Rice productivity in Bangladesh: What are the benefits of irrigation?

Green Revolution technologies transformed Bangladesh’s agricultural system through the introduction of high-yielding rice and wheat varieties, chemical fertilizers and pesticides, and the expansion of tubewell-irrigated area, enabling crop production during the dry season. However, serious challenges continue to plague the agriculture sector, including scarcity of land due to high population density, unbalanced use of fertilizers and pesticides, and great variation in water supply across seasons – from drought to stagnant flood conditions. Further expansion of irrigated area – including through the continued development and improvement of surface water systems – is being eyed by Bangladesh’s Ministry of Agriculture to address many of the remaining challenges facing the country. However, such expansion is not without risks or consequences, and a careful analysis of who benefits from irrigation, and how, must guide development priorities.We examine plot-level data for rice production during Bangladesh’s three rice seasons – aus, boro, and aman – across a nationally-representative household survey in Bangladesh. While rainfall is the most important determinant of rice yield during aus and chemical inputs are most important during aman, access to irrigation has the greatest influence on boro rice yield during the dry season, particularly for the coastal south. The government of Bangladesh is planning massive investments in the southern region for the improved provision of surface water irrigation. The expected decline in groundwater, coupled with our econometric findings, suggests that expanding boro production in the south may not be a good strategy to promote, for the region. Whether brackish shrimp aquaculture can provide an equitable and sustainable livelihood alternative should continue to be a focus of research.     

Crisis? What Crisis? The Normality of the Current Food Crisis

The 2005–8 food crisis was a shock to political elites, but in some respects the situation was normal. Food policies are failing to respond adequately to the squeeze on land, people, health and environment. Strong evidence of systems failure and stress, termed here New Fundamentals, ought to reframe twenty‐first century food politics and effort. Yet so far, international discourse is too often narrow and technical. The paper suggests that 2005–8 reinforced how the dominant twentieth century productionist policy paradigm is running out of steam. This assumed that producing more food would resolve social problems. Yet distortions in markets, access and culture remain. At national and international levels of governance, despite realization of the enormity of the challenge ahead, there is still a belief in slow incremental change.     

Introduction to the Special Feature: Will the BRIC Decade Continue? The Role of Rural Areas and Agriculture

This article provides an introduction to the special feature on agriculture‐related issues in the emerging economies of Brazil, Russia, India and China (BRIC) contained in this issue of Journal of Agricultural Economics. The special feature is motivated by the increased interest which these countries have received since the turn of the millennium and by the significance of agriculture in their development. It considers economic and social development in BRICs, their integration in world agricultural trade as well as environmental concerns. This article presents key figures on economic, social and agricultural features in BRICs and compares them across countries. A synthesis of the articles included in the special feature is provided by highlighting the selection of topics likely to be crucial for further development across BRICs.     

What is the Appropriate Counterfactual When Estimating Effects of Multilateral Trade Policy Reform?

Multilateral trade reforms, such as may eventually emerge from the WTO's Doha Development Agenda (DDA), tend to be phased in over a decade or so after agreement is reached. Given the DDA's slow progress, that implementation may not be completed before the end of the next decade. Ex‐ante analysis of the DDA's possible effects thus requires first modelling the world economy to 2030 and, in that process, projecting what trade‐related policies might be by then without a DDA. Typically, modellers assume the counterfactual policy regime to be a ‘business‐as‐usual’ projection assuming the status quo. Yet we know developing country governments tend to switch from taxing to assisting farmers in the course of economic development. This paper shows the difference made by including political economy‐determined agricultural protection growth endogenously in the baseline projection. We reveal that difference by projecting the world economy to 2030 using the Global Trade Analysis Project (GTAP) model with those two alternative policy regimes and then simulating a move to global free trade (the maximum benefit from a multilateral trade reform) in each of those two cases. The welfare effects of removing the counterfactual price distortions in 2030 are shown to be much larger in the case where agricultural protection grows endogenously than in the case assuming no policy changes over the projection period. This suggests the traditional way of estimating effects of a multilateral agricultural trade agreement may considerably understate the potential welfare gains.     

The returns to promotion of healthy choices in Tasmania: are you in the dark about the power of mushrooms?

The Australian Mushroom Growers Association (AMGA) has recently developed a revised marketing strategy to promote mushrooms using messages based on scientific findings about the nutrition and health consequences of regularly incorporating mushrooms into meals. This article evaluates impacts based on a test‐market experiment in Tasmania. We use a difference‐in‐differences econometric methodology to quantify the programme‐induced shifts in demand, and we use the resulting estimates in a supply and demand modelling framework to quantify the effects of promotion‐induced demand shifts on prices, quantities, and measures of economic well‐being. We estimate a conservative benefit–cost ratio for Tasmanian producers of 7.6:1 if they were to bear the entire cost and 11.4:1 if the programme were financed by a levy on production (or spawn). The aggregate benefit–cost ratio, including benefits to consumers is also 11.4:1.     

Multidimensional poverty in Afghanistan: who are the poorest of the poor?

Taking a capability approach perspective, our paper aims at advancing our understanding of poverty in Afghanistan, and at identifying the most deprived, including persons with disabilities, in order to address the first Sustainable Development Goal to eradicate poverty in all its forms. We used data from a national survey carried out in Afghanistan in 2005. We calculated one index using two weights structures, the adjusted headcount ratio, part of the multidimensional poverty measures. Following a participatory process, we identified and validated 13 indicators clustered in seven dimensions of poverty, including three usually neglected dimensions. Findings suggest that exploring various domains of deprivation would better inform poverty eradication policies than an approach focused only on income. Our results also demonstrate that nearly all Afghan adults are deprived in at least one dimension and those residing in rural areas, from minority ethnic groups, women, elderly people and persons disabled at birth or of an unknown cause are the poorest of the poor. Efforts to improve well-being must acknowledge these inequalities so that public policies in Afghanistan aiming at alleviating poverty take these disparities into account, when facing a reduction in available resources.     

The Economic Impacts of Climate Change on Canadian Agriculture and the World: How Big are the Impacts Really?

A computable general equilibrium model was used to assess the impacts of global climate change on Canadian Agriculture. The assumption of ceteris paribus was relaxed. The results indicated that many supply and demand factors have potentially larger impacts on the Canadian and world economies over the next 5 decades than climate change. The distribution of regional impacts varied substantially. Such information is valuable for the agricultural sector and policymakers trying to allocate limited resources .     

A model of the U.S. food system: What are the determinants of the state vulnerabilities to production shocks and supply chain disruptions?

We adapt a Ricardian general equilibrium model to the setting of U.S. domestic agri-food trade to assess states’ vulnerability to adverse production shocks and supply chain disruptions. To this end, we analyze how domestic crop supply chains depend on fundamental state-level comparative advantages—which reflect underlying differences in states’ cost-adjusted productivity levels—and thereby illustrate the capacity of states to adapt to and mitigate the impacts of such disruptions to the U.S. agricultural sector. Based on the theoretical framework and our estimates of the model's structural parameters obtained using data on U.S. production, consumption, and domestic trade in crops, we undertake simulations to characterize the welfare implications of counterfactual scenarios depicting disruptions to (1) states’ agricultural productive capacity, and (2) interstate supply linkages. Our results emphasize that the distributional impacts of domestic supply chain disruptions hinge on individual states’ agricultural productive capacities, and that the ability of states to mitigate the impacts of adverse production shocks through trade relies on the degree to which states are able to substitute local production shortfalls by sourcing crops from other states.     

The New Tomato Suspension Agreement: What Are the Implications for Trade Flows?

This paper examines the implications of the new tomato suspension agreement (signed on March 4, 2013, by the U.S. government and Mexican tomato producers) for trade in fresh tomatoes and processed tomato products. The empirical analysis is performed through a gravity model that accounts for vertical linkages between primary and processed goods. The estimated gravity parameters are used to implement suspension agreement scenarios. The results show that the new suspension agreement leads to considerable decreases in Mexico's exports of fresh tomatoes to the United States. These decreases are accompanied with various trade diversion and deflection effects. There are increases in Mexico's exports of processed tomato products to the United States and other countries, and in Mexico's exports of fresh tomatoes to non‐U.S. destinations. These increases do not amount, however, to considerable compensations of the decreases in Mexico's fresh tomato exports to the United States. The results also suggest that the initial 1996‐based suspension agreement has significantly smaller impacts on trade flows over the period that preceded the implementation of the new suspension agreement.     

Determination of the international maize price: What is the growing role of Brazil and Ukraine?

This paper examines the relationships among maize prices for four countries to determine if newly emerging exporters, Brazil and Ukraine, influence the international price of maize. Our work focuses on each market's participation in the price discovery process rather than trying to determine a price leader. We find that the United States plays the largest role in price discovery, followed by Argentina, Brazil, and Ukraine. We also search for export thresholds and find that Ukraine's contribution to price discovery rises slightly when an export threshold of 2.3 million tons is reached. No export thresholds were found for Brazil. Export thresholds for Argentina were found but only have a minor impact on price relationships. We also found that price relationships vary considerably across seasons of the year.     

Smallholder Farmers and Collective Action: What Determines the Intensity of Participation?

Collective action through farmer groups can be an important strategy for smallholders to remain competitive in rapidly changing markets. Previous research has analysed determinants of farmer participation in groups, equating participation with group membership. However, within groups the commitment of members can vary, as marginal benefits and costs are not the same for all individuals, and opportunities to free‐ride exist. Low participation in collective activities may reduce the ability of groups to provide useful services to its members. This article investigates determinants of member participation intensity, using the example of farmer groups in Kenya. The role of individual and group characteristics is analysed with survey data and regression models. Previous benefits that members received through the group positively influence their intensity of participation in group meetings and collective marketing, suggesting that reciprocity motives play a role. Low participation can mostly be attributed to structural and institutional conditions, such as group size and the timing of payments for collective product sales. More diversified farmers are less likely to sell collectively when group marketing activities only concentrate on one particular commodity. Since smallholders are often highly diversified, the focus of farmer groups should also be broadened. Further policy implications are discussed.     

Privatisation,empowerment and accountability: What are the policy implications for establishing effective farmer organisations?

Weak institutional development and information flows have constrained the extent to which the smallholder farming sector in developing countries can significantly drive growth and poverty reduction. This is despite widely implemented economic liberalisation policies focussing on market efficiency. Farmer organisations are viewed as a potential means of addressing public and private institutional failure but this has frequently been limited by inequalities in access to power and information. This article investigates two issues that have received little research attention to date: what role downward accountability plays in enabling farmer organisations to improve services and markets, and what influences the extent to which downward accountability is achieved. Kenya Tea Development Agency (KTDA), one of the largest farmer organisations in the world (>400,000 farmers) is examined alongside wider literature. Mixed methods were used including key informant interviews, and eight months of participant observation followed by a questionnaire survey. The article concludes that without effective downward accountability farmer organisations can become characterised by institutions and mechanisms that favour elites, restricted weak coordination and regulation, and manipulated information flows. This in turn reduces individuals’ incentives to invest. If farmer organisations are to realise their potential as a means of enabling the smallholder sector to significantly contribute to economic growth and poverty reduction, policy and research needs to address key factors which influence accountability including: how to ensure initial processes in formation of farmer organisations establish appropriate structures and rules; strong state regulation to enhance corporate accountability; transparent information provision regarding actions of farmer organisation leaders; and the role independent non-government organisations can play. Consequently attention needs to focus on developing means of legitimising rights, building poor people's capacity to challenge exclusion, and moving from rights to obligations regarding information provision.     

What Does Granger Causality Prove? A Critical Examination of the Interpretation of Granger Causality Results on Price Effects of Index Trading in Agricultural Commodity Markets

The influence of index trading on price levels, returns, spreads or volatility in agricultural commodity markets is frequently investigated with bivariate Granger Causality (GC) tests. A joint review of existing empirical studies reveals scant and inconsistent evidence of GC from index activity to prices. Some findings of reverse GC from prices to index activity are reported. The literature offers three different interpretations of GC test results: (i) as prima facie causal evidence; (ii) as a test for informational efficiency of the markets; or (iii) as a test for the ability of one variable to improve the forecast of another variable. A critical examination of these interpretations against an extended theoretical background reveals that none allows direct inferences about the existence or absence of an influence from index trading activity on the price mechanism in the market. This severely limits the usefulness of a stand‐alone application of GC tests.     

Presidential Address: The Visible or Invisible Hand? The Balance Between Markets and Regulation in Agricultural Policy

The recent crisis in global financial markets has brought into question reliance on markets to determine the conduct of economic affairs and generated pressure for greater regulation and government control. Neither a neoliberal nor a neoregulatory approach is likely to be able to solve pressing problems affecting agriculture and natural resources, such as a deterioration in environmental quality and the challenge of climate change. To find solutions we need to employ a more realistic behavioural model than that typically used in economic analysis, and to recognise the key role played by values in individual and collective decision making. A more devolved approach to policy formation based on collective action seems to offer the greatest chance of success. More effort needs to be directed to understanding the drivers and processes of collective decision making, and how it can be harnessed to address pressing policy issues.     

The application of the Habitats Directive in the UK: Compliance or gold plating?

The implementation of the Birds and Habitats Directives in the UK has caused considerable unease within some parts of industry. Ports in particular have voiced concerns and have argued that the UK Government's interpretation of the Directives is more comprehensive than strictly necessary, likening it to ‘gold plating’. They have argued that this has placed the UK at a disadvantage to other European competitors. This paper explores these contentions and examines case histories to establish the veracity of the arguments.     

Deregulation of the Australian Wheat Export Market: What Happened to Wheat Prices?

ABSTRACT

This report investigates whether deregulation of the Australian wheat export market induced a structural change in the price data generation process. We analyze the unit root properties of Western Australian wheat price series by testing for the possibility of single and double structural breaks. Daily spot prices for the period of May 20, 2003, to September 14, 2010 are used. We find the wheat price series has a unit root with two structural breaks but neither breaks coincides with the time when the Wheat Export Marketing Act 2008 came into effect on July 1, 2008. The implication of our results is that deregulation was not the main cause of structural breaks in the price series in the sample period.     

Situating community forestry enterprises within New Institutional Economic theory: What are the implications for their organization?

Community forestry enterprises (CFEs) have gained considerable traction with rural development and forestry practitioners as models for community development, poverty alleviation, and conservation. This paper uses New Institutional Economic theory to identify the key organizational features and potential inherent weaknesses of CFEs. NIE theory focuses on arguments of economic efficiency, specifically transaction cost reductions that serve as incentives for collective action by groups of owners. Examples are given to show how the organization of CFEs reduced transaction costs stemming from interactions with industrial loggers and service providers. However, the creation of these community enterprises goes beyond simple transaction cost reductions and economic justifications. Additional unquantifiable benefits, such as self-determination, control over resources that communities have historically used, application of acquired skills, political representation, and application of acquired skills to name a few, are also secured through community ownership. These benefits however do not come without a cost. As enterprises where ownership rights are incomplete or ill-defined and which do not operate with the incentives of investor-owned firms, CFEs have little to no initial capital pool and experience considerable investment limitations due to limited wealth, horizon problems, and unsolved issues with moral hazard vis-à-vis banks. CFEs also face important management and collective decision-making challenges. In spite of their institutional weaknesses, it is apparent that many societies have decided that the benefits of community ownership far outweigh their ownership costs. State intervention and policy have played an important role in building the necessary supportive framework for the development of these enterprises. NIE as a dominant model for understanding alternative entrepreneurial forms was useful for identifying some important aspects of CFEs that, in a profit-driven economy, can constitute weaknesses that place them at a disadvantage with investor-owned firms. This analysis informs where policy should be targeted if CFEs are to be supported and fostered.     

Carbon accounting tools: are they fit for purpose in the context of arable cropping?

The agricultural sector contributes 9% towards total UK greenhouse gas emissions and so may offer significant potential as a sector to help meet national and international emission reduction targets. In order to help farmers manage their emissions and to encourage more sustainable farming, several carbon accounting tools are now available. This article describes a short study that selected five suitable tools and compared their performance on nine European arable farms, concentrating on the crop production components, to determine how useful they are for assisting in the development of site-specific mitigation strategies and how well they would perform within farm assurance or benchmarking schemes. The results were mixed, with some tools better designed for identifying mitigation opportunities than others. The results also showed that, quantitatively, the results are highly variable between tools and depended on the selected functional unit, this being highly important if the wider aspects of sustainability such as food security are to be considered. However, there is statistical consistency across the tools regarding the ranking order of the farms in terms of their emissions.     

Gender and inorganic nitrogen: what are the implications of moving towards a more balanced use of nitrogen fertilizer in the tropics?

For agriculture to play a role in climate change mitigation strategies to reduce emissions from inorganic nitrogen (N) fertilizer through a more balanced and efficient use are necessary. Such strategies should align with the overarching principle of sustainable intensification and will need to consider the economic, environmental and social trade-offs of reduced fertilizer-related emissions. However, the gender equity dimensions of such strategies are rarely considered. The case studies cited in this paper, from India, Lake Victoria in East Africa and more broadly from sub-Saharan Africa (SSA), show that the negative externalities of imbalanced inorganic N use in high- and low-use scenarios impact more strongly on women and children. We examine, through a literature review of recent work in SSA, the relative jointness of intra-household bargaining processes in low N use scenarios to assess the degree to which they impact upon N use. We suggest that gender-equitable strategies for achieving more balanced use of N will increase the likelihood of attaining macro-level reductions in GHG emissions provided that they secure equity in intra-household decision-making and address food security. Gender-equitable N use efficiency strategies will help to integrate and assure gender and social equity co-benefits at local scales.