Economic Dynamics of Tree Planting for Carbon Uptake on Marginal Agricultural Lands

As a result of the 1997 Kyoto Protocol, afforestation of agricultural lands can be expected to take on an important role in the CO₂ emissions reduction policy arsenal of some countries. To date, identification of suitable (marginal) agricultural lands has been left mainly to foresters, but their criteria fail to take into account economic nuances. In this study, an optimal control model is used to determine the optimal level of afforestation in the western Canada. The results indicate that, while planting fast-growing trees for carbon uptake on marginal agricultural land may be important, the path dynamics matter in determining whether Canada can rely on afforestation to meet its obligations under Kyoto.
Sous l'impulsion duprotocole de Kyoto (1997), on peuts'attendre à voirle reboisement des terres agricoles prendre une place importante dans l'arsenal de mesures de réduction des émissions de CO₂ de certains pays. Jusqu'à présent, le choix des terres agricoles utilisables (c.-à-d. marginales pour l'agriculture) a été laissé principalement aux forestiers, mais les critères sur lesquels ces derniers se basent ne tiennent pas compte des aspects économiques. Nous utilisons ici un modèle de contrôle optimal pour déterminer le niveau optimal de reboisement qui conviendrait pour l'ouest du Canada. Il se dégage des résultats que, sans remettre en question l'importance de la plantation d'arbres à croissance rapide pour la capture du C dans les terres agricoles marginales, les décideurs devront tenir compte de la dynamique des sentiers avant que le reboisement puisse ètre la solution adoptée par le Canada pour honorer les engagements pris dans le cadre du Protocole.     

The effect of afforestation on hydroelectricity generation: A quantitative assessment

Afforestation of catchments reduces water yield. On hydroelectric power catchments, land uses can be compared in terms of energy production. On the Maentwrog catchment, Wales, forestry appeared highly energy-efficient before inclusion of HEP losses, with ratios of energy input to energy output of 1:16–21. Inclusion of HEP losses reduced ratios to 1:0.9–3. A study of 41 sites on catchments in North Scotland showed that at the majority, afforestation would lead to net energy gain. However, in discounted cash flow terms, most potential afforestation sites were unprofitable when HEP losses were Included. The balance of advantage depends crucially upon the criterion chosen and site conditions. Afforestation at high elevations on catchments is unlikely to be justifiable.     

Agricultural Producer Price Expectations

Producer price expectations underlie much of agricultural supply analysis. While producer price expectations would ideally be discovered experimentally, this is too costly. Instead, producer price expectations are usually represented in agricultural supply analysis by easily obtained hypothesized expectation formulations. In most cases, the hypothesized expectation formulations are functions of past prices. However, other formulations are sometimes used, such as current cash and futures prices, or initial payments in the case of grains marketed by the Canadian Wheat Board. This paper compares actual producer price expectations with a variety of hypothesized expectation formulations for wheat and canola in Saskatchewan. A test developed by Granger is used to determine the proxy models that are significantly dominant. The model that dominates as a proxy in the case of wheat price expectations is the two-year declining-weight moving average. The two models that dominate as a proxy in the case of canola price expectations are the first-order autoregressive and, as well, the two-year declining-weight moving average. There is no significant difference between the two models. Somewhat surprising is the performance of formulations based on futures prices. These formulations perform very poorly in representing producers' price expectations, even though they are found to be among the most accurate predictors of actual commodity prices. An even more interesting observation is the performance of the futures price model in the canola market. Even though the November contract in January explains very little of the variation in the actual commodity prices for that year, its error in predicting canola prices is not significantly greater than that of the best performing, the four-year declining-weight moving average, based upon the root mean squared error criterion.     

Forestry in the Republic of Ireland: Government policy,grant incentives and carbon sequestration value

Recent decades have seen a rapid increase in the area of privately owned forest plantations in Ireland. This has been largely driven by grant aid and annual premium payments from the government and the European Union. These forests are significant carbon sinks and as such are delivering added benefit to the country by contributing to greenhouse gas reductions under the Kyoto Protocol.The direct impact of government subvention on the net present value (NPV) for a defined forestry plantation is investigated. The added value of carbon sequestration to forestry investment is also examined using the Forestry Commission (Great Britain) carbon model. Extending the typical assumption of a constant carbon price for project appraisal purposes, this paper allows carbon prices to evolve randomly according to a flexible stochastic price process. The model chosen is an extended mean-reverting jump-diffusion with the flexibility to capture the higher order statistical features (i.e. skewness and kurtosis) of the carbon markets. This allows for an analysis of the risk and uncertainty around the NPV from exposure to stochastic carbon prices. It is shown that government grants and annual premiums for afforestation significantly improve the NPV on forestry investment. Carbon sequestration is shown to add further value.     

Investment and Productivity in Canadian and U.S. Food Manufacturing

A restricted cost function model of Canadian and US. food manufacturing shows that productivity growth rates in Canada have remained well below those in the United States for the past decade and a half_: At mean factor prices, output, and capital quantities, processing costs would be 22% lower in the U.S. than in Canada. Technical change in both countries has been labor-saving and material-using, although slightly more so in the US. than in Canada. The labor-saving bias of technical improvements puts Canada at a disadvantage to its southern neighbor, since food manufacturing wages in Canada tend to be lower and material prices higher than in the United States. Enhancing its competitiveness will require that Canada reduce raw food and packaging costs or invest more in research and development .
L'estimation d'une function constraint de coût démontre que le taux de productivité du secteur de la transformation des aliments et boissons au Canada est demeuré inférieur à celui des Etats-Unis depuis une quinzaine d'années. En effet, à la moyenne du prix des intrants, du stock de capital et de la quantité produite, le coût de production américain est de 22 % inférieur à celui du Canada. Dans les deux pays, le changement technologique a permis de substituer le matériel à la main-d'oeuvre, et ceci de façon plus prononcée aux Etats-Unis. En bout de ligne, ceci désavantage le secteur canadien des aliments et boissons puisque les salaires sont généralement inférieurs au Canada alors que le matériet est plus coûteux. Le Canada pourrait améliorer sa compétitivité face aux Etats-Unis en réduisant le prix des denrées et des entrées intermédiaires ou en augmentant l'investissement dans la recherche et le développement .     

Designing afforestation subsidies that account for the benefits of carbon sequestration: A case study using data from China's Loess Plateau

This paper presents a method for determining the subsidy required to motivate farmers to participate in timber afforestation programs designed to maximize social well-being. The method incorporates a carbon sequestration benefit function into the land expected value model in order to quantify the social benefit arising from carbon sequestration by the planted trees. This is used to calculate the optimal rotation age for newly planted forests that maximizes social utility. The minimum subsidy required to motivate farmers to participate in the afforestation program was calculated using a modified decision model that accounts for the subsidy's impact. The maximum subsidy offered by the government was taken to be the NPV of the carbon sequestration achieved by afforestation. Data on Robinia pseudoacacia L. trees planted on the Loess Plateau were used in an empirical test of the model, which in this case predicts an optimal subsidy of 254.38 yuan/ha over 40 years. This would guarantee the maintenance of forest on land designated for afforestation until they reached the socially optimal rotation age. The method presented herein offers a new framework for designing afforestation subsidy programs that account for the environmental service (specially, the carbon sequestration) provided by forests.     

Relationships between U.S. and Canadian Wheat Prices: Cointegration and Error Correction Approach

This paper examines relationships between U.S. and Canadian wheat prices using the cointegration and error correction approach. The use of the error correction model is appropriate because U.S. and Canadian wheat prices are first-differenced stationary and cointegrated. The results suggest that both U.S. durum and hard spring wheat prices respond to restore equilibrium relationships with the corresponding Canadian price, while the Canadian prices do not. That is, the structure of the respective policies is such that the Canadian markets are largely insulated from influences flowing directly from the U.S., while U.S. markets are not insulated from Canadian influences. These results could be interpreted to support the contention that Canadian production subsidies and the implicit export subsidies would tend to undermine the U.S. price support program. The results also support the price leadership role for Canada in the durum and hard spring wheat markets. The implication is that with respect to durum and spring wheats, U.S. policies to artificially support domestic prices are not effective over the long run. Les rapports entre les prix de blé canadiens et américains sont étudiés á partir des analyses basées sur la cointégration et la méthode de correction des erreurs. L'emploi de la méthode de correction des erreurs est approprié car les prix de blé canadiens et américains sont cointegres et stationnaires quand Us sont exprimes en changements (first differences). Les résultats montrent que les prix du blé dur (durum) et du blé panifiable du printemps (hard spring) aux États- Unis reagissent à l'évolution des prix canadiens pour retablir le rapport d'équilibre tandis que ceux du Canada ne sont pas influencés par les désequilibres. Ce résultat est explique par les differences entre les structures des politiques agri-coles quifont que les marches canadiens sont largement isoles des influences en provenance des États-Unis, ce qui n'estpas le cas pour les marches américains. Ces résultats pourraient vouloir dire que des subventions canadiennes à la production et à l'exportation ont mine les programmes américains de sou-tien des prix. Us sont également compatible avec l'idée que le Canada établit les prix sur ces marchés.     

Import and Retail Demand for Orange Juice in Canada

A six-equation structural model of the retail and import level demand for orange juice in Canada is estimated. Relative prices of Brazilian and U.S. imports are found to he important determinants of the quantity imported to Canada, and the Canadian market share for the U. S. and Brazil. Retail demand for orange juice in Canada is estimated to he price inelastic. The import level demand for U. S. product is estimated to he price inelastic while the import level demand for Brazilian product is estimated to he highly elastic. The final form of the model is used to simulate competitive price situations in the Canadian market.
On a fail un modèle eslimatif en six équations de la demande d'imponation el de vente au détail pour le jus d'orange au Canada. On a trouvé que les prix relatifs des importations brésiliennes et américaines jouent un rôle déterminant dans la quantilé d'importations sur le marché canadien et dans les titres floltants canadiens pour les Etats Unis et le Brésil. On estime que la demande, au niveau des détaillanls, pour le jus d'orange au Canada représente un prix fixe. On estime que la demande d'importations en produils brésiliens est des plus élastiques. On emploie la forme finale du modèle pour simuler les prix concurrents sur le marché canadien.     

Agricultural Trade among NAFTA Countries: A Case Study of U.S. Meat Exports

The U.S. NAFTA partners are important markets for U.S. meat exports. A source-differentiated almost ideal demand system is used in this study to estimate meat demand in Canada and Mexico. Empirical results suggest that while a U.S. price increase in the Canadian market is expected to increase U.S. sales revenues; it would decrease sales revenues in the Mexican market. Furthermore, an increase in meat expenditures in Canada and Mexico is expected to increase the demand for U.S. meats, while the bovine spongiform encephalopathy outbreaks have had a negative effect on U.S. and Canadian beef market shares. Finally, a decomposition of the causes of changes in demand for U.S. meats over time is performed.     

The Arctic as a food producing region: Consumer perceptions and market segments

The Canadian Arctic is a unique food producing region. Much of the food produced in the Canadian Arctic has a strong tie with Indigenous cultures and communities, is produced or harvested in a pristine environment, and features species not commonly consumed in other parts of Canada. Building upon previous work and using data from a survey of Canadian consumers featuring a discrete choice experiment positioned around a seafood purchasing decision (Arctic Char), we use a latent class model to examine heterogeneity in consumer responses to Arctic food. We identify three groups (classes) of consumers who differ in the relative importance placed on geographic origin, Indigenous origin, wild harvested (vs. farmed), and certification for sustainability and authenticity. A class membership model explores the sociodemographic and psychographic characteristics differentiating consumers across these three groups, including food neophobia and consumers’ prior perceptions of the Arctic as a food producing region with respect to quality expectations, environmental and social impacts, Indigenous cultural origins, health, moral and price concerns. Our analysis sheds light onto Indigenous cultural origin as a novel type of credence attribute. We discuss implications for the Arctic food sector and for regional certification initiatives.     

Pricing to Market Behavior by Canadian and U.S. Agri-food Exporters: Evidence from Wheat, Pulse and Apples

A fixed-effects model to control for time variation in marginal costs is employed to pinpoint evidence of price discriminatory behavior of Canadian and U.S. exporters of agri-food products. We test for evidence of pricing to market behavior and whether price discrimination or commodity/country characteristics may provide a plausible explanation. A distinguishing feature of our approach is to examine the time-series properties of the data by the conventional augmented Dickey-Fuller and recently developed panel unit root test. The panel data set employed in this paper consists of annual exchange rates and export prices for three agri-food products (wheat, pulse and apples) exported by Canada and the U.S. in foreign markets during 1980–98. Our fixed-effects model suggests that U.S. exporters are sensitive to exchange rate changes, while Canadian exporters in most cases raised price markups in response to a depreciated currency in overseas markets. The results highlight the differences in pricing policy that both countries employ to merchandise agri-food products in export markets.     

The effect of the Canada–China canola trade dispute on canola prices

In March 2019, China revoked the canola export licenses of two major Canadian exporters. We estimate the impact of these restrictions on Canadian canola prices. Using a vector error correction model to generate counterfactual prices, we estimate that between March 2019 and February 2020 canola prices were 3.6% lower than would have been expected in the absence of the import restrictions. We discuss the implications of our finding for both the ongoing negotiations between Canada and China and producer support in Canada.     

Structural Breaks,the Export Enhancement Program and the Relationship between Canadian and US Hard Wheat Prices

This paper examines the long‐term relationship between the export prices of Canadian and US hard wheat and the effects of the US Export Enhancement Program (EEP). Using monthly prices for 1974–2001, we adopt the cointegration procedure of Johansen et al. (2000) which permits structural breaks. Results show that a long‐term relationship exists, and there are two breaks that coincide with the EEP. The first break is in late 1985 when the long‐term US/Canadian price ratio fell by 5.5%, while the second is in early 1995 when it increased by 9.2%. Weak exogeneity tests imply that Canada is the price leader, and impulse responses show that long‐term equilibrium is restored within five months following a shock to either price.     

NEGATIVE SUPPLY RESPONSE AND THE ROLE OF PRICE EXPECTATIONS IN A TWO-PERIOD MODEL OF CATTLE PRODUCTION

This paper incorporates a representation of producers' price expectations (ARIMA) in a two-period production process to characterise short-run cattle supply. The model provides a framework for examining the role of biological factors and changing expectations of future cattle prices in generating a negative short-run supply response. The biological link between cattle generations requires the farmer to make a decision between production today and production tomorrow. This decision is based on a trade-off between the possibilities of increasing current profit levels by increasing current output weighted against the possibilities of increased future profit by maintaining animals in inventory under the expectation of future price increases. Application of the model to Canadian data for the period 1978-81 shows that the necessary condition for a negative supply response exists, but that the total supply elasticity remains positive.     

Not seeing the carbon for the trees? Why area-based targets for establishing new woodlands can limit or underplay their climate change mitigation benefits

Area-based targets for afforestation are a frequent and prominent component of policy discourses on forestry, land use and climate change emissions abatement. Such targets imply an expected contribution of afforestation to the net reduction of greenhouse gas emissions, yet the nature of afforestation undertaken and its geographical distribution means that there is considerable uncertainty over the eventual emission reductions outcomes. This uncertainty is reduced if the net carbon balance is calculated for all potential afforestation sites, considering climate, soil characteristics and the possible types of afforestation (species and management regimes). To quantify the range of possible emissions outcomes for area-based afforestation targets, a new spatial analysis method was implemented. This improved the integration of spatial data on antecedent land use with mapped outputs from forest models defining the suitability and productivity of eleven forestry management alternatives. This above ground carbon data was then integrated with outputs from the ECOSSE (Estimation of Carbon in Organic Soils – Sequestration and Emissions) model which simulates the soil carbon dynamics. The maps and other model output visualisations combining above and below ground carbon highlight where net carbon surpluses and deficits are likely to occur, how long they persist after afforestation and their relationships with antecedent land use, soils, weather conditions and afforestation management strategies. Using more productive land classes delivers more net sequestration per hectare and could mean greater carbon storage than anticipated by emissions reduction plans. Extensive establishment of lower yielding trees on low-quality ground, with organo-mineral soils could, though, result in net emissions that persist for decades. From the spatial analysis, the range of possible outcomes for any target area of planting is substantial, meaning that outcomes are highly sensitive to policy and implementation decisions on the mix of forestry systems preferred and to spatial targeting or exclusions (both at regional and local scales). The paper highlights the importance of retaining the existing presumption against planting of deep peat areas, but also that additional incentives or constraints may be needed to achieve the aggregate rates of emission mitigation implied by policy commitments. Supplementary carbon storage tonnage targets for new forestry would introduce a floor for carbon sequestration outcomes, but would still allow for flexibility in achieving an appropriate balance in the trade-offs between carbon sequestration and the many other objectives that new woodlands are expected to deliver.     

中加菜籽油期货市场波动溢出实证研究

利用误差修正模型、BEKK-GARCH模型和格兰杰因果关系实证研究了加拿大和中国菜籽油期货市场之间的信息传导、波动溢出和价格引导关系。实证结果显示：这两个市场之间存在一定的信息传导关系;加拿大菜籽油期货市场对中国菜籽油期货市场存在显著的波动溢出效应,而中国菜籽油期货市场对加拿大菜籽油期货市场的波动溢出不显著;短期内加拿大菜籽油期货市场对中国菜籽油期货市场的价格引导作用更强些,这与加拿大菜籽油期货市场是全球菜籽油定价中心的实际相吻合,而中国菜籽油期货市场的竞争力有待进一步提升。     

Abstracts of Second- and Third-Place Undergraduate Papers

Bulls account for half of the genetic input when making improvements in cattle herds. Changing bulls is less costly than changing cows; therefore it is often the case bulls account for more rapid improvements in heritable traits. One of the problems that breeders who supply bulls face is that the attributes of bulls come bundled together so that it is difficult to determine what the value of improvements in a bull might be worth. This research estimates what values beef producers implicitly place on particular characteristics when deciding which bull will best fit the needs of their farm. A hedonic pricing model was estimated using ordinary least squares on actual transaction data and reveals the value buyers of bulls implicitly place on specific traits. For example, a ribeye area of 12.8 in² at the mean sale price reveals a buyer would be willing to pay an additional $80.39 for a bull with an additional square inch. Likewise, a bull with a 1242 lb. 365-day weight at the mean sale price reveals a buyer would be willing to pay an additional $1.83 for an additional pound. Therefore, this research reveals an incentive for producers of bulls to focus on improving the genetic make-up of their bulls they offer for sale.     

The potential and cost of increasing forest carbon sequestration in Sweden

This paper examines the potential and the cost of promoting forest carbon sequestration through a tax/subsidy to land owners for reducing/increasing carbon storage in their forests. We use a partial equilibrium model based on intertemporal optimization to estimate the impacts of carbon price (the tax/subsidy rate) on timber harvest volume and price in different time periods and on the change of forest carbon stock over time. The results show that a higher carbon price would lead to higher forest carbon stocks. The tax/subsidy induced annual net carbon sequestration is declining over time. The net carbon sequestration during 2015–2050 would increase by 30.2 to 218.3 million tonnes of CO₂, when carbon price increases from 170 SEK to 1428 SEK per tonne of CO₂. The associated cost, in terms of reduced total benefits of timber and other non-timber goods, ranges from 80 SEK to 105.8 SEK per tonne of CO₂. The change in carbon sequestration (as compared with the baseline case) beyond 2050 is small when carbon price is 680 SEK per tonne of CO₂ or lower. With a carbon price of 1428 SEK per tonne of CO₂, carbon sequestration will increase by 70 million tonnes of CO₂ from the baseline level during 2050-2070, and by 64 million tonnes during 2070–2170.     

The Potential for Increased Trade in Milk and Dairy Products between Canada and the United States under Trade Liberalization

Controversy surrounds the effect of free trade in milk and dairy products between Canada and the United States. A static, nonspatial, synthetic, partial equilibrium model is used to explore this issue. The results show that under any reasonable set of parameter estimates, net trade between Canada and the United States would be small, or zero. Free trade would be accompanied by large welfare losses for the current owners of Canadian milk production quota, but new entrants to the industry would earn more producer surplus under free trade than if they paid the full rental value for production quota under the current supply management policy.     

个私造林的思考

在林业行业中,营林是基础,是林业经济发展腾飞的首要前提,是治危兴林的关键;营林经营单位是林业系统重要的经济细胞,其兴衰成败直接关系到林业的发展和林业在国民经济中的作用和地位。鉴于传统的以集体造林为主的营林组织方式存在着许多弊端,本文在概述个私造林国内外历史发展和个私造林主要成效的基础上,分析了个私造林存在的问题,并相应提出个私造林的发展对策及其建议。