Is Australia on a sustainability path? Interpreting the clues*

Genuine savings is a conceptually valid one‐sided indicator as to whether Australia is on a weak sustainability path (negative GS would warn that current welfare is unsustainable). The World Bank's adjusted net savings (ANS) data summarise the available evidence, and by this indicator Australia is muddling along, at best. ANS misses some important pieces of the picture – net depletion of water, soil and biodiversity, and most kinds of pollution damage – and thus overstates Australia's genuine savings performance. Weak sustainability can be promoted by getting the prices right, and piecemeal efforts are underway via regulatory approaches and resource/environmental markets of various kinds. Nevertheless, particular resource problems – habitat conservation, biodiversity, climate change and dryland salinity – are likely to also require strong sustainability approaches. A sustainable future involves pushing weak sustainability as far as the body politic permits, invoking precautionary instruments for specific resource crises, and nurturing policy processes that encourage the consensus‐building that will be necessary to get it done.     

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.     

Defining and delivering ‘sustainable’ agriculture in the UK after Brexit: interdisciplinary lessons from experiences of agricultural reform

Defining and achieving sustainability in the context of complex, multi-scale, and constantly changing agricultural systems is a challenge for research and policy. In UK agriculture, the European Union and its Common Agricultural Policy has been a key source of funding for and approaches to sustainability in the agriculture and rural development sectors. The decision to leave the European Union represents a significant moment in UK agriculture and rural development policy, and both an opportunity and responsibility for the UK government to set out and commit towards achieving sustainability goals for the sector. In this study, a combination of ethnographic case study research, focusing on the case of upland farmers in the Yorkshire Dales, policy analysis and national agricultural sector data is referred to in describing experiences of agricultural policy reform over recent decades. From these experiences, lessons for the design and delivery of future agriculture and rural development are drawn out. It is argued that the integrated assessment of multiple sources of knowledge can provide a means to critically reflecting on evidence about sustainability in complex systems, better understanding trade-offs, and creating a more complete and inclusive knowledge base from which to define sustainable agriculture.     

Does sustainable agricultural growth require a system of innovation? Evidence from Ghana and Burkina Faso

This paper tests the ‘systems of innovation’ hypothesis for a selection of crops in Ghana and Burkina Faso that have shown significant growth in production over an approximately 20-year period. The question is whether such growth can only occur if supported by a system of innovation. Using two indicators (a common understanding on objectives and priorities, and a high level of interactivity), we find little evidence for the existence of anything that might be considered a high functioning system of innovation.     

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.     

Is the growth of regionalism as significant as the headlines suggest? Lessons from agricultural trade

The proliferation of regional trade agreements (RTAs) has motivated a significant number of ex post econometric studies investigating their agricultural trade impacts. The general conclusion is that RTAs increase members’ trade by as much as 150%, on average. In this article, we demonstrate that previous empirical work likely misrepresents the impact of RTAs because of considerable heterogeneity in the depth of economic integration pursued by these agreements. Contrary to previous studies, the results reveal that RTAs are not universally trade creating, and some agreements appear to provide very little benefit. “Deep integration agreements,” on the other hand, are largely responsible for the impressive agricultural trade flow increases reported in the literature. Testing the hierarchy of RTAs largely confirms the theory: the benefits of regionalism are an increasing function of the depth of economic integration.     

SPS and TBT agreements and international agricultural trade: retaliation or cooperation?

In this article, we investigate whether the Brazilian notifications to the TBT and SPS agreements are characterized as retaliation or as cooperation in international agricultural trade in the period 1996–2008. A Generalized Method of Moments (GMM) model is used to estimate game models of bilateral trade between Brazil and its major partners (United States, European Union, and Japan). From the viewpoint of strategic games, the results suggest that the Brazilian notifications are forms of retaliation against the United States, and, regarding the European Union, the best result for Brazil was conciliation. On the other hand, if the results are interpreted as equilibria of bargaining games, they suggest that Brazil has great bargaining power in trade with the United States and that cooperation characterized agricultural trade between Brazil and the European Union in the period analyzed. In the case of agricultural trade between Brazil and Japan, only Japan has characteristics of a country with significant bargaining power.     

Informal barriers and agricultural trade: does monetary integration matter?

EU enlargement and the recent sovereign‐debt crisis of Euro zone countries have revived the debate around the (European Monetary Union) EMU. In this article we ask how informal barriers to agricultural and food trade have changed since the introduction of the common European currency, and whether this evolution can be attributed to monetary integration. We focus on the foreign trade of the 11 EMU founder countries over a nine‐year period covering the creation of the EMU and find a diminishing marginal trade impact of both information and institutional barriers. We find a lower level of trade barriers, but cannot attribute this outcome to the introduction to the Euro.     

Is a slowdown in agricultural productivity growth contributing to the rise in commodity prices?

A slowdown in the rate of agricultural productivity growth is thought by many observers to be contributing to the recent rise in agricultural prices. In this article I decompose sources of output growth in global agriculture into aggregate input and total factor productivity (TFP) components and examine whether productivity growth slowed substantially in the years leading up to the recent rise in commodity prices. Contrary to widely held perceptions, I find no evidence of a general slowdown in sector‐wide agricultural TFP, at least through 2006. If anything, the growth rate in agricultural TFP accelerated in recent decades. However, the results do show a slowdown in the growth of agricultural investment. Accelerating TFP growth largely offset decelerating input growth to keep the real output of global agriculture growing at about 2% per year since the 1960s. Regionally, however, agricultural productivity performance has been uneven. These findings have important implications for the appropriate supply‐side policy response to the current agricultural price crisis.     

Does willingness to pay increase with the number and strictness of sustainability labels?

Labels signaling sustainable product attributes are gaining importance, although uncertainty concerning the environmental, micro‐ and macroeconomic benefits of such labels persist. One of the questions still incompletely answered is whether Willingness To Pay (WTP) varies with a gradually increasing number of labels on a food product. In order to answer this question, we conducted a laboratory experiment with 191 student respondents, testing consumer valuations of different labeling strategies. Using the Becker‐DeGroot‐Marschak mechanism, WTP for 15 food products was measured. The products were endowed with up to six different sustainability labels, such that each grocery item was available in eight product versions. For perishable, nonperishable, and plant‐based products, the results indicate that participants are prone to allocating WTP‐premiums to labeled products, more than to unlabeled products. For animal products, however, labels do not influence WTP significantly. Furthermore, the premiums do not vary with an increasing number of labels, irrespective of whether the labels signal substitute or complementary sustainability information. The results are not entirely in line with normative notions of magnitude variation, but rather with the behavioral economic concept of embedding effects.     

Smallholder cooperatives and agricultural performance in Rwanda: do organizational differences matter?

Agricultural policies in Rwanda focus on agricultural intensification and increased market orientation of the smallholder farm sector. Cooperatives are seen as key vehicles in this, but little is known about their effectiveness to achieve these goals. In this article, we analyze the impact of cooperative membership on the agricultural performance of rural households in Rwanda. We use cross‐sectional survey data, collected in 2012, to analyze the impact of cooperative membership on different agricultural performance indicators, including indicators on agricultural intensification, market orientation, farm revenue, and income. We use several econometric techniques to deal with potential selection bias in estimating the impact of cooperative membership, including a proxy variable method based on a willingness to pay measure and propensity score matching methods. We find that cooperative membership in general has a positive impact on farm performance but these effects are driven by specific types of cooperatives.     

Is the West really the best? Modernisation and the psychosocial dynamics of human progress and development

Scientific and political interest in measures of human progress and development is increasing, but the indicators are far from capturing all we need to know. They place Western liberal democracies at the leading edge of progress, and present them as models of development; Western nations typically occupy all but a few of the top 20 places in progress indices. However, indicators are measuring modernisation rather than optimal quality of life or well-being; modernity’s benefits are counted but its costs are underestimated. In particular, the measures do not adequately acknowledge the ‘psychosocial dynamics’ of human societies: the complex interactions and relationships between the subjective and objective worlds. Unless we pay more attention to these dynamics, we will not develop solutions which match in scale the problems they are intended to address. Indicators need to allow a transformation in our worldview and beliefs as profound as that which gave rise to modernity.     

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.     

Who you know and when you plough? Social capital and agricultural mechanization under the new green revolution in Ghana

This paper examines the role of social capital in smallholder agriculture mechanization in Ghana under the ongoing agenda for transformation of African agriculture through the new green revolution. It contributes to the ongoing debate on the potential of social capital in explaining socioeconomic activity over time and space. Drawing on the experiences of smallholder farmers (n = 30) from Navrongo using qualitative interviews and focus group discussions, the paper explores how social capital networks shape mechanized service access and utilization among farmers and highlights the historical background to tractor-based mechanized farming in northern Ghana. Findings reveal how local farmers activate and operate in trustworthy social networks at the community level among themselves and externally with government agencies, traders and development partners to facilitate tractor access. The paper also finds that the withdrawal of government subsidies on agricultural services during structural adjustment in the 1980s created an avenue for private sector entry into the tractor service market. In recent times, the market is a blend of both public and private actors. Given the crucial role of social capital, this paper stresses that apart from economic factors, contemporary agricultural policy should build upon contextual sociocultural networks and the resources inherent in them.     

Food Price Bubbles and Government Intervention: Is China Different?

The last decade has witnessed different price trajectories in the international and Chinese agricultural commodity markets. This paper compares and contrasts these dynamic patterns between markets from the perspective of price bubbles. A newly developed right‐tailed unit root testing procedure is applied to detect price bubbles in the Chicago Board of Trade (CBOT) and Chinese agricultural futures market during the period 2005–14. Results show that Chinese markets experienced less prominent speculative bubbles than the international markets for its high self‐sufficiency commodities (wheat and corn), but not for low self‐sufficiency commodities (soybean). The difference in price behavior is attributed to differences in market intelligence, and to Chinese agricultural policies related to trade as well as domestic government policies. Besides, it discusses challenges to the sustainability of the stable price trajectory in Chinese markets. Au cours de la dernière décennie, les prix des produits agricoles sur les marchés chinois et international ont suivi des trajectoires variées. Dans le présent article, nous comparons les divers marchés sur le plan des bulles de prix des produits agricoles. Nous avons utilisé un nouveau test de racine unitaire qui exploite la queue de droite de la distribution de la statistique pour déceler les bulles de prix des produits agricoles sur le Chicago Board of Trade (CBOT) et sur les marchés à terme chinois au cours de la période 2005–14. Les résultats de notre étude montrent que les marchés chinois ont connu des bulles spéculatives moins prononcées que les marchés internationaux dans le cas des produits agricoles pour lesquels l'autosuffisance de la Chine est très élevée (le blé et le maïs), par rapport aux produits pour lesquels l'autosuffisance est faible (le soja). La différence sur le plan du comportement des prix est attribuable aux différences sur le plan de l'information commerciale ainsi qu'aux politiques agricoles chinoises en matière de commerce et à la politique intérieure du pays. Nous avons également examiné les défis par rapport à la durabilité d'une trajectoire de prix stables sur les marchés chinois.     

Comparing conventional and organic agriculture in Karnataka,India: Where and when can organic farming be sustainable?

Karnataka is one of the south-western Indian states where agrarian distress as a major problem. Crop yields have been stagnant in the last decade, and coupled with increased input costs, this has led to reduced incomes and debts. There is an urgent need to study options to improve the sustainability of farming systems in Karnataka. One adopted strategy to stabilize agriculture in the state is organic farming, which is less dependent on external inputs. In this paper, we assess the sustainability of conventional and organic farming practices using the model TechnoGIN. TechnoGIN calculates inputs and outputs of farming practices, allowing assessment of its impacts on economic and environmental indicators. Data on inputs and yields have been collected in two districts in 2009 from farms with conventional and organic cultivation at the same time. Additional data were collected from literature and experts. Next, the current situation was assessed and projections were made towards 2015 for two scenarios per village, using either conventional or organic practices.Modeling results show that for the study site situated in a dry region, Chitradurga, profits with organic farming are higher than in conventional farming, except for rotations that include onion. Input costs are lower resulting in lower financial risks with organic farming. Nutrient balances in organic agriculture were however found to be negative for all crop rotations indicating imbalanced supply of nutrients. This suggests it may not be possible to sustain current yields in the long term with current nutrient applications.In the second site situated in a transition zone with intensive cultivation of commercial crops, Mysore, yields and profits are similar in organic farming compared to those under conventional practice, except for commercial crops like cotton and coconut where the profits are lower. The debt risk in case of crop failure appears to be practically similar for both types of farming practices in Mysore. Nutrient balances are generally positive, indicating that NPK supplies are not the main yield limiting factor.It is concluded that organic farming can be a sustainable farming practice in Karnataka depending on regional conditions and the crops cultivated. Policies stimulating organic farming should therefore consider the regional differences and farmer's preferences.     

Do farmer,household and farm characteristics influence the adoption of sustainable practices? The evidence from the Republic of Moldova

Drought represents the main constraint on agricultural production in the Republic of Moldova indicating the need to shift from conventional agricultural practices to more sustainable ones. To provide a more comprehensive understanding of the determinants and barriers influencing the adoption of conservation agriculture practices, an analytic framework combining both binary and ordered probit models addressing the potential endogeneity of variables was applied. A survey was conducted among 234 smallholders in three districts in the Republic of Moldova from July to September 2016. The results indicated that the adoption of sustainable practices by small-scale farmers is influenced predominantly by farmer characteristics and by their perception of risk. The findings of this research confirmed that households with lower access to financial resources are less likely to adopt these practices. Consequently, the provision of alternative financing is needed in the promotion of sustainable agriculture practices.     

Who determines the trade-offs between agricultural production and environmental quality? An evolutionary perspective from rural eastern China

We explore the evolutionary nature of interactions between government policy, farm decision-making and ecosystem services in Shucheng County, Anhui Province, 1950–2015. Analyses of ecological, social and economic trends are complemented by interviews with local farmers. Since the Household Responsibility System started in 1980, there has been a trade-off between rising levels of provisioning services and falling levels of regulating services with evidence that critical thresholds have been passed for water quality. Using a Framework for Ecosystem Service Provision, we argue that farmers have acted only as ecosystem service providers and have not influenced the policies that have brought about the trade-offs. Over the period, ecological degradation is best described as an example of ‘creeping normalcy’ where cumulative conventional actions by individual farmers produce unsustainable losses in regulating services. The Chinese government should act to balance the various ecosystem services through valuation and national policy. In this respect, there is a need for agencies that can provide place-based advice to farmers that will allow them to maintain productivity levels while pursuing restorative actions. Even with new policies, the draw of urban employment, high production costs and an ageing population threaten the viability of farming in these marginal agricultural areas.     

Ride the trend: Is there spread momentum profit in the US commodity markets?

Some previous researchers have argued that trading strategies based on calendar spread time series momentum (STSM) can deliver significant returns (Szymanowska et al. 2014; Boons and Prado 2019), which, if true, is at odds with the efficient market hypothesis. These arguments however, do not exclude the unrealisable futures contract roll yield and are also affected by other empirical and statistical issues that may lead to misleading results. With more than 30 years of data, we investigate STSM in 22 US commodity futures markets. First, we assess whether past spread returns can predict future returns, a necessary condition for the existence of momentum. We find predictability to be very weak after correcting for the issues affecting prior research. Second, we implement STSM-based investment strategies. We compare STSM profits for individual markets and portfolios to profits generated by a simple long-only benchmark strategy that does not require any predictability. STSM does not generate returns statistically different from the benchmark trading strategy, with both strategies generating very low or negative returns. For the momentum to outperform the benchmark strategy, predictability should be three times larger than observed from real data, but would entail substantial downside risk. In sum, the empirical evidence indicates that returns from STSM-type strategies are illusive for the commodities and period studied. Our results strongly suggest that inclusion of unrealisable roll yield generates the illusion of profitable STSM trading strategies in previous research.