Comparative Evaluation of Farm Inputs and Services Networks in New York and Ontario

Use, availability, and satisfaction of 22 farm business services by dairy farm households were compared among four neighboring regions in Ontario and New York to examine the effects of government support policy. The supply management policy applied to milk production in Ontario is associated with different input usage and greater perceived availability of farm inputs and services than more market-oriented policies in New York. Families in both countries tended to be more satisfied with supply and production services and less so with labor and loan services. Since availability of services is correlated with density of production and the level of returns, policy changes that result in fewer producers will ultimately cause satisfaction with farm input services to decline.     

Agricultural Policy in the 21st Century: Economics and Politics

This paper provides a framework for thinking about agricultural policy, why and how it is introduced, and how it changes over time. This framework suggests that agricultural policy will be influenced by both concerns for efficiency and lobbying. While agricultural policy will not always be effective, it will be relatively stable, at least in terms of its broad outlines. Underlying this broad stability, however, will be considerable small‐scale change as program and policy details shift in response to a changing environment. When policy changes in a major way, which it almost always will, the shift will be abrupt—a punctuation. These abrupt changes come as attention is eventually paid to areas and/or issues that are increasingly understood to be not working. While there is considerable room for economic analysis in the policy process, it will not be the main driver; this role belongs to politics—the ability to change the discourse around a policy issue in such a way that different evaluations and interpretations of the policy and its impact are created. Based on the analysis in this paper, it is argued that supply management is more likely to see significant change than business risk management programs, since more attention seems to be currently directed at the former issue. It is also argued that although proponents of local food, organic production, and urban agriculture have had some success at getting attention focused on these issues, this success will not translate into any major policy changes, in part because markets for these products are developing and appear to be working reasonably well.     

Issues Affecting the U.S. Poultry Industry and International Poultry Trade

Abstract

This study was conducted to examine issues and concerns that may affect the future direction of the U.S. poultry industry and international poultry trade. Given the economic contribution of the poultry industry, it is important to have some understanding about the future direction of the industry, both at the national and international levels. To generate the information required, this study surveyed the top poultry producers in the country as well as specialists and experts in the industry. Although both the producers and specialists believe that the industry has a bright future, they also think that the rapid production growth experienced by the poultry industry in the past two decades cannot be sustained. Growth restrictions in the industry will come from a variety of sources such as environmental waste management, food safety, labor shortages, animal welfare, and increased foreign competition.     

The Value of Dairy Quota under a Commercial Export Milk Program

This paper argues that under a commercial export milk program, the market value of quota will be determined by the spread between the domestic market price and the export price, rather than the conventional wisdom that it is determined by the spread between the domestic milk price and the marginal cost of production. Under this new economy, it is argued that ultimately the market price of dairy quota will be priced independently of firm marginal costs, which implies that low-cost (or high-margin) producers will not hold an economic advantage in bidding for quota over higher-cost producers. Regression results are consistent with the hypothesized positive relationship between quota values and the difference between domestic and export milk price. The average export price has generally increased over time and is approximately equal to the marginal cost for an average producer. The results have implications for a World Trade Organization (WTO) challenge. New Zealand and the United States feel the domestic program acts as an export subsidy by cross-subsidizing production of commercial export milk. The results here suggest that the prices for the filled export contracts are approximately the marginal cost of production for the average producer and not lower, as suggested by the challenge. Export contracts were found to have higher price risk than domestically produced milk. The risk is compounded by the short-term nature of most export contracts. The increase in risk for the commercial export milk program (CEM) implies that it is unlikely many farmers will greatly diversify into CEM contracts unless the uncertainty is reduced.     

BRITISH HORTICULTURE AND THE COMMON MARKET

Tariffs and quotas against the Six are not consistent with Britain as a part of the Common Market. Such restrictions have produced the traditional policy for horticulture in Britain. Now their removal is threatened and with it the incomes of our producers. This paper attempts to measure the seriousness of the threat to British growers. Three features are most relevant to this question. Firstly, somewhat less than two-thirds of the producers depend wholly on income from horticultural produce. Secondly, only one-tenth of the producers account for two-thirds of the output. Thirdly, horticultural produce is of distinct types, decorative, dessert, salad, or staple, and the future demand and supply prospects vary accordingly. The E.E.C. is poised to send us more glasshouse vegetables and more apples and pears. Thus the most highly capitalised sectors of horticulture are most vulnerable and those growers with modernised investment will best meet the increased competition. The future will see further adjustment within the industry, but the outcome will mainly depend on the general level of prosperity in Britain.     

Risk Preferences of Dairy and Hog Producer in Quebec

The objective of this study is to investigate the nature of risk preferences of Quebec dairy and hog producers. The direct elicitation of utility method is employed to determine producers'degree of risk aversion. The Delphi process is used to obtain more refined and realistic responses. The results reveal that the risk preferences of the randomly selected Quebec farmers are highly diverse. The percentage of risk-taking farmers ranges from 8% to 23% depending upon the level of investment and the nature of the enterprise. On average, the majority of farmers in both groups are found to be risk averse. Based on the differences between the means as well as distributions, although not significant in all cases, hog producers are found to be consistently more risk averse than dairy producers. Moreover, the gap between the two groups widens as the level of investment increases. The implications of this result are that the stability of farm income due to supply management in dairy sector may facilitate investments of a given risk (for example, adoption of a new technology) more so than it would in the hog sector.     

Soil and cropping system research in semi-arid West Africa as related to the potential for conservation agriculture

Semi-arid West Africa faces challenges to increase sorghum and pearl millet production to meet food needs for a growing human population while increasing soil carbon (C), nutrient levels, and water holding capacity that are documented benefits of conservation agriculture. This review focuses on the wealth of research on cropping systems, tillage, crop residue, nutrient, and weed management as related to conservation agriculture. It also identifies needs for multidisciplinary, integrative research to assist the transition from current production systems to conservation agriculture. Crop residue use as livestock feed, or fuel are major constraints to adoption of conservation agriculture, which could be reduced by wood production in agroforestry systems, alternate energy sources, and increased forage supply. Crop residue and grain yields are related, thus improved crop, soil, water, nutrient, and weed management to increase grain yield would also increase the supply of crop residue with potential for ‘left over’ crop residue being available for soil mulching. Incorporating indigenous shrubs and/or cover crops could also increase crop residue supply. Species diversity can be increased through crop rotation, agroforestry, cover crops, and intercrops. Higher grain and stover yields and increased profit potential for resource-poor farmers in West Africa will be required before wide-scale adoption of conservation agriculture will be possible.     

A Market-Forces Policy for the New Farm Economy?

This paper first discusses the changes that are bringing about the New Farm Economy. A wave of consolidation has shifted agricultural production to larger, lower cost producers in almost all sectors of agriculture. At the same time, supply chains represent a new form of ownership and control that is replacing commodity markets as the preferred way to market farm output. Both consolidation and the development of supply chains offer the possibility of producing a greater variety of safer, cheaper food. The paper argues that farm policy, crafted for the agriculture of the 1930s, is no longer necessary to raise or stabilize farm incomes, and is largely ineffective anyway. Moreover, farm policy impedes the market forces driving innovation and efficiency in the farm economy. Letting market forces guide the evolution of the farm economy, unfettered by outdated government programs and unnecessary farm subsidies, is the best way to harness the benefits of the New Farm Economy. Getting rid of government subsidies and control will lead to dramatically fewer farmers in agriculture: a policy to deal explicitly with those who will leave agriculture is needed. A transition policy is described that focuses on helping reduce the number of farmers by offering a buyout to farm producers which subsidizes their exit from farming and prevents reentry.     

Comparing supply‐side specifications in models of global agriculture and the food system

This article compares the theoretical and functional specification of production in partial equilibrium (PE) and computable general equilibrium (CGE) models of the global agricultural and food system included in the AgMIP model comparison study. The two model families differ in their scope—partial versus economy‐wide—and in how they represent technology and the behavior of supply and demand in markets. The CGE models are “deep” structural models in that they explicitly solve the maximization problem of consumers and producers, assuming utility maximization and profit maximization with production/cost functions that include all factor inputs. The PE models divide into two groups on the supply side: (1) “shallow” structural models, which essentially specify area/yield supply functions with no explicit maximization behavior, and (2) “deep” structural models that provide a detailed activity‐analysis specification of technology and explicit optimizing behavior by producers. While the models vary in their specifications of technology, both within and between the PE and CGE families, we consider two stylized theoretical models to compare the behavior of crop yields and supply functions in CGE models with their behavior in shallow structural PE models. We find that the theoretical responsiveness of supply to changes in prices can be similar, depending on parameter choices that define the behavior of implicit supply functions over the domain of applicability defined by the common scenarios used in the AgMIP comparisons. In practice, however, the applied models are more complex and differ in their empirical sensitivity to variations in specification—comparability of results given parameter choices is an empirical question. To illustrate the issues, sensitivity analysis is done with one global CGE model, MAGNET, to indicate how the results vary with different specification of technical change, and how they compare with the results from PE models.     

Short supply chain participation and market performance for vegetable farmers in China

The fresh food supply chain in China has begun to reduce the number of intermediaries that connect producers and consumers. Using farm‐level data, this paper investigates the impacts of short supply chain participation on vegetable farmers’ market performance, including profits, productivity, production cost, price and price risk. The results show that the participation in a short supply chain is a profit‐maximising strategy and risk management tool for farmers. The increase in profit is attributed to productivity advantages, farm size expansion, and risk reduction rather than because of price premiums or cost savings. A policy implication is that short supply chain promotion has many benefits, but the government should be more concerned about the sustainability of short supply chains.     

How much do farmers value their independence?

A farmer's decision to contract or produce independently depends on the distribution of income and the nonpecuniary attributes associated with both business arrangements. The benefits to growers from contracting (such as risk reduction) may be overestimated if the nonpecuniary benefits enjoyed by independent producers (such as the right to make management decisions and own the commodity produced) are not accounted for. This study uses data from a U.S. national survey of hog producers to estimate (1) the difference in expected net returns between contracting and independent production, (2) the premium a representative farmer would pay for the risk reduction provided by a contract, and (3) the premium a farmer would pay for the nonpecuniary benefits associated with independent production. Results indicate that growers have a strong preference for autonomy—with moderately risk‐averse growers being willing to pay more for the attributes of independent production than they would for the risk‐reducing benefits of a contract.     

An Evaluation of Indian Government Rice Policy in Tamil Nadu

The Indian government procures rice from wholesalers or producers at a price below the market price and then distributes it to low-income consumers at a subsidized price. This paper uses a simulataneous equations econometric model to evaluate the effects of this policy on supply/demand of rice in the state of Tamil Nadu, between 1956 and 1985. Results show that production is more responsive to power for irrigation and fertilizer prices than to output prices. Because supply is inelastic, producers bear the burden of the ‘tax’ imposed by procurement even though rice is procured from the wholesaler. Rice distributed by the government displaces rice demanded in the open market, and thus the government distribution of rice has not increased the total consumption of rice.     

The Economics of a Blend Mandate for Biofuels

A biofuel blend mandate may increase or decrease consumer fuel prices with endogenous oil prices, depending on relative supply elasticities. Biofuel tax credits always reduce fuel prices. Tax credits result in lower fuel prices than under a mandate for the same level of biofuel production. If tax credits are implemented alongside mandates, then tax credits subsidize fuel consumption instead of biofuels. This contradicts energy policy goals by increasing oil dependency, CO₂ emissions, and traffic congestion, while providing little benefit to either corn or ethanol producers. These social costs will be substantial with tax credits costing taxpayers $28.7 billion annually by 2022.     

Abstracts of Award-Winning Theses

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

WORLD AGRICULTURAL TRADE AND THE NEW GATT ROUND

World agricultural markets are grossly imbalanced with supplies running well ahead of demand at current depressed world prices. At the heart of the problem is the high protection given to agriculture in many OECD countries. In particular, price supports to farmers are too high and incentives to maintain or expand production too great. The success of the Uruguay Round in achieving greater liberalisation of trade in agriculture will depend on the willingness of participating governments to undertake significant reforms of domestic agricultural policies, with the aim of reducing overall protection to agriculture and switching support measures away from direct producer price support to income aid for specific disadvantaged producers. In some countries, this notion has run up against complex politico-social and structural objectives, which prevent these countries from agreeing to any significant price reduction. Price support policies, however, have been ineffective in the long run in retarding the outmigration of labour from agriculture. Measures involving only quantitative controls on production will be useful in the short run to reduce surpluses but will not solve the underlying problems which the new GATT Round must address.     

Economics of Quota Allocation Within Supply Managemnt Analysis of the Present Procedures for Quota Allocation

The institution of supply management has evolved to deal with a farm income problem and to achieve social objectives such as the maintenance of the family farm. In many respects, the institutions have developed in response to significant technological and market development that had potentially profound impacts on the number, size and profitability of farm operations. Supply management has proven successful in transfer— ring income, partially stabilizing prices and production and arresting the spread of vertical integration and maintaining the "family farm." Although the institution has had its failures, more specifically, income transfers have been capitalized into asset values. Second generation farmers will face higher costs and will benefit only if they too can "short the market" and extract monopoly profits from the marketplace. Further, the rigidities in quota allocation methods have inhibited resource allocation, necessary structural adjustments and imposed real costs to consumers. These negative results are incongruent to an otherwise viable and dynamic Canadian agriculture.
Is It North It
One may argue that the consequences of regulation, which are reduced efficiency/competitiveness and lost opportunities, are acceptable if it is felt a transfer of benefits to a disadvantaged group of society is needed. However, can it be held that those farmers operating under supply management remain disadvantaged? If not, regulatory reform and/or adjustments are needed. Otherwise, the tendency towards deregulation in the general economy, widening price gaps, consumer resistance, and the like will lead to imposed changes by regulatory authorities.
Supply management is an acceptable regulatory tool that should be employed to achieve a myriad of policy objectives.     

The future of Russia’s agriculture and food industry between global opportunities and technological restrictions

This paper reports on the result of a major foresight exercise commissioned by the Ministry of Agriculture of the Russian Federation on the prospective developments of the agriculture and food industry up to the year 2030. The exercise identified economic, technological, social and ecological trends that will greatly influence both supply and demand in the industry. The findings provide a decision base for policy-makers to improve the technology base and to ease the reliance on technology imports. The country’s agricultural producers have been struggling with the introduction of new technologies, and customers are showing conservative demand patterns. Previous research showed that technology transfer into Russian agricultural enterprises suffers from a low knowledge level especially in receiving organizations. The country’s own S&T system requires support both for technology development and technology transfer, especially for breeding of best-suited plants and animals for local circumstances. Furthermore, consumer behaviour could be influenced towards higher demand, for example, organic food or ethical husbandry.     

PRIVATISING THE PRODUCTION OF KNOWLEDGE: PROMISE AND PITFALLS FOR AGRICULTURAL RESEARCH AND EXTENSION

In the absence of some form of government intervention, knowledge is a classic public good which will be under-produced because of lack of price excludability. Government intervention may take the form of establishing intellectual property rights, or other means of shielding knowledge-based innovations from imitation or copying. Such intervention offers the prospect of 'privatising' the production of knowledge in the sense that a certain level of private knowledge production may become profitable if producers can appropriate at least part of the benefits of R&D. However, publicly funded R&D or extension still can 'crowd out' private knowledge production by charging lower prices. The principal finding of this study is that such 'crowding out' behaviour may be efficient in the sense of being potentially Pareto superior even if it is at the expense of public funding for so called 'orphan' areas of knowledge production which are privately unprofitable. The reason why conventional conclusions about privatisation and 'crowding out' of private goods need not apply to rural research and extension is that private goods are both rival in consumption and price excludable, while knowledge is intrinsically non rival in consumption even if it can be made price excludable.     

新冠肺炎疫情对全球食物安全的影响及对策

当前,新冠肺炎疫情已在全球扩散,许多本就因为冲突、自然灾害或气候变化而深陷食物不安全的国家和地区的防疫形势也日益严峻。虽然目前全球食物供给总体充足,食物价格稳定,但疫情的快速蔓延将给全球食物安全带来威胁。由于隔离和边境关闭,市场、供应链和贸易受到波及,全球食物的供给受到影响。食物流通渠道可能因运输中断和更加严格的检疫措施而受阻,运输成本和贸易成本增加、效率降低。一些国家为保障国内食物供应而采取限制出口的行为,将影响依赖于粮食进口的国家进口粮食,也不利于依赖于出口初级农产品的低收入发展中国家出口农产品。封锁措施带来的经济影响使居民收入和购买力下降,居民获得充足的营养食物变得更加困难。食物安全不再是一个区域性问题,而是一个需要共同应对的全球性问题,各国应当共同努力,加强合作和全球治理,对最弱势群体采取迅速的保护和援助措施。既要确保国内食物供应链的正常运行,同时,应该保持贸易开放,并利用和创新电子商务保障食物供应,保障全球粮食安全。     

基于供销合作社系统的武汉市农产品流通对策研究

为充分利用供销合作社网络完善武汉市农产品流通供应链体系,文章对供销合作总社近10年来的销售业绩进行提取分析,结果表明:供销社是流通领域中符合体制内运作的重要组织,在农产品流通领域中是解决"买难"、"卖难"的可行性方案,是符合农民利益和提高农民收入的重要路径;创建以供销合作社为核心的农产品交易体系,必将对武汉市的农产品流通具有非常显著的促进作用;供销合作社所占有的市场份额所形成的品牌效应将对农产品流通体系的完善有着直接的正向促进作用。以供销合作社作为研究视角,并提出基于武汉市供销合作社的农产品流通系统需要从建立农产品加工生产专用服务体系、加快供销合作社的农产品流通速度以及合理开发农产品流通电商营销渠道等3个方面入手,减少不必要的生产销售环节的同时,加强各供销合作社的合作规模,以切实建立起便利惠民的农产品流通体系,实现再生产环节中农户经济权益的有效保护。