Symposium on Infant Industries: A Comment

This paper uses the fiscal response framework to investigate the extent to which different categories of foreign aid flows, namely project aid, programme aid, technical assistance and food aid, displace public savings and affect the recipient country's dependence on aid, using time series data for Côte d'Ivoire for the period 1975–99.The results indicate that, in general, project aid flows tend to reduce public savings and worsen Côte d'Ivoire's dependence on aid more than the other categories of aid flows. This finding therefore suggests that accounting for aid heterogeneity in aid studies as well as aid policies design and implementation could be crucial in improving aid effectiveness to achieve the Millennium Development Goals.     

FINANCIAL STRESS AND CONSUMPTION EXPECTATIONS AMONG FARM HOUSEHOLDS: NEW ZEALAND'S EXPERIENCE WITH ECONOMIC LIBERALISATION

A review of New Zealand's experience with assistance to agriculture through the 1960s and 1970s and the subsequent deregulation of the sector in the mid-1980s provides background to this study. Data for sheep and beef farmers are used to elaborate the variety of financial changes in the boom and bust cycles that followed the policy changes. Changes in farm business stress are examined using some conventional financial ratios. New measures which partition household expenditure between consumption and investment are then developed. These better explain the stress experienced among farm households as a consequence of the readjustment process and provide insight to the impact of the legacy of debt, encouraged by government intervention, on farmers' current and expected household consumption over recent years. New Zealand's experience reveals that farm household consumption stress has been unevenly distributed. This suggests that policy concern, following the removal of government assistance to agriculture, should focus principally on the mitigation of the household distress caused by ongoing farm debt commitments.     

How Do Health and Social Insurance Programmes Affect the Land and Labour Allocations of Farm Households? Evidence from Taiwan

To protect farmers from health care costs and risks to livelihood, most countries have developed special health and social insurance programmes specifically for farmers. While numerous studies have examined the determinants of participation in these programmes, little is known about how they influence famers' land and labour allocations. Without government‐sponsored health and social insurance, farmers may seek off‐farm employment in order to obtain similar benefits. Conditioning eligibility for social insurance on minimum land holdings and on‐farm work days can lead to delayed retirement and other forms of job lock. We investigate these issues using a unique dataset of 703,287 farms in Taiwan. After controlling for non‐random participation in Taiwan's social insurance programme, we find that the programme increases (decreases) on (off) farm labour supply, and decreases the amount of set‐aside land. This suggests that payments from social insurance substitute for those issued through land set‐aside programmes to some extent, and that failing to account for this substitution increases the cost of achieving both programmes' objectives.     

The linkage between the U.S. ethanol market and developing countries’ maize prices: a panel SVAR analysis

The major expansion of U.S. ethanol production raises concerns about the potential detrimental impacts on developing countries’ agricultural prices, farm income, and food security. To assess the sensitivity of maize prices to ethanol production, this study explores the linkage between the U.S. ethanol market and developing countries’ maize prices. The econometric approach, based on a panel structural vector autoregression model, captures market interdependencies and the likelihood that developing countries’ responses are both heterogeneous and dynamic. The results indicate that the U.S. ethanol market's impacts on maize prices in developing countries are heterogeneous and that coastal countries are more susceptible to U.S. economic shocks. The estimates also suggest that countries more dependent on food imports and/or receiving U.S. food aid are at a higher risk of being affected by such shocks. Overall, the results indicate that those countries with the greatest sensitivity and exposure to global agricultural commodity markets could benefit from domestic policies and international assistance, which reduce their exposure to impacts from the U.S. maize market.     

AGGREGATION OF MICRO-FUNCTIONS TO OBTAIN A WHOLE-FARM PRODUCTION FUNCTION*

In this paper, a re-assessment of the aggregation problem in farm production functions is attempted. Aggregation starts from measurable farm management entities such as the milking cow, breeding ewe etc., and appropriate whole farm production functions are derived that are consistent with these biological units of farming, or as they will be called, the micro-functions of agriculture. The aggregate function, as derived, is based on the geometric means of micro outputs and inputs and could appropriately be said to 'represent' all the micro-functions. It is thus called, later in the paper, the representative production function for the farm firm.     

Revisiting revenue contingent loans for drought relief: government as risk manager

It is clear that Australian governments will provide assistance to farmers in drought, which is a rational political judgement supported by recent survey work suggesting strongly the pervasive existence among voters of agrarian sentiment. In this context, a reasonable question relates to what forms of assistance are most equitable for taxpayers and also have desirable properties for farm businesses. In this study it is argued that traditional and current approaches to drought assistance are not equitable and do not provide sufficient protection to farmers from default and thus insolvency risk. But there is an instrument available to government which can be designed to minimise taxpayer subsidies while at the same time delivering insurance for farmers against default: a Revenue Contingent Loan (RCL). Following the principles inherent in the Higher Education Contribution Scheme, a RCL is financial assistance repaid contingent on a farm's capacity to pay, meaning that loan defaults can be avoided. We model the revenue streams associated with a hypothetical loan of this type and illustrate the advantages for a farm business of these kinds of debt.     

Market‐orientated Positioning of On‐farm Processed Foods as a Condition for Successful Farm Diversification

Farm diversification is stimulated within the reform of the common agricultural policy. On‐farm processing and direct marketing are options, but farmers often lack a marketoriented approach. This paper illustrates the problem by presenting a consumer survey regarding on‐farm processed yoghurt. Conjoint analysis is used to define the most preferred yoghurt in different market segments. Results of the price sensitivity meter are similar to the conjoint analysis. Farmers' price setting is not always adequate, which means that opportunities and additional income are lost. Providing the necessary assistance in collecting market information and commercial training is essential in obtaining sustainable benefits from on‐farm processing and direct marketing.     

Improving rural livelihoods through the conservation and use of underutilized species: evidence from a community research project in Yemen

The aim of this paper is to analyse the impact of a set of interventions related to conservation and use of neglected and underutilized species (NUS) on people's livelihoods. Specifically, a simultaneous three-equation model of households' participation on underutilized crops conservation and income generation activities is applied to evaluate the outcome of a pilot research project implemented by Bioversity International in Yemen between 2002 and 2005. Results generated show a relation between project participation and the perceived yield increase demonstrating the importance for farmers to actively participate in the project's activities and subsequently apply agronomic practices learnt to improve their livelihood. The generated benefits incentivized farmers to continue to apply the interventions beyond the lifetime of the project ensuring thus a sustainable process in which exogenous interventions, once adopted by farmers become integrant part of farmer's agronomic practices.     

Managerial ability — a review of its basis and potential improvement using psychological concepts

Achieving an appropriate resource allocation structure usually revolves around the farm manager. His or her ability is crucial to success. Yet, most farmers learn by experience and/or through various courses that concentrate on technical, production economic and related aspects. Putting more effort into understanding the components of managerial ability and how a managers’ ability to perform well in each component might be improved is well overdue. As psychology is the study of people and their actions it is the obvious discipline to turn to for assistance. This paper contains a review of the psychology of decision making from a farm management perspective, outlines what psychology offers for changing a person's attributes, and considers the structure of a research programme aimed at developing methods for improving individual's managerial ability.     

Canada's Contribution to Agricultural Foreign Aid1

Taking into account both bilateral and multilateral programs, Canada's contribution to external aid, which in 1967–68 amounted to 0.65 per cent of our national income, now compares favorably with most other donor countries and by the early 1970's is expected to reach the target of one per cent recommended by the United Nations Conference on Trade and Development. Initially concentrating on the Colombo Plan countries, in recent years Canada's bilateral aid program has been broadened to include the Commonwealth Caribbean countries and the Commonwealth and French-speaking African countries. Until recently Canada's principal approach to assisting developing countries to increase their food supplies has been indirect, through capital projects designed to develop the general economic infrastructure, as well as through food aid. Food aid, which has been devoted mainly to meeting emergency food shortages, has been the largest single item in the Canadian aid program. Recognition of the urgency of developing indigenous agricultural production, as an essential means of meeting the emerging food crisis and of stimulating overall economic growth, is being reflected to an increasing degree in Canada's current aid program by a greater emphasis on carefully planned integrated agricultural programs, involving both capital and technical assistance inputs. L'APPORT DU CANADA À L'AIDE AGRICOLE À l'ÉTRANGER: Si I'on tient compte des programmes bilatéraux et multilatéraux, la part du Canada à l'aide à l'étranger représentait, en 1967–1968, 0.65 p. 100 de notre revenu national, ce qui nous compare honorablement avec la plupart des autres pays donateurs. Vers le début des années 1970, on compte atteindre l'objectif d'un pour cent recommandé par la conférence des Nations Unies sur le commerce et le développement. Le Canada a commencé d'abord par concentrer son assistance sur les pays du Plan Colombo mais plus récemment le programme bilatéral d'assistance du Canada s'est élargi et embrasse les Antilles anglaises, de même que les pays africains du Commonwealth et l'Afrique francophone. Jusqu'à ces derniers temps, l'aide canadienne destinée à augmenter les ressources alimentaires des pays en voie de développement s'est manifestée autant de façon indirecte, par des plans d'aménagement visant à développer l'infrastructure économique générate, que par de l'assistance alimentaire directe. L'aide alimentaire, destinée surtout à pallier les situations urgentes de pénurie, occupe la principale place dans le programme canadien d'aide à l'étranger. On reconnaît aujourd'hui qu'un des moyens essentiels de fairs face à la crise alimentaire imminente et de stimuler la croissance économique globale est d'encourager le plus tôt possible le développement de la production agricole des pays en voie de développement. Cette prise de conscience se traduit de plus en plus, dans les programmes canadiens actuels d'assistance, par l'importance accrue qu'on accorde à la préparation méthodique de plans agricoles intégrés, combinant à la fois l'aide financière et technique.     

Understanding Adoption of Livestock Health Management Practices: The Case of Bovine Leukosis Virus

Herd-level livestock health management decisions have implications for farm profitability and the potential public impact of a livestock disease outbreak. Thus, adoption of health management practices is of interest to government officials concerned with managing the risk of disease outbreak and controlling the spread of infection. This paper uses a fractional logit model to estimate the disease risk reduction for livestock health management practices on farms, and then uses the economic benefits of these risk reductions as explanatory variables in an econometric model of adoption of these practices. We find that the economic damages from disease associated with a particular practice are statistically significant but ultimately of little practical economic importance in adoption decisions. Implications for policy and relation to prior research findings are discussed. Les décisions entourant la gestion sanitaire du troupeau ont des répercussions sur la rentabilité des fermes et sur l'impact qu'une éclosion de maladies animales pourrait avoir sur la population. Par conséquent, l'adoption de pratiques de gestion sanitaire intéresse les représentants du gouvernement soucieux de gérer le risque d'éclosion de maladies et de maîtriser la propagation d'une infection. Dans le présent article, nous avons utilisé un modèle logit fractionnaire pour estimer la diminution du risque de maladies lorsque des pratiques de gestion sanitaire du troupeau sont adoptées à la ferme et nous avons ensuite utilisé les avantages économiques de cette diminution du risque comme variables explicatives dans un modèle économétrique d'adoption de ces pratiques. Les résultats ont montré que les dommages économiques liés aux maladies associées à une pratique en particulier sont statistiquement significatifs, mais qu'ils sont finalement sans importance économique dans les décisions d'adoption. Nous avons examiné les répercussions sur la politique agricole et avons fait le lien avec des résultats de recherche antérieurs.     

Simulating economic values of a genetic improvement program for Australian farmed saltwater crocodiles*

In genetic improvement programs, candidates for breeders are ranked by the profitability of their offspring, expressed as a weighted sum of the genetic gain from selection. In this paper, we estimate the economic values of a genetic improvement program for Australian farmed saltwater crocodiles. A bioeconomic profit function for a representative breeding pair is used to determine the optimal slaughter age following genetic improvement in each selection objective. The results indicate that estimated farm profitability increases by nearly $A111 for a 1‐week reduction in juvenile slaughter age, $A78 for a 1 per cent increase in the proportion of first‐grade skins produced, and $A33 for an increase in the number of viable hatchlings per clutch. The implications of the analysis for the Australian crocodile industry and the limitations of the research are explored.     

基于结构方程模型的集聚农户共生认知及影响因素分析:以重庆市为例

研究目的:探讨对集聚农户共生、集聚区土地利用率提高的影响因素,为提升农户共生的认知水平、优化农户共生关系及促进资源的节约集约利用提供有效路径及理论指导。研究方法:参与式农户调查,结构方程模型。研究结果:(1)户主自身特征、农户家庭特征、集聚共生效益特征及外部环境与政策特征这4类外源潜变量对农户共生认知产生重要影响且影响程度大小不同,其中,集聚共生效益特征的影响最为显著,外部环境与政策特征、户主自身特征和农户家庭特征的影响依次减弱;(2)是否为干部、对原集聚模式的满意度、是否促进农户生产生活条件和政府对集聚区的补贴力度分别对这4类外源潜变量具有较好的解释能力。研究结论:显化农户共生效益、增强"精英"农户及村干部的正向引导、提升农户成员受教育水平、培养农户"共生共荣"理念等是深化农户共生关系,促进和谐乡村人居环境建设的重要路径。     

The Role Of The Agricultural Economist In Foreign Agricultural Assignments1

Rapid expansion of foreign agricultural aid to developing nations has emphasized the important role which agricultural economists can play in this complex field. individually, or as a member of a team, the Agricultural Economist can contribute by applying sound economic principles to policy and project evaluation within the socio-economic and political setting found in the recipient nation. Experience gained in foreign advisory work can also be usefully applied to the career positions occupied in Canada. Therefore, Agricultural Economists are urged to actively participate in Canadian technical aid to developing nations. LE RÔLE DE L'ÉCONOMISTE AGRICOLE EN FUNCTION À L'ÉTRANGER L'extension rapide qu'a prise l'aide agricole aux pays en voie de développement met en relief le rôle que peuvent jouer les économistes agricoles en ce domaine complexe. Seul ou en équipe, l'économiste agricole peut contribuer par l'application des sages principes de l'économie, à l'analyse des politiques et des plans, à la lumière du milieu socio-économique et politique du pays récipiendaire. L'expérience acquise comme conseiller aux affaires extérieures peut toujours venir à point même aux carrières intérieures, c'est pourquoi les économistes agricoles sont instamment priés de participer au programme d'assistance technique du Canada aux nations en voie de développement.     

US farm support under a Biden administration: Plus ça change,plus c'est la même chose?

During the Trump administration, there has been an unprecedented increase in the level of domestic support provided to US agricultural producers. Direct farm supports, including price and income support payments, federal crop insurance, and supplemental assistance to compensate losses due to the trade war with China and the pandemic, have accounted for more than one‐third of net farm income. Those payments have threatened to push the United States over its World Trade Organization (WTO) domestic support obligations and increased its vulnerability to potential dispute settlement challenges in the WTO. The incoming Biden administration will likely bring a new focus to repurpose farm subsidies to provide environmental benefits, such as reduced greenhouse gas emissions, but to achieve those reforms they will need to convince a US Congress that has historically been prone to maintaining the status quo.     

THE VALUE OF FARM ANIMAL WELFARE

This paper explores further some of the ideas put forward by McInerney (1993) in his economic perspective of animal welfare. It uses a simple economic framework to consider citizens' concerns and perceptions about farm animal welfare and the production and consumption of livestock products in society. People's perceptions that certain aspects of livestock production give rise to poor farm animal welfare are a potential source of disutility for them. This disutility may be associated with people's own consumption of livestock products and/or with other people's consumption. The latter is a negative externality of consumption in society, resulting in very real indirect costs associated with livestock production. The paper discusses the need for valuing farm animal welfare, considers techniques for evaluation and highlights some of the policy issues involved.     

Future Changes in British Agriculture: Projecting Divergent Farm Household Behaviour

The recent decline in farm incomes has focused attention on farmers' uneven propensity to adjust and adapt. Changes in farm policies are slowly redirecting the support paid to farmers in Europe, and further reforms are envisaged. This paper argues that farmers in Britain are likely to pursue highly diverse strategies in this changed context, according to their individual circumstances, values and attitudes. These groups (essentially ideal types) are derived both from in‐depth qualitative interviews and from a cluster analysis of variables relating to the farm and to the farm household's socialisation and attitudes. The paper seeks to draw out the implications of divergent farm household behaviour for future structural change, and for agricultural and rural policy. Opportunities are identified for the UK government to implement the EU Rural Development Regulation in ways that would suit the varied circumstances of British farmers in the postproductivist transition.     

Private transaction costs of participation in water quality improvement programs for Australia's Great Barrier Reef: Extent,causes and policy implications

The direct private cost to landholders of participating in programs that result in improved farming activities (IFAs) is generally well understood. However, the private indirect or transaction costs, such as the cost of a landholder's time and the expense to learn about IFAs and apply for assistance to implement these changes on‐farm, are not so well understood. Where these have been studied, they have been shown to be extensive. We assess the extent and causes of private transaction costs incurred by sugarcane growers participating in the Australian Government's Reef Rescue scheme which pays farmers to adopt environmentally beneficial farm management practices. Utilising a mail‐out‐mail‐back survey of 110 growers, we found that the average total transaction cost per farm of participating in the program was AU$8389. The average total transaction costs per farm as a percentage of the average funding provided was 38 per cent. We also assessed which type of improved farming activity (soil, nutrient, pest or water management) generated the greatest transaction costs and how landholder characteristics such as bounded rationality, opportunism and social connection impacted on the extent of transaction costs.     

Tactical responses to seasonal conditions in whole-farm planning in Western Australia

In dryland agricultural systems, efficient farm management requires a degree of flexibility according to variations in climate from year to year. Tactical adjustments to the mix of farm enterprises can capitalize on good growing conditions and minimise losses under poor growing conditions. In this paper, a discrete stochastic programming model of dryland wheat-sheep farms in Western Australia is used to identify optimal tactical adjustments to climate and to calculate the value of these tactical adjustments. The model, MUDAS, includes nine discrete season types with a wide range of options for tactical adjustments in each. In the standard model, optimal tactical responses increase expected net cash surplus by approximately 22% relative to a fixed or inflexible strategy. In most season types, changes to the long term farm strategy are made on less than 10% of the farm area, although in some seasons over 25% of the farm can require adjustments to the enterprise selected. The benefits of flexibility are not evenly distributed across different season types but occur predominantly in the best and worst seasons. The magnitude of benefits is affected differently by different commodity prices. Benefits of flexibility are due to capitalizing on knowledge about the greater volatility of profits from cropping than from livestock production. Deterministic models and even stochastic models which don't include activities for tactical adjustments miss this key feature of the system.     

Public Responses to Agricultural Disasters: Rethinking the Role of Government

We provide a broad overview of the role and history of federal disaster relief in U.S. agriculture. We discuss various economic arguments that may be used as justification for such disaster relief and subsidized insurance programs. In general, we find no persuasive argument that market failure justifies subsidized risk management activities by the government. Important exceptions exist in the case of catastrophic damages to public infrastructure, invasive and communicable disease threats, and the hazards posed by accidental or deliberate contamination of food supplies in that the presence of significant transactions costs may inhibit private market solutions. We also consider a panel VAR analysis of the dynamic interrelationships among market returns and farm program payments conveyed under three different types of programs—disaster assistance, crop insurance, and all other direct payments. An important finding is that disaster and insurance payments appear to imply higher subsequent levels of market income risk in agriculture. This finding is consistent with arguments that subsidized disaster assistance and insurance may lead to greater risk in agriculture. Nous présentons un large aperçu du rôle et de l'historique du programme fédéral d'assistance en cas de catastrophe agricole aux États‐Unis. Nous analysons différents arguments économiques qui peuvent justifier ces programmes d'aide et d'assurance subventionnés. En général, nous ne trouvons aucun argument convaincant comme quoi une défaillance de marché justifie des activités de gestion du risque subventionnées par le gouvernement. Cependant, des exceptions importantes existent pour les cas de dommages catastrophiques à des infrastructures publiques; de menaces de maladies contagieuses et invasives; et de dangers associés à la contamination accidentelle ou délibérée de la chaîne alimentaire, auquel cas les coûts de transaction importants pourraient inhiber les solutions du marché privé. Nous considérons également une analyse panel VAR des relations entre les rendements de marché et les paiements versés en vertu de trois types de programme: assistance en cas de catastrophe, assurance récolte et tout autre type de paiement direct. Nous en arrivons à la conclusion importante que les paiements d'assurance et d'aide aux sinistrés semblent mener à des niveaux de risque relatif au revenu marchand plus élevés dans le secteur de l'agriculture. Ceci concorde avec les arguments voulant que les programmes subventionnés d'assurance et d'assistance en cas de catastrophe mènent à une augmentation des risques dans le secteur de l'agriculture.