FARM INCOME POLICY IN ONTARIO: REVIEW AND ANALYSIS

This paper discusses and evaluates "The Challenge of Abundance" [l]. The recommendations of the Ontario Farm Income Committee are reviewed, the assumptions implicit in the recommendations are presented and the shortcomings of the Report discussed. The author, while finding a number of sound recommendations, ques the extreme emphasis on government intervention and control; the lack of research documentation; the failure to adequately comprehend the dependence of Ontario farmers on inputs from and sales to the rest of Canada and foreign countries; and the absence of a program to assist the majority of farmers who would no longer be allowed to produce food.
LE REVENU AGRICOLE EN ONTARIO: REVISION ET CRITIQUE — Cet article discute et évalue "The Challenge of Abundance" [l]. Les recommandations de la commission ontarienne sur le revenu agricole sont examinées, les assumptions dans les recommandations sont présentées, et les imperfections du rapport sont discutées, Tout en constatant plusieurs recommandations sérieuses, l'auteur interroge l'appuie intense donné à l'intervention et l'autorité govememental; le manque de documentation; l'incompréhension vis à vis la dépendance du fermier ontarien dans la vente au reste du Canada et à l'étranger; et l'absence d'un programme qui assisterait la majorité des fermiers qui ne sont plus permis de produire les aliments.     

Production functions in Agriculture

The purpose of this paper is to investigate the quadratic production functions used by D. Gale Johnson [4] in his investigation of sharecropping and by H. Scott Gordon [3] in his classic analysis of a common property resource. Both Johnson and Gordon use linear average and marginal production functions in the geometric exposition of their respective theories, but neither author has explored the unusual properties of the quadratic production function which yields a linear marginal product and average product for one factor. The first part of this paper will investigate the quadratic production function used by Johnson in his sharecropping study, and the second part of this paper will explore the similar quadratic production function employed by Gordon in a subsequent paper on the economic theory of fisheries. In his seminal study of sharecropping, Johnson finds that when one maximizes with respect to labor, the tenant will rent additional land until the marginal physical product of land is zero. He demonstrates this remarkable result in two ways. First he does so with calculus by using a neoclassical production function, and second he does so with geometry in Figure 1 of this classic paper. [4]. Although the calculus is correct, his geometric example raises interesting questions. He says linear functions are shown in Figure 1 of this paper for simplicity, but the example can be generalized for any type of average product function. However, he does not explain what type of production function can generate linear marginal and average product functions, and it is the intention of this paper to do so. In particular, one can ask whether such a production function is neoclassical, or one can ask what is the nature of the marginal and average product functions for the second factor of production? Also, one can ask whether such a production function is linear homogeneous? The properties of a neoclassical production function can be found in Burmeister and Dobell [1]. They list six properties of a neoclassical production function, Y = F(K,L):     

Testing for pre‐committed quantities of Australian meat demand

Pre‐committed consumption represents the portion of demand that is determined by non‐price and non‐income factors. This study uses quarterly data to estimate a Generalised Almost Ideal Demand System (GAIDS) to test for the existence of pre‐committed meat consumption in Australia. Two specifications are estimated to evaluate the impact of seasonal and time trend factors on pre‐committed demand. Evidence is found for the existence of pre‐committed chicken consumption when jointly estimated with seasonal and time trend factors. Results support improved demand modelling of Australian meat consumption using the GAIDS and provide insights into how Australian meat demand is affected by price, expenditures, pre‐committed consumption, seasonality, and trends.     

DISTRIBUTED LAGS AND BARLEY ACREAGE RESPONSE ANALYSIS

The need to incorporate production response lags in agricultural supply models is established, and two such lags are considered: the familiar adaptive expectations geometric lag, and a more general polynomial lag. These distributed lag supply response models are applied to Australian barley data for the period 1946-47 to 1968-69. A number of statistical problems associated with the adaptive expectations model are discussed, and in particular it is concluded that lags both in the formation of price expectations and in acreage adjustment should be considered when using geometric lag models. While the polynomial lag model does not provide useful results in the present study, its simplicity and flexibility suggest it may be useful in other studies requiring distributed lag models. The short run and long run price elasticity of barley supply estimates are compared with Gruen et al. [14] supply elasticities for the other major rural commodities, from which it appears that barley has a higher short run elasticity but a lower long run elasticity than wheat, wool and meat.     

AGRICULTURAL REFORMS IN CHILE AND NEW ZEALAND: A REVIEW*

Chile and New Zealand are both small countries for which agricultural exports are important: both undertook comprehensive economic reforms during the 1970s and 1980s respectively. Comparison of the experiences shows that macroeconomic policy, above all the resulting movements in the real exchange rate and in interest rates, has a critical impact on agriculture. In both cases, rolling back the state has encouraged private responses. In Chile the challenges ahead lie in continuing productivity improvements, and in raising the welfare of smallholders in marginal areas. Six years after the initiation of reforms, New Zealand agriculture shows a healthy recovery. Once committed to economy-wide reforms – stabilisation, adjustment, and trade liberalisation – and companion reforms of institutions, how do governments best proceed? With what reforms and in what mix, sequence, strength, and speed? For agriculture, specifically, this paper takes a close look at which reforms, or aspects of their implementation, can accelerate or slow down private investment and aggregate supply response.     

Comparing heterogeneous consumption in U.S. and Japanese meat and fish demand

This article uses national, quarterly data to conduct an empirical analysis of pre‐committed meat and fish demand by U.S. and Japanese households using the generalized almost ideal demand system (GAIDS). Pre‐committed demand represents the component of demand that is insensitive to both income and price adjustments. U.S. consumers are found to hold significant positive pre‐committed demand for beef and pork, while Japanese consumers appear to possess significant, positive pre‐committed demand for beef and fish. This provides evidence to partially explain observed differences in Japanese and U.S. consumer reactions to nonprice and nonincome effects in beef, pork, poultry, and fish. In addition, based on in‐ and out‐of‐sample performance, the more general GAIDS is preferred to the almost ideal demand system (AIDS) for both the U.S. and Japanese demand systems. Results lend to improved demand modeling efforts and more complete understanding of true market forces at hand in meat and fish markets for these culturally diverse consumer groups.     

Consumer information on Distributor and Manufacturer Brands of food

Consumer information affirms that distributor brands of food are less expensive than corresponding manufacturer brands¹ and that these brands are equal in quality [2, p. 8]. The price difference between these two types of brands thus represents a real gain to the consumer purchasing distributor brands rather than just a case of paying less for lower quality products. Furthermore, one source has estimated that ten per cent of the grocery bill can be saved through purchasing distributor brands [6]. The credibility of this information is open to question however, as few statements concerning the price and quality of these types of brands have been carefully documented in Canada. In the light of the limited empirical support and the substantial consumer benefit involved, the purpose of this study is to test the reported relation between the price and quality of distributor and manufacturer brands. Establishing a working definition for quality is a key problem encountered in price-quality analysis. Food quality is multidimensional and its various dimensions may be classified into two broad categories: subjective or sensory attributes such as taste, aroma, appearance; and objective attributes located below the threshold of perception such as nutrients and freedom from harmful micro-organisms. Because the sensory attributes are more amenable to measurement by non-food scientists and to variation in hidden attributes being controlled by law, this paper focuses on sensory quality. The quality and preference concepts overlap to some extent, as the subjective attributes of food are common to both quality and preference. To ensure that “sensory quality” is well distinguished from overall quality, “sensory quality” is referred to as “sensory preference”. Having gone some distance towards establishing an operational definition of quality, the principal objectives are: Summary The findings, though tentative and focused on the sensory component of quality, can scarcely be regarded as providing empirical support for the price-quality information referred to earlier. Distributor brands were notably less expensive for three-quarters of the products surveyed. As well, the manufacturer brand was rated significantly higher than at least one distributor brand for four of the ten products subject to sensory evaluation. The results therefore suggest that there is a very general tendency for distributor brands to be priced lower than manufacturer brands and to be of equivalent quality.     

INCOME TAX DATA AND FARM FINANCIAL STATISTICS

Tracing the income patterns of individual farm operators whose major source of income is generally derived from farming indicates that off-farm income is becoming an increasingly important income component. The relative importance of off-farm income has nearly quadrupled during the last 20 years, rising from about 10 percent of total income to about 37 percent of total income. Most of this off-farm income can be traced to wages and salaries. These fractions are heavily dependent upon relative income levels. In 1970, very low income farmers posted an aggregate net farm loss whereas the $15,000 - $20,000 class secured about three-quarters of their total income from farm sources. In this same year, wages and salaries were generally the prime off-farm income source for farmers with an assessed income of less than $20,000. Dividends and interest were more important to farmers with an income in excess of $20,000. These differences are faithfully reflected in the regional compilations. As a percent of total income, off-farm income ranged from 41 percent in Ontario to about 29 percent in Quebec. The composition of off-farm sources also varies considerably between regions. In 1970 the income position of taxable unincorporated farm operators (who relied on the farm for their major source of income) remained relatively unfavorable. These farmers still had one of the lowest average incomes of any major occupational class in Canada, with an income distribution which was relatively equally distributed between income classes and not unlike that of the national average. These assessed income statistics, of course, are not necessarily indicative of the welfare position of the respective occupational classes. The calculations conducted are simply illustrative of how income tax statistics can be utilized to facilitate our understanding of the income structure in primary agriculture today. The exercise simply underlines the observation that: The fact that there are conceptual differences between income tax data and other data sources should not detract from the usefulness of the income tax data …. Income tax statistics can stand as an independent data source for the analysis of a variety of issues [13]. For many purposes the tax definition of a farm operator may be more operational than the concept of a farmer as defined in the Census of Agriculture. We might profit considerably from further analyses which attempt to disaggregate Census farms into more homogeneous farm-types using the tax statistics available.     

A QUADRATIC PROGRAMMING INTERREGIONAL TRADE MODEL: AN APPLICATION AND A PERSPECTIVE*

This paper presents a theoretical activity-type model of U.S. interregional trade for the agricultural sector as an extension of the broad non-linear programming formulation of Samuelson [4] and the quadratic programming reformulation of Takayama and Judge [5]. A shorter model is applied to the problem of examination of the short-run competitive strength of Wisconsin, particularly in beef and pork (interregional) trade. The conclusions for Wisconsin suggest competitive price disadvantages in beef and beef feeding but with belter prospects for expansion for a pork sector At a time of growing interest in the probable impact of expanded and freer Canada-US. trade, this type of programming model is suggested as a significant approach to problems of Canada-U.S. trade. In addition, in an apparently emerging era of regulated marketing and production control, the employing of such a model for interregional market share analysis appears a major possible policy avenue Ce papier présenle un modèle théorique “Type-activiie” du commerce interregional aux Etats-Unis, pour le secteur agricuhurel, en guise ?extension du propos de vaste programmation non-lineaire, tel que formule par Samuelson [4], ainsi que celui de Takayama el Judge [5], qui proposent une réformulation de programmation quadraiique. Un plus petit modèle est appliqué au probleme ?examinalion de la force immédiate et compétitive de Wisconsin, tout particulièrement dans le commerce (interrégional) du boeuf et du pore. Les conclusions tirées pour Wisconsin suggèrenl un prix com-pétitif qui désavantagerait le boeuf el ?alimentaiion du boeuf, mais qui favoriserait ?expansion du secieur du pore A un temps oú?on se préoccupe de ?impact tout probable dûà un commerce plus libre et plus étendu entre le Canada el les Etals-Unis, ce genre de modéle de programmation est suggéré comme étant une approche significative aux problèmes de commerce Canada-Eiats-Unis. En plus, en celle époque qui semble mettre de plus en plus ?emphase sur le marché ajuslé et le comrôle de production, les possibililés ?employer un lei modéle pour ?analyse de la part du marché interrégional nous apparait comme étanl une possibilité majeure en fait de ligne de conduiie.     

The influence of management characteristics on the technical efficiency of wheat farmers in eastern England

Technical efficiency of wheat farms in eastern England is measured through the estimation of a stochastic frontier production function using panel data for the 1993–1997 crop years. Variations in the technical efficiency index across production units are explained through a number of managerial and farm characteristic variables following Battese and Coelli (1995) [Empirical Econ. 20, 325–332] and incorporating the spirit of Rougoor et al. (1998) [Agric. Econ. 18, 261–272]. The technical efficiency index across production units ranges from 62 to 98%. The objectives of maximising annual profits and maintaining the environment are positively correlated with, and have the largest influence on, technical efficiency. Moreover, those farmers who seek information, have more years of managerial experience, and have a large farm are also associated with higher levels of technical efficiency. Future studies that seek to explain variation in technical efficiency should include further aspects of the managerial decision‐making process.     

HERD STRUCTURE AND MILK SUPPLY RESPONSE

Research on milk supply response has previously concentrated on changes in the national herd and changes in yield. It is argued that this does not provide a sound foundation for understanding the secular increase in milk output given generally declining real milk prices. A recent theory of farm size is outlined and adapted to explain changes in dairy herd size. The herd size determinants are the relative costs of labour and capital. The theory is used to specify equations which are estimated to explain changes in the number of herds, the average size of herds, and yields in England and Wales 1964–1982.     

Mix and sequencing of economywide and agricultural reforms: Chile and New Zealand

Once committed to economywide and sectoral reforms – stabilization, structural adjustment, and trade liberalization – and companion reforms of institutions, how does government best proceed? With what reforms in response to initial conditions, and in what mix, sequence, strength, and speed? This study examines what factors were most critical to success during transition in two early reformers. The economies of Chile and New Zealand have undergone seismic reforms, starting in the mid-1970s and 1980s, respectively. Comparative analysis of their reforms look at the prior conditions that induced drastic action and the policy choices made in each country. Though similar in many respects, differences in initial economic conditions and implementation led to dissimilar, even contrary results. For Chile, the outcome was a vigorous, recharged economy and agricultural sector; for New Zealand, the economy and the sector are lagging still. How policy choice and implementation, as well as simultaneity of reforms, affected the outcomes is the major thrust of the study. The preeminence of trade and macroeconomic policies over sectoral interventions, and in particular the strategic nature of the real exchange rate in allowing agriculture to compete domestically and internationally highlight the discussion.     

TAX CHANGES AND MACHINERY INVESTMENT

The effects of recent tax changes on the profitability and feasibility of machinery investment and on the incentive for the substitution of labour by machinery are studied. Using two examples, variations in tax, interest and inflation rates are also evaluated, as is the effect of the consideration of tax bands. The results indicate that not only has the change in capital allowances made machinery investment less favourable, but so also does the use of tax bands, especially for more expensive items. If interest and inflation rates decline in the longer term the profitability of machinery investment will deteriorate, although feasibility may improve.     

A note on the Solution of spatial Price and Allocation Models

Models of spatial and temporal price and allocation have enjoyed widespread acceptance in agricultural economics and continue to be employed, refined and extended in the literature. In this journal, for instance, contributions have been made by Yaron et al. [16], Ghosh [2], Baumes and McCarl [1] and Jenson and Piedrahita [4]. It is the purpose of this note to draw attention to a versatile and computationally efficient nonlinear programming system called MINOS, as yet little known outside the operations research community, for the solution of nonlinear price and allocation models — including the widely applied special class of quadratic programming models. This software system has several features which very strongly commend its use to the practitioner and have already led to its adoption for solving nonlinear models by Manne [7] and Rowse [10], among others. A skeletal outline of several of the principal advantages of the MINOS system follows and an example of its use in solving a small nonlinear model is provided.     

THE RELATIONSHIP BETWEEN FOOD PRODUCTION AND CONSUMPTION VARIABILITY: POLICY IMPLICATIONS FOR DEVELOPING COUNTRIES

This paper examines whether there is increased inter-year instability in food consumption at the national level, and to what extent this is attributable to increased instability of food production in the wake of adoption of modern agricultural technology. The data analysed indicates that increased production instability does translate into increased fluctuations in consumption. Nevertheless, year-to-year consumption variability among the sample of 38 countries has declined during the past 25 years. This is attributed to improved stocking operations and trade practices which accompany economic growth. Nevertheless, food insecurity, as measured in terms of fluctuations around trend levels of consumption, does remain a problem, especially among the poor. Therefore, policy options to reduce consumption instability are outlined.     

PRODUCTION STRUCTURE AND THE AUSTRALIAN SAWMILLING INDUSTRY*

This paper examines the production structure of the Australian sawmilling sector over the period 1950-51 to 1984-85 using a translog cost function. The results show that the sawmilling industry is best represented by a production function which does not have any restrictions on functional form. Inputs, including capital, labour, materials and energy, are generally found to substitutable for one another, although the degree of substitutability is small. There have been economies of scale in the Australian sawmilling industry, and technological change has been capital and energy-using, and labour and materials-saving.     

An Empirical Comparison of "Frisch" and "Time Series" Demand price Elasticities for individual Commodities

In a classical article in 1959, Ragnar Frisch [8] developed a procedure, which, under the assumption of want independence¹ and given commodity budget shares, income elasticities, and one own-price elasticity, allows one to calculate a complete matrix of own and cross price elasticities. Between broad commodity groups such an assumption (want independence) has becme increasingly accepted and in fact under the label of separability has formed the basis for a family of demand models that are increasingly used to estimate demand elasticities for broad commodity groups (the linear expenditure system, the Rotterdam model, etc.). At the individual commodity level however, the assumption of want independence seems less viable, e.g., the utility one derives from pork is in general not considered independent from one's consumption of beef. However, it has become increasingly common (and apparently acceptable) to find the Frisch methodology utilized to develop demand price elasticity estimates for individual agricultural commodities [4, 7, 17].     

An Application of spectral analysis in determining crop Rotation Frequencies

Spectral analysis has been applied many times in agricultural economics in determining harmonic characteristics of observed time series. However, spectral techniques have rarely been applied in conjunction with models which stress economic relationships. But two such empirical approaches are possible. One can use either frequency-domain regression of times series, i.e., general distributed lag estimation, in which time series of all important economic variables are considered [4, 5, 11], or one can use ordinary econometric estimation methods and then study frequency content of estimated disturbances with spectral techniques [1, Chapter 10]. The application of spectral analysis in this paper corresponds to the latter case. Ordinary time-domain (rather than frequency-domain) regression methods are used because the general lag relationship estimated here is not a case included in the general frequency-domain regression model. First, nonlinear regression techniques are used to explain the usual economic content of acreage supply response. Then estimated disturbances are investigated using spectral analysis to determine the importance of cyclic behavior in aggregate supply response. Specifically, this paper demonstrates how a cross section of time series may be pooled to obtain statisticaly significant findings when time series are short. These methods are demonstrated in an investigation of harmonic content in regression disturbances apparently due to crop rotation.     

Developing policy guidelines for the management of public natural lands

Policy guidelines are important decision aids which suggest how, in principle, the land, time, equipment and funds controlled by a public land manager should be committed to fulfil the long term purposes of management programmes. This article identifies several types of policy guidelines, and some approaches to the task of developing a set of such guidelines (a policy plan) for the management of a specific tract of public land.     

开发匙吻鲟养殖的实践与探讨

本文通过对匙吻鲟的生物学特性,国内外市场,养殖经济效益的可行性分析,论证了在我国系列开发匙吻鲟的广阔前景