Is the agricultural industry spared from the influence of the Australian carbon tax?

The Australian agricultural sector provides food security for the nation and affects the livelihood of farmers and the development of rural communities. This sector has been uneasy about the Australian carbon tax scheme introduced in July 2012 although the government has exempted the agricultural sector from the scheme. By employing a computable general equilibrium model and an environmentally extended Social Accounting Matrix, this article simulates the effects of different carbon tax policy scenarios. The modeling results show that all agricultural sectors will be affected negatively but to differing degrees. The household compensation policy will improve the performance of the poultry and fishing sectors, while having opposite effects in the other agricultural sectors. The inclusion of the agricultural industry into the carbon tax scheme will lead to a considerable further decrease in output, employment and profitability in the agricultural sector, and a significant further reduction in real GDP, but a much larger emission reduction.     

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.     

Competition in the US meatpacking industry: is it history?

The US meatpacking industry has become concentrated to a degree not experienced since the days of the ‘Beef trust’ a century ago. A number of mainstream studies have investigated if such concentration has been detrimental to competition. Just as earlier studies may have helped shape competition policy towards meatpacking a century ago, contemporary studies have made their way into current discussions and may shape competition policy at the turn of this century. This paper asks whether or not contemporary studies are useful in informing competition policy. After comparing how competition looks from the econometric vantage point with how it looks from the vantage point of the industry's 300-yr history, this article concludes that mainstream studies are more useful for a competition policy targeting conduct rather than structure.     

Implementing industrial policy: How to choose?

There has been a resurgence of interest in industrial policy in higher income as well as in emerging and still developing economies, in part due to a renewed interest in the role of economic structure, with industrial policy interpreted as interventions designed to shift resources into higher return, higher growth activities. Dialogue with the private sector is critical but central to policy choice is how far policy should be applied on a vertical as opposed to a horizontal basis. This paper surveys the techniques available to guide selectivity, focusing in particular on trade-based indicators. It concludes that whilst in practice some selectivity is necessary, there is a limit as to how far this can be guided by objective indicators and flexibility and experimentation will be required in the application of policy.     

The transformation of the Indian agricultural input industry: has it increased agricultural R&D?

Indian agricultural input industries have gone through a major transformation in the last 40 years. State owned firms grew during the Green Revolution and then stagnated or declined. Indian corporations that were protected from foreign competition are now exporters of agricultural tractors and pesticides. Foreign multinational corporations are rapidly increasing their role in the seed, pesticide, and tractor industries. Entry by large Indian firms and multinationals has increased competition in the input industries. Private agribusiness R&D in India grew from $23 million in 1985 to $250 million in 2009 in 2005 US dollars. This is the same time period as a transformation in the agricultural input industry, rapid growth in demand for agricultural inputs, breakthroughs in information technology and biotechnology, and changes in intellectual property rights. An econometric model was used to test whether the transformation of agricultural input industry was a major factor in the growth of R&D expenditure or not. This article analyzes a unique, firm level sales and R&D data set from the seed, pesticide, tractor, and fertilizer industries in 2000–2009. The estimated model indicates that agribusiness firms' R&D expenditures from 2000 to 2009 were positively related to variables associated with industry transformation such as firm size, ownership by multinationals, and declining industry concentration. The model also indicates that strengthening patent policy as well as growth in the size of research‐intensive industries like the seed industry contributed to the growth of agribusiness R&D in India.     

Vertical integration in West Africa's cotton industry: are parastatals a second best solution?

This article provides a framework to compare market outcomes among vertically integrated monopsonies in the cotton sector of West Africa and alternative, more competitive market structures. Based on a principal agent framework, in the presence of factor market constraints, as well as capital market failure, efficiently operated cotton parastatals increase sector welfare and efficiency by providing input credits. In equilibrium, outcomes with the principal agent model suggest growers receive the reservation income to participate in cotton production while the principal (cotton company) extracts the surplus above the reservation income. Competitive markets entail more equitable distribution of benefits than with parastatal vertical integration, but credit and factor market constraints can still persist. Promotion of a competitive market system will not support cotton productivity growth unless stakeholders pursue complementary programs to develop credit markets and research and extension institutions. In the presence of current market failures, parastatals may be a second‐best solution.     

Meat demand in China: to include or not to include meat away from home?

This study examines meat consumption in China, the world's largest meat consumer and producer, by considering both meat consumed at home and away from home based upon a diary‐based household survey. The results indicate that income growth leads to beef, poultry, other meat and pork away from home consumption to grow more than proportionally to total meat consumption. We also find that meats consumed away from home grow faster than at home counterparts due to higher income elasticities, suggesting that ignoring meat away from home could significantly underestimate current and future meat consumption.     

Better Access to Water,Better Children's Health: A Mirage?

In Egypt, diarrhoeal diseases remain the main cause of mortality among young children, although the percentage of households with an “improved” access to water, according to the definition used by the World Health Organisation (WHO), is very high. This article seeks to shed light on this paradox, by better identifying the populations affected by problems of access to water, taking into account three dimensions—the time it takes to access a source of water, daily cut-offs and behaviour with respect to storage—and by applying alternative matching estimators to estimate the effects of defective water access on child diarrhoea. It is found that children whose families are identified as having a water access problem through the use of broader-based definitions have a greater likelihood of contracting diarrhoeal diseases. This article, thus, shows that the mortality of children in Egypt could be further reduced by improving households' access to water.     

Cash Transfers in Nepal: Do They Contribute to Social Inclusion?

It is often assumed that social protection leads to social inclusion and other well-being indicators. Yet evidence of this impact is weak. Cash transfers are a social protection tool designed to reduce poverty which can also have an impact on human development indicators such as health and education. In the district of Sarlahi, Nepal, cash transfer amounts are too low to improve health and education opportunities or productive pursuits and thus to break the inter-generational cycle of poverty. However, the transfer allows beneficiaries to participate more in community activities, increases their access to information and social networks, and enhances the social contract and people's relationship with the state. This breaks down some of the invisible barriers that perpetuate exclusion. Paying cash transfers in Nepal kick-starts other processes of inclusion and well-being that are hard to overcome by other means because they are invisible, denied and relational. The findings reveal that universal transfers generate perceptions of equality for beneficiaries who value receiving the same thing from the state as the rich. Yet being treated the same as the well-off will not necessarily lead to equal opportunities, poverty reduction or improved local governance. Cash transfers can facilitate social inclusion but are not enough alone to achieve substantive inclusion.     

Deregulation of wholesale petrol prices: what happened to capital city petrol prices?

Wholesale petrol prices were deregulated in August 1998. This paper will quantify the effect associated with the deregulation of wholesale petrol prices on relative retail prices for unleaded petrol in Adelaide, Melbourne and Sydney. This is done through Box–Jenkins autoregressive integrated moving average methodology coupled with Box and Tiao intervention analysis. Weekly price data will be used for Adelaide, Melbourne, and Sydney. It finds that from the beginning of 1999, deregulation coincided with relatively lower retail petrol prices for all three cities. In the absence of any other possible alternative explanation for the simultaneous fall in relative retail petrol prices across all three cities, it is concluded that this change was most likely associated with deregulation. These results suggest that regulation of wholesale petrol prices were ineffectual in terms of constraining capital city retail petrol prices at the very least and may have actually contributed towards relatively higher retail petrol prices. This also suggests that future policy interventions designed to constrain prices in the downstream petroleum industry should be very carefully considered.     

Farmers and their groves: Will cost inefficiency lead to land use change?

Increased forest areas and climate change mitigation are policy goals enhanced by expanding private forest ownership. This study shows transfer of land from farms owning forested acreage associated with low quality land and high production costs achieves such goals. Calculated cost efficiency scores show a large gap between the most and least efficient farms, and farms with forests are less cost efficient. Land reforestation through subsidy programs could replace income from agricultural production. We illustrate that farms from the applied FADN panel could reforest 45,000 hectares, binding about 0.5 mln tons of carbon annually without limiting food or feed supply.     

Willingness to Pay and QALYs: What Can We Learn about Valuing Foodborne Risk?

This paper examines the value of reducing foodborne risk. Previous research on the valuation of health risk has been dominated by the study of mortality risk. However, in most cases foodborne illnesses are non‐fatal, so we focus on individuals' preferences for reducing morbidity risk, while also including a realistic, if remote, chance of death. We use a contingent valuation method on a Swedish sample and we estimate a value of a statistical illness consistent with previous findings in the literature. We also examine how willingness to pay (WTP) varies with the expected change in quality‐adjusted life years (QALYs) and estimate the WTP per QALY. We find that WTP increases with, though less than proportionally to, a change in QALYs. However, our results also suggest that respondents may have found it difficult to evaluate compound risks of both morbidity and mortality simultaneously.     

Water–milk nexus in India: a path to a sustainable water future?

This paper examines the nexus between milk production and water use in India. The nexus is examined in the context of extended consumptive water use (CWU) of milk production beyond drinking water. It includes the real CWU (evapotranspiration (ETa) that occurs during the production of green fodder and feed grains) and the virtual CWU (ETa embedded in by-products for animal feed). The real CWU appears as large as that of sugarcane, and the real and virtual CWU combined is as large as that of rice. However, milk production generates more value than the outputs of rice and sugarcane combined. Sustainable water use and agricultural growth in major milk-producing areas require a drastic reduction in groundwater CWU, which, at present, exceeds natural recharge. It is suggested that diversifying to a mix of milk and high-value (but low water consuming) crops can reduce groundwater CWU while ensuring higher total output.     

Foreign Aid and the Quest for Poverty Reduction: Is Aid to Agriculture Effective?

Development statistics estimate that three quarters of the poor live in rural areas and most of them depend on agriculture and related activities for their livelihood. Consequently, research focusing on economic growth and poverty reduction has found that sustainable rapid transition out of poverty requires a special emphasis on the agricultural sector. This study contributes to the debate on aid effectiveness by disaggregating total aid into subcategories and specifically investigating the relationship between aid given to the agricultural sector and poverty reduction. If agricultural development is more effective in reducing poverty than some other types of development, then foreign aid directed towards agriculture may be more efficient in increasing the well‐being of the poor than aid directed to some other sectors or uses. Our analysis uses panel data for developing aid recipient countries to empirically test this relationship. We find a significant relationship between agricultural aid and poverty reduction in our estimates.     

Environmental Concerns and Food Consumption: What Drives Consumers’ Actions to Reduce Food Waste?

Consumer behavior and food consumption comprise the largest amount of waste in the food chain. This study aimed to identify the relationships among consumer environmental concerns, their awareness of food waste, demographics, and their food consumption. The findings suggest that food waste prevention is positively influenced by consumers' environmentally conscious buying, food waste awareness, bulk buying, frequency of home cooking, and age. Impulsive food purchasing, the frequency of eating out, and the number of people in the household negatively influence food waste prevention. Food policy makers and retailers should be involved in educating and encouraging consumers to minimize food waste.     

Consumer responses to new food quality information: are some consumers more sensitive than others?

Missing information prevails in consumer purchase decisions and studies on consumer preferences. Previous research ignores the relationship between consumer types and their responses to new quality attribute information. In this article, consumer responses to new attribute information are compared across consumer groups. Results show that single households with low income are more responsive to new information than married households with high income. Both groups respond to new information more intensively when a cue attribute, Certified U.S. Product , is presented to consumers.     

A Case Study of Technological Switching and Technological Lock‐In in the French Fisheries Sector: Why is Sustainable Change so Difficult?

Many sectors such as the fishery show classic examples of technological lock‐in and path dependence, even though some economists might predict smooth switching toward technologies that are more cost effective and sustainable. We use ideas from the evolutionary economics and public choice literatures to explain why trajectories of technological change, especially in fisheries, may not be smooth at all, but rather punctuated. The interest of technological change and switching behavior for fisheries economists and managers stems from the fact that control of effective effort, often necessary for sustainable management of the resource, remains a central management problem for that sector worldwide, even in developed countries. However, various policies put in place by governments to support the fishing sector, and often put in place to “correct” for certain market failures, may inadvertently produce other “nonmarket” failures, which result in technological lock‐ins which are unsustainable. For example, the trawling technique was widely promoted in France in the 1970s and 1980s. Path dependency developed in such a way that the preferred choice of new entrants into the fishery was this technology. Technological lock‐in occurred on the trawling technique as the trawling sector also became more politically active, making it ultimately the most widely used technique in the French fisheries sector in the Atlantic. Switching away from this technology has not taken place even with poorer economic performance of that technology. This paper also discusses the influence of state subsidies on the adoption of trawling. Even if trawling was a major innovation in fisheries in the past, its potential for technological adaptations or minor innovations is limited now. These limitations are more obvious during periods of increasing energy prices, especially in the absence of state aid. However, due to collective choice phenomena, switches to more sustainable technologies will occur more slowly. Plusieurs secteurs, tel que celui des pêcheries, offrent des exemples de verrouillage technologique et de dépendances au sentier, alors même que les économistes s’attendent à un changement régulier vers une technologie plus efficace en termes de coûts et plus soutenable. Nous nous appuyons sur la littérature évolutionniste et des choix publics afin d’expliquer pourquoi les trajectoires du changement technologique, en particulier dans les pêcheries, peuvent ne pas être régulières, mais au contraire discontinues. L’intérêt des économistes et des gestionnaires pour le changement technologique et le comportement face au retour des techniques est lié au contrôle de l’effort réel, souvent nécessaire pour une gestion durable de la ressource. Le contrôle de l’effort reste le problème essentiel de la gestion des pêches à l’échelle mondiale, y compris dans les pays développés. Toutefois, de nombreuses mesures publiques mises en place par les gouvernements pour soutenir le secteur des pêcheries, afin de «contrecarrer» certaines défaillances du marché, peuvent déboucher involontairement sur d’autres défaillances «non marchandes», se traduisant par des verrouillages technologiques non‐soutenables. Par exemple, la technique du chalutage fut largement diffusé en France dans les années soixante‐dix et quatre‐vingt. Un sentier de dépendance s’est développé tel que les nouveaux entrants dans la pêcherie optaient pour cette technologie. Un verrouillage technologique s’est produit sur la technique du chalutage rendant ce secteur politiquement important, et finalement la technique la plus répandue parmi les pêcheries françaises de l’Atlantique. Un changement de technologie n’a donc pu survenir, même en présence de faibles performances économiques. L’article traite de l’influence des subventions étatiques liées à l’adoption du chalutage. Même si cette technologie fut une innovation majeure dans les pêcheries par le passé, les adaptations techniques potentielles ou les innovations mineures sont désormais limitées. Ces limites apparaissent clairement dans les périodes de coûts énergétiques croissants, notamment en l’absence d’aides étatiques. Toutefois, en raison du phénomène de comportements collectifs, les changements vers des technologies plus soutenables se déroulent avec lenteur.