailers offered VRA services in 2001. Except for certain high‐value crops like sugar beet, farmer adoption of VRA has been modest. The farm level profitability of VRA continues to be questionable for bulk commodity crops. The theoretical model and illustration presented here suggest that VRA fertilization has not yet reached its profitability potential. Most VKA field trials to date have relied upon existing state‐wide or regional input rate recommendations. Unobserved soil characteristics can potentially interact with an input to make its effect on yield vary site‐specifically within fields. Failure to use site‐specific response functions for VRA applications may lead to a misallocation of inputs just as great as that which results from using uniform applications instead of VRA. Agricultural economists have a long history of estimating output response to input applications. Several have started to develop tools to estimate site‐specific responses from yield monitor and other precision agriculture data. Likewise, agricultural economists have developed an important body of research results on information value based on managing variability—typically in temporal settings. With these tools, a major potential exists to develop further benefits from precision agriculture technologies that permit truly spatially tailored input applications.     

Differentiating the consumer benefits from labeling of GM food products

Although recurrent evidence is found that consumers have different willingness to pay for GM and non-GM products, there is disagreement in the scientific community about the size of consumer benefits from GM labeling. In this article we use a theoretical model based on a standard constant elasticity of substitution (CES) to explain the importance of the quality effect. It is shown that failing to consider the quality effect may yield an overestimation of benefits from GM labeling, voluntary or mandatory.     

Agricultural technology adoption and child nutrition enhancement: improved maize varieties in rural Ethiopia

Adoption of improved crop varieties can lead to multiple benefits to farm households, including increased productivity, incomes, and food consumption. However, possible impacts of adoption on child nutrition outcomes are rarely explored in the literature. This article helps bridge this gap through an impact assessment of the adoption of improved maize varieties (IMVs) on child nutrition outcomes using a recent household survey from rural Ethiopia. The conceptual linkage between IMV adoption and child nutrition is first established using an agricultural household model. Instrumental variable estimation suggests the overall impacts of adoption on child height‐for‐age and weight‐for‐age z‐scores to be positive and significant. Quantile instrumental variable regressions further reveal that such impacts are largest among children with poorest nutrition outcomes. Finally, by combining a decomposition procedure with system of equations estimation, it is found that the increase in own‐produced maize consumption is the major channel through which IMV adoption affects child nutrition.     

Farmer-to-farmer technology diffusion and yield variation among adopters: the case of improved cowpea in northern Nigeria

This article examines the magnitude and sources of yield variation among adopters of improved cowpea varieties in northern Nigeria promoted through farmer‐to‐farmer diffusion. The results reveal important efficiency differences between the lead farmers who have contacts with breeders and the follower farmers who get technology and information from the lead farmers. Differential adoption of the package of seed, insecticide, fertilizer, and recommended cereal‐cowpea cropping pattern provides much of the explanation for yield variation among adopters. The component often missing, and hence accounting for much of the yield variation, is the crop management technology relating to the cereal‐cowpea cropping pattern. No efficiency variation is attributed to the source of technology and information, such as whether improved cowpea was obtained from breeders or lead farmers. Technology source has a rather indirect influence on efficiency through its effect on package adoption where breeders promote greater package adoption among the lead farmers than the lead farmers do among the follower farmers. Possible ways of disseminating crop management technological information through the farmer‐to‐farmer technology diffusion are recommended to better exploit the yield and profitability potentials of improved cowpea varieties in northern Nigeria.     

Technology adoption under seed access constraints and the economic impacts of improved pigeonpea varieties in Tanzania

Dry‐land legumes, well adapted to drought‐prone areas, have largely been neglected in the past despite the good opportunities they offer for income growth and food (and nutritional) security for the poor. This study evaluated the adoption and impact of two farmer and market‐preferred and disease‐resistant pigeonpea varieties that were developed and promoted in semi‐arid Tanzania. The new varieties were resistant to fusarium wilt, a fungal disease devastating the crop. However, farmers wanting to adopt new varieties did not adopt due to seed access constraints and under‐developed seed delivery systems. Adoption of new varieties is therefore analyzed using an augmented double hurdle model that allows estimating variety adoption conditional on seed access thresholds accounting for the additional information on sample separation. The study identifies the crucial role of seed access (local supply), extension, education, participatory decision making, capital, and household assets in determining adoption. The social economic benefits of the technology and policies for improved seed access were further analyzed using the extended economic surplus method (DREAM model). Even under restrictive assumptions, overall discounted benefits were found to be quite attractive, indicating the need for additional efforts to scale‐up the success story. Analysis of changes in research benefits from relaxing the seed access constraint showed that net gains would increase by up to 30% if farmer access to improved seeds can be assured. Smallholder farmers are the major beneficiaries along with consumers and rural net‐buyers who gain from productivity‐induced lower market prices.     

Land degradation, drought and food security in a less-favoured area in the Ethiopian highlands: a bio-economic model with market imperfections

This paper presents a bio‐economic model of Andit Tid, a severely degraded crop‐livestock farming system with high population density and good market access in the highlands of Ethiopia. Land degradation, population growth, stagnant technology, and drought threaten food security in the area. Drought or weather risk appears to have increased in recent years. The bio‐economic model is used to analyse the combined effects of land degradation, population growth, market imperfections and increased risk of drought on household production, welfare and food security. We find that the indirect effects of drought on household welfare through the impact on crop and livestock prices are larger than the direct production effects of drought. Provision and adoption of credit for fertiliser, although risky in itself, may lead to increased grain production and improved household welfare and food security. Provision of credit may have a negative effect on conservation incentives but this effect may be mitigated by linking a conservation requirement to the provision of credit for fertiliser.     

But are they Meritorious? Genetic Productivity Gains under Plant Intellectual Property Rights

The objective of this paper is to evaluate the effect of Plant Variety Protection (PVP) on the productive merit/yield increases of US seed varieties. As an example, we use wheat varieties, which are and have been available as both protected and unprotected under PVP from both the public and private sectors. We find evidence that PVP has contributed to the genetic improvement of wheat, using varietal trial data from Washington State. As the private open‐pollinated varieties exist only because of PVP and are higher yielding, these results indicate a clear public benefit from PVP.     

Property rights, production technology, and deforestation: cocoa in Cameroon

In this article, we use a vintage‐capital model with risk of eviction to assess cocoa farmers' response to changes in their tenure security and to the introduction of a new, faster‐maturing cocoa variety. The model is calibrated with data from Cameroon in calendar year 2000, and then used to simulate the effects of institutional and technical change on farmer welfare and deforestation rates. Our findings can be summarized in three points. First, improved tenure security over cocoa fields increases farmers' consumption and welfare, but at the expense of more deforestation. Second, the introduction of new cocoa varieties with faster maturity and higher input response also unambiguously raises farmers' consumption and welfare. Doing so increases deforestation under insecure land tenure, but slows down deforestation under secure land tenure. Third, when introducing the two innovations together (more security and also new varieties), there is both an increase in welfare and a decline in deforestation. In sum, the availability of new cocoa cultivars calls for stronger tenure security, to accommodate investment in the new technology without increasing deforestation.     

The economic impact of cowpea research in Senegal: an ex-post analysis with disadoption

This study evaluates the impact of a long‐term research collaboration between the Senegalese Institute for Agriculture Research (ISRA), and the Bean/Cowpea Collaborative Research Support Program (CRSP) funded by the U.S. Agency for International Development (USAID). Adoption of the primary outputs from this collaboration, a nonchemical cowpea storage method and two short‐season cowpea varieties, were tracked through a series of farmer interviews in 1996, 1997, and 2004 in the main cowpea growing area of Senegal. Combined with information from an impact assessment in the late 1980s, this study draws on ex‐post adoption data from most of the product life cycle for the storage technology. The 2004 survey found that 60.4% of cowpea production in the main cowpea growing area of Senegal is stored in metal drums and that 69% of households use this storage technology; ISRA/CRSP improved short season varieties were determined to account for 3.6% of cowpea production. Baseline economic analysis of the most recent survey data, which includes benefits and costs of the storage technology and improved varieties, reveal an IRR to donor funding of 13%. The benefits of these technologies appear to be evenly distributed in the rural population on the basis of gender and ethnic background. Comparison of the rates of technology adoption over time, however, reveals that use of the storage technology may be decreasing; inclusion of this technology disadoption trend reduces the IRR by only 0.4% from the baseline estimate. Overall, estimated returns reveal that this collaboration has been a good investment for the U.S. and Senegalese governments, and other donors.     

Investment in soil conservation in northern Ethiopia: the role of land tenure security and public programs

A double hurdle statistical analysis of 250 farms in the Tigray region of Ethiopia reveals different causal factors for soil conservation adoption versus intensity of use. Farmers' reasons for adopting soil conservation measures vary sharply between stone terraces and soil bunds. Long‐term investments in stone terraces were associated with secure land tenure, labour availability, proximity to the farmstead and learning opportunities via the existence of local food‐for‐work (FFW) projects. By contrast, short‐term investments in soil bunds were strongly linked to insecure land tenure and the absence of local food‐for‐work projects. Public conservation campaigns on private plots reduced adoption of both stone terraces and soil bunds. Whereas capacity factors largely influenced the adoption decision, expected returns carried more influence for the intensity of stone terrace adoption (measured as metres of terrace per hectare). More stone terracing was built where fertile but erodible silty soils in higher rainfall areas offered valuable yield benefits. Intensity of terracing was also greater in remote villages where limited off‐farm employment opportunities reduced construction costs. These results highlight the importance of the right kind of public interventions. Direct public involvement in constructing soil conservation structures on private lands appears to undermine incentives for private conservation investments. When done on public lands, however, public conservation activities may encourage private soil conservation by example. Secure land tenure rights clearly reinforce private incentives to make long‐term investments in soil conservation.     

Ex post impacts of improved maize varieties on poverty in rural Ethiopia

Public agricultural research has been conducted in Africa for decades. While many studies have examined its aggregate impacts, few have investigated how it affects the poor. This paper helps fill this gap by applying a new procedure to explore the ex post impacts of improved maize varieties on poverty in rural Ethiopia. Plot‐level yield and cost changes due to adoption are first estimated using instrumental variable and marginal treatment effect techniques where possible heterogeneity is carefully accounted for. A backward derivation procedure is then developed to link treatment effect estimates with an economic surplus model to identify the counterfactual household income that would have existed without improved maize varieties. Poverty impacts are finally estimated by exploiting the differences between observed and counterfactual income distributions. Improved maize varieties have led to a 0.8–1.3 percentage drop of poverty headcount ratio and relative reductions of poverty depth and severity. However, poor producers benefit the least from adoption due to the smallness of their land holdings.     

Impacts of considering climate variability on investment decisions in Ethiopia

Extreme interannual variability of precipitation within Ethiopia is not uncommon, inducing droughts or floods and often creating serious repercussions on agricultural and nonagricultural commodities. A dynamic climate module is integrated into an economy‐wide model containing a detailed zonal level agricultural structure. This coupled climate‐economic model is used to evaluate the effects of climate variability on prospective irrigation and infrastructure investment strategies, and the ensuing country‐wide economy. The linkages between the dynamic climate module and the economic model are created by the introduction of a climate‐yield factor (CYF), defined at the crop level and varied across Ethiopian zones. Nine sets of variable climate (VC) data are processed by the coupled model, generating stochastic wet and dry shocks, producing an ensemble of potential economic prediction indicators. Analysis of gross domestic product and poverty rate reveal a significant overestimation of the country's future welfare under all investment strategies when climate variability is ignored. The coupled model ensemble is further utilized for risk assessment to guide Ethiopian policy and planning.     

Regional Planning of Wastewater Reuse for Irrigation and River Rehabilitation

Subject to a few agri‐environmental restrictions, municipal wastewater can be utilised for agricultural irrigation and river rehabilitation. This paper develops a single‐year Planning Model for a region in Israel which consists of a city and three potential wastewater consumers. The model incorporates, in one endogenous system, the economic, physical and biological relationships in the water–soil–plant–environment system and its objective is to maximise the regional social welfare. The model determines the optimal crop mix and the optimal allocation of the limited water and land resources among all potential users. Then, different allocation approaches from the concept of transferable utility games are applied to determine a reasonable and fair allocation of the additional net benefits which will be acceptable to all the players. The results support the collaboration among the economic entities and indicate economic and environmental advantages which can serve the decision‐makers.     

Estimating the benefits of farm animal welfare legislation using the contingent valuation method

This paper presents the method and findings of a contingent valuation (CV) study that aimed to elicit United Kingdom citizens' willingness to pay to support legislation to phase out the use of battery cages for egg production in the European Union (EU). The method takes account of various biases associated with the CV technique, including ‘warm glow’, ‘part‐whole’ and sample response biases. Estimated mean willingness to pay to support the legislation is used to estimate the annual benefit of the legislation to UK citizens. This is compared with the estimated annual costs of the legislation over a 12‐year period, which allows for readjustment by the UK egg industry. The analysis shows that the estimated benefits of the legislation outweigh the costs. The study demonstrates that CV is a potentially useful technique for assessing the likely benefits associated with proposed legislation. However, estimates of CV studies must be treated with caution. It is important that they are derived from carefully designed surveys and that the willingness to pay estimation method allows for various biases.