On‐Farm Conservation of Rice Biodiversity in Nepal: A Simultaneous Estimation Approach

This paper presents an empirical case study about farmer management of rice genetic resources in two communities of Nepal, drawing on interdisciplinary, participatory research that involved farmers, rice geneticists and social scientists. The decision‐making process of farm households is modelled and estimated in order to provide information for the design of community‐based conservation programmes. A bivariate model with sample selection examines the simultaneous process of whether farmers decide to plant landraces or modern varieties, and whether the landraces they choose to plant constitute the genetic diversity of interest for future crop improvement. Findings show that the two landrace choices are affected by different social and economic factors, but in certain cases the decision processes are interrelated. Policies to promote the conservation of local rice diversity will need to take both processes into account.     

Interrelated labor decisions of farm couples: a censored response analysis of off‐farm work

Farm couples' labor market responses are partly the discrete choice of entering the off‐farm labor market and partly the continuous choice of off‐farm working hours, given entry. Such a setting is interesting when examining the increasing occurrence of multiple job‐holdings among farmers in Western economies. Most existing analyses of off‐farm labor supply only model the decisions of the farmer, not the joint decisions of the farm couple. This article presents a framework for handling such interrelated discrete/continuous choices, involving also farm production and household consumption. The derived two‐equation sub‐model for husband/wife's censored labor responses is estimated from a 10‐year Norwegian panel data for 342 farms. The results agree to some extent with earlier studies, but are more informative because of the longer panels—which allows a more extensive examination of latent heterogeneity and behavioral persistence—because it provides cross‐effects in the spouses' labor supplies. The results show some interesting differences between how the independent variables influence the labor supply of operator and spouse. This is most evident for the cross‐effects of education, children, and wage rate. Overall, the results strongly support applying a panel‐censoring model that accounts for latent heterogeneity in this context.     

Off‐farm employment and reasons for entering farming as determinants of production enterprise selection in US agriculture

In today’s agriculture, farmers consider off‐farm employment and lifestyle goals in complex ways to select production enterprises. Data from USDA’s Agricultural Resource Management Survey were used to examine how off‐farm employment and ‘reasons for entering farming’ influence production enterprise selection in US agriculture. A two‐stage analysis with a multivariate tobit model was used to examine the impact of off‐farm employment as influenced by government farm programme payments, reasons for entering farming, demographics and location on production enterprise selection. Results underscore the impacts of reasons for entering farming and off‐farm employment on production enterprise choice and provide implications for policy development. The study highlights the importance of government farm programme payments in production enterprise selection by US farmers.     

Eco‐efficiency of high‐yielding variety rice cultivation after accounting for on‐farm environmental damage as an undesirable output: an empirical analysis from Bangladesh

This study computes the eco‐efficiency of high‐yielding variety (HYV) rice production by including an on‐farm environmental damage index (OFEDI) as an undesirable output using data envelopment analysis. It then identifies its determinants by applying an interval regression procedure on a sample of 317 farmers from north‐western Bangladesh. Results reveal that the mean level of the OFEDI‐adjusted production efficiency (i.e. eco‐efficiency) is 89 per cent, whereas ignoring OFEDI adjustment (i.e. with OFEDI = 0) reduces the mean level of efficiency to 69 per cent, implying that the production of undesirable output or on‐farm environmental damage induces an efficiency loss of 20 per cent with significant differences across regions. The proportion of farmers’ income from HYV rice agriculture, land ownership, extension services and socio‐environmental living standard are the significant determinants of improving eco‐efficiency. Policy implications include investments in extension services and land reform measures to increase land ownership, which will synergistically improve eco‐efficiency of HYV rice production in Bangladesh.     

Designing Policy for Reducing the Off‐farm Effects of Soil Erosion Using Choice Experiments

Soil erosion produces both on‐site private costs and off‐site social costs, such as desertification, rural depopulation, siltation of waterways and reductions in biodiversity. To design efficient policies, land use planners and decision makers need information on the relative weights of changes in these consequences, since policy alternatives, such as different management restrictions, will have varying impacts on these consequences of erosion. The research presented here uses the choice experiment method to evaluate these relative weights, using a case study in the Alto Genil and Guadajoz watersheds in southern Spain. We find that reductions in desertification, protection of water quality, protection of biodiversity, the area covered by the scheme, and the number of rural jobs safeguarded are all significant determinants of preferences over alternative policy designs.     

Off‐Farm Work,Intensity of Government Payments,and Farm Exits: Evidence from a National Survey in the United States

The last three decades have witnessed the continued exit of households from primary agriculture in the United States, where the average annual gross exit rate has averaged 10% per year. Understanding exit behavior is one key to future farm structure, management of abandoned land, depopulation of rural areas, and agricultural policy, including government program payments. This study empirically estimates the determinants of exit decisions of farm households. Particular attention is given to the roles of intensity of government payments and off‐farm work decisions of farm couples in the exit decision. Using a large farm‐level survey and controlling for endogeneity, results indicate that farm households with reduced intensity of government payments are more likely to exit farming. Households where the operator spouse works off the farm are more likely to exit farming. Additionally, households with older farmers, with the farm operator and spouse raised on a farm, and households operating farms located in Northern Great Plains are more likely to exit farming.     

The Role of Non‐Use Values in Dairy Farmers’ Willingness to Accept a Farm Animal Welfare Programme

Choice experiments about a hypothetical farm animal welfare (FAW) programme were presented to a sample of randomly selected German dairy farmers. Based on the theory of social interactions, it was hypothesised that the probability of participating in the programme would increase with (i) the ease of implementing programme attributes on the farm, (ii) perceived use values such as increased milk yield, and (iii) stated levels of non‐use existence values derived from improved animal welfare conditions and extrinsically motivated non‐use values from enhanced prestige among relevant peer groups. It was found that non‐use existence values were negatively related to programme acceptance because relatively high personal standards may not be in line with the programme design and may make the programme seem unnecessary. In addition, the intention of enhancing public acceptance of dairy farming appeared to have an influence on some farmers’ willingness to accept the programme, which can be explained by the relevance of social interactions among peers in the context of farmers’ provision of FAW.     

Seasonal and Spatial Variations in Demand for and Elasticities of Fish Products in the United States: An Analysis Based on Market‐Level Scanner Data

Seasonally and spatially varying demand elasticities would provide important information to seafood producers and marketers as well as policy makers. We analyzed the effects of season and space on (i) demand (translation effects) and (ii) price as well as expenditure elasticities of demand (scaling effects) for 13 finfish species in the United States. The paper used market‐level scanner data for 52 U.S. markets. Results suggest that not only the quantity demanded, but also the demand elasticities vary across species, seasons, and geography; not only does the degree of competition among finfish products vary considerably over space, but substituting products themselves change. These results highlight the importance of studying consumer demand behavior at species level, across seasons and geography, particularly as it sheds important light on some important policy issues such as the potential substitution between catfish and tilapia in the U.S. markets.     

Assessing the Forecasting Performance of a Generic Bio‐Economic Farm Model Calibrated With Two Different PMP Variants

Using linear programming in bio‐economic farm modelling often results in overspecialised model solutions. The positive mathematical programming (PMP) approach guarantees exact calibration to base year data but the forecasting capacity of the model is affected by necessary but arbitrary assumptions imposed during calibration. In this article, a new PMP variant is presented which is based on less arbitrary assumptions that, from a theoretical point of view, are closer to the actual decision making of the farmer. The PMP variant is evaluated according to the predictions of the bio‐economic farm model, developed within the framework for integrated assessment of agricultural systems in Europe (SEAMLESS). The forecasting capacity of the model calibrated with the standard PMP approach and the alternative PMP variant, respectively, is tested in ex‐post experiments for the arable farm types of Flevoland (the Netherlands) and Midi‐Pyrenees (France). The results of the ex‐post experiments, in which we try to simulate farm responses in 2003 using a model calibrated to 1999 data, show that the alternative PMP variant improves the forecasting capacity of the model in all tested cases.     

Can Country‐of‐Origin Labeling Succeed as a Marketing Tool for Produce? Lessons from Three Case Studies

This paper draws on the theory of product differentiation in a trade context and uses three case studies to highlight the conditions necessary for a successful geographical‐origin branding strategy for farm produce in the United States. In so doing, the U.S. country‐of‐origin labeling (COOL) scheme as a branding strategy for produce is assessed. The paper argues that the use of geographic identifiers to achieve product differentiation is viable, but any claim that such differentiation will prove useful at the country level for farm produce seems likely to be misplaced. In order to raise prices, a key complement to branding is some restriction on the volume of product going out under the brand name. These restrictions may be accomplished by supply controls, quality controls, or entry barriers, but will not be available to all U.S. products currently hoping to gain from mandatory COOL. Le présent article s'appuie sur la théorie de la différenciation des produits dans un contexte commercial et utilise trois études de cas pour faire ressortir les conditions nécessaires pour réussir une stratégie de la marque distinctive selon l'origine géographique des produits agricoles aux États‐Unis. Nous avons examiné le programme états‐unien d'étiquetage du pays d'origine (COOL) comme stratégie de la marque distinctive. Le présent article soutient que l'utilisation d'identificateurs géographiques pour différencier les produits est viable, mais toute allégation voulant que ce genre de différenciation se révèle utile à l'échelle nationale pour les produits agricoles semble inappropriée. Pour hausser les prix, il faudrait, en plus d'utiliser la marque distinctive, imposer certaines restrictions quant au volume de produits emballés sous la marque du fabricant. Ces restrictions peuvent être imposées par le contrôle des approvisionnements, le contrôle de la qualité ou la mise en place de barrières à l'entrée, mais elles ne pourront toucher tous les produits états‐uniens qui espèrent actuellement tirer un gain du programme COOL obligatoire.     

Farm Level Supply of Short Rotation Woody Crops: Economic Assessment in the Long‐Term for Household Farming Systems

In this paper, we propose an analysis and modeling of farmers’ decision to convert a part of their annual crops area into woody crops: short rotation coppices (SRCs). Different criteria—technical, economic, and financial—are highlighted in the farmers’ decision to adopt this production. A farm‐level model is proposed and incorporates these decision criteria. The objective is to test several incentive scenarios to encourage risk‐averse cereal farmers to plant trees. A multiperiod model of investment is built and tests possible adoption by farmers based on financial and structural parameters and according to the outlook of agricultural markets. The simulations show that if the cash crop prices fluctuate in the future and if farmers are risk averse the strategy of on‐farm diversification toward woody crops under contractual arrangements could be relevant for farmers to mitigate the risks in the long run. Cet article présente une analyse et une modélisation de la décision d’un agriculteur céréalier qui souhaite convertir une partie de sa surface en grande culture en Taillis à Courte Rotation (TCR). Un modèle multi‐périodique d’investissement est construit et incorpore différents critères techniques, économiques et financiers qui entrent dans la décision d’adopter ces nouvelles cultures pérennes. Le modèle permet de tester le rôle de différents types de soutiens, proposés aujourd’hui dans le cadre de la Politique Agricole Commune européenne, permettant d’encourager les agriculteurs averses au risque à planter des arbres. Les simulations montrent que si les prix des grandes cultures annuelles fluctuent à l’avenir, si la plantation d’arbres est soutenue et si les agriculteurs sont averses au risque, la stratégie de se diversifier vers la plantation d’arbres à croissance rapide, sous contrat, peut permettre d’atténuer le risque à long terme.     

The Economic Impact of a Foot‐and‐Mouth Disease Outbreak for Ontario's Beef Sector

Biosecurity is an increasingly prominent concern to the Canadian agri‐food sector given heightened public awareness of animal welfare and the continued importance of trade. Due to the potential for large‐scale animal depopulation and uncertain trade flow restrictions, the economic costs and animal welfare implications of disease outbreaks have prompted efforts to control their spread within and across trade boundaries. We build a partial equilibrium model of the beef supply chain in Ontario to examine the welfare impacts of a foot‐and‐mouth disease outbreak inside and outside the province. Somewhat surprisingly, economic impacts for Ontario are not dramatically different between an outbreak within the province versus an outbreak in western Canada: losses total $245 and $217 million, respectively. When the outbreak occurs outside Ontario and provincial zoning is recognized, losses total only $93 million. Restrictions on international and, inter‐ and intra‐provincial movement of livestock and beef products are the main driver of losses. A strength of our model is that we are able to disaggregate these impacts across the various market participants (i.e., producers, processors, retailers, consumers). Retailers and consumers incur little to no losses as imports from the United States easily fill shortages in supply. Production losses from livestock movement restrictions and depopulation are partially offset by higher prices, while processors bear the brunt of the losses due to reduced supply and higher livestock prices. La biosécurité revêt de plus en plus d'importance dans le secteur agroalimentaire canadien en raison de la sensibilisation accrue du public au bien‐être animal et de l'importance soutenue du commerce. Compte tenu de l’éventualité d'un dépeuplement animal à grande échelle et de mesures pouvant restreindre le flux des échanges commerciaux, le coût économique des éclosions de maladies et leurs répercussions sur le bien‐être animal ont stimulé les efforts afin de maîtriser leur propagation tant à l'intérieur qu’à l'extérieur des frontières commerciales. Dans la présente étude, nous avons élaboré un modèle d’équilibre partiel de la chaîne d'approvisionnement du b?uf en Ontario afin d'examiner les répercussions d'une éclosion de fièvre aphteuse à l'intérieur et à l'extérieur de la province. Étonnamment, que l’éclosion survienne en Ontario ou dans l'Ouest canadien, l'impact économique pour l'Ontario ne diffère pas considérablement : les pertes totales étant de 293 millions de dollars (M$) et de 267 M$ respectivement. Lorsque l’éclosion survient à l'extérieur de l'Ontario et que les zones de contrôle provinciales sont déterminées, les pertes totales s’élèvent à 27 M$ seulement. Les restrictions concernant le déplacement du bétail et des produits de b?uf entre pays, entre provinces et à l'intérieur d'une même province constituent les principaux facteurs entrainant des pertes. L'une des forces de notre modèle tient au fait que nous avons été en mesure de désagréger les impacts entre les différents acteurs dans le marché (producteurs, transformateurs, détaillants et consommateurs). Les détaillants et les consommateurs subissent peu ou pas de pertes étant donné que les importations en provenance des États‐Unis comblent facilement les pénuries de l'offre. Du côté des producteurs, les pertes causées par le déplacement et le dépeuplement du bétail sont en partie contrebalancées par des prix élevés, tandis que les transformateurs essuient les pertes les plus lourdes en raison d'une diminution de l'offre et du prix du bétail élevé.     

A Real Options Approach for the Investment Decisions of a Farm‐Based Anaerobic Digester

The profitability of anaerobic digesters (ADs) for Ontario dairy farmers are examined using real options under current and proposed government pricing policies and investment uncertainty. In the case of a renewable energy initiative such as an AD with large sunk costs and volatile returns, the value of deferring investment may be significant enough to offset the returns suggested by the net present value (NPV) approach. For a 150 cow herd, net revenues should be approximately $1.1 million before the AD is installed using the real options approach as compared to $0.5 million with the NPV approach. An AD is close to generating a positive NPV for a 600 cow herd if for either a 1% increase in the electrical price or decrease in the cost. However, farmers need not invest today and there is a value to delaying this decision from potential improvements in the technology that increase the efficiency and/or decrease operating costs of the AD. The real options analysis indicates that this option to delay investment has a value of approximately $300,000 for a typical Ontario dairy farm. Thus, either significant grant funding or higher feed‐in‐tariff rates are required to induce the increased adoption of AD technology in Ontario today even for the largest of dairy farms. Considering the probability of government support potentially ending, increases the value of investing today but a significant option value to defer still exists.     

Land rents as a criterion for regionalization—The case of wheat growing in Croatia

The paper explores and tests one of the contemporary principles of economic regionalization of agriculture by using differential land rents in wheat production as a model. The analysis is based upon the assumption that differential rents could serve as a valid principle for regional planning, particularly differential rent I. On the basis of the food self-sufficiency principle declared by the Rome Declaration on World Food Security, the model assesses the economic justification of the Croatian wheat incentives system in relation to wheat production potentials in the counties, starting from those with high potential (the most favourable agroecological conditions for wheat production) towards the counties with low potential, to the level of self-sufficiency as a long-term Croatian strategic vision.The model shows that Croatia can meet its requirements for industrial wheat processing at the level of cumulative farmland areas of three counties, while total consumption can be covered by production of eight counties. This model compromises the fundamental principle of regional economics of wheat production, because up to 2003 incentives were given for 78,000 ha more than what was economically justified for wheat production intended for industrial processing, i.e. for 19,000 ha for total wheat demand. But, wheat production is practised all over Croatia—in all agricultural regions because of tradition on the one side and crop rotation requirements on the other side. This conclusion points to an uneconomic allocation of budget funds for wheat incentives to the counties, whose output results do not justify the incentives. The current subsidy model stimulates production by applying the criterion of a minimum three-hectare area required for wheat incentives. Consequently, a part of wheat production is excluded from the incentive system in the counties with high potential farmland, i.e. in the counties collecting a differential land rent for wheat production, which is uneconomical in terms of macroeconomics.Even though the model featured in this paper exemplifies wheat production in this particular situation, it can be easily used to evaluate the efficiency of incentives for all the crops included in the incentive system, while applying the standards of economics and agricultural regionalization. It can also be used to determine subsequent, more economical distribution of production incentives by channelling uneconomically allocated budget funds into implementation of other agricultural policies and measures.     

Determinants of Voter Support for a Five‐Year Ban on the Cultivation of Genetically Modified Crops in Switzerland

While much effort has been devoted to estimating market premiums for non‐genetically modified (GM) food, the results of such research are largely silent about the preferences for the public good aspects, or externalities, of GM food production. For public goods, the closest substitute of private consumption decisions is voting on referenda. In November 2005, 55.7% of 2 million Swiss voters approved a five‐year moratorium (ban) on the commercial cultivation of GM plants in Switzerland. The present study examines how individual voting decisions were determined by: (i) socioeconomic characteristics; (ii) political preference/ideology; and (iii) agreement with a series of arguments in favour and against the use of GM plants in Swiss agriculture. The analysis is based on the data of the regular voter survey undertaken after the national‐level voting in Switzerland. The results suggest that current concerns about the use of genetically engineered plants in agriculture may not automatically decrease with higher levels of education/knowledge and generational change. Furthermore, analysis of voter motives suggests that public support for a ban on GM crops may be even larger in other countries, where industrial interests in crop biotechnology are less pronounced.     

“Resistance is futile”: estimating the costs of managing herbicide resistance as a first‐order Markov process and the case of U.S. upland cotton producers

A 2012 survey of upland U.S. cotton producers was analyzed to determine the factors contributing to changes in weed management costs (WMCs) after the identification of herbicide‐resistant weeds. An ordered probit regression estimated changes in WMC as a first‐order Markov process. The most important determinants of post‐resistance cost increases were initial WMCs, adoption of labor‐intensive remedial practices, and wick application of herbicides. Cultivation and mechanical/chemical‐intensive practices did not increase WMCs. Post‐resistance changes in WMC ranged between $85 and $138 ha^?1, depending on the practices adopted. WMCs increased by $88 ha^?1 when cost‐neutral practices were adopted. The in‐sample aggregate costs of managing herbicide resistance ranged between $25 and $53 million, depending on the types of adopted practices.     

Value elicitation for multiple quantities of a quasi‐public good using open ended choice experiments and uniform price auctions

Choice experiments and experimental auctions have become popular mechanisms for estimating willingness to pay (WTP). However, these methods have primarily been used for estimating WTP for single units of goods. We analyze the results from experimental auctions and choice experiments in the context of multiple quantities of a quasi‐public good (animal welfare product). We show that the use of WTP values for a single unit of a product, a common practice in experimental valuation literature, can result in underestimation of aggregate demand. We use and compare open ended choice experiments (OECE), second price Vickrey auctions, and random Nth price auctions as mechanisms for valuing WTP. Our results also suggest that individual level demand estimates from OECE are less elastic than demand estimates from uniform price auctions.     

Promoting the role of farmer‐based organizations for value chain integration: the tension between a program's targeting and an organization's investment strategy

We use new data on 500 Farmer‐Based Organizations (FBOs) in Ghana and regression analysis to reveal determinants of collective investments and the case of the Millennium Development Authority's (MiDA) agricultural program in Ghana to demonstrate that development programs offering hard incentives may be counterproductive in promoting collective action. We show that when a program sets criteria for participation and offers in‐cash and in‐kind support to selected FBOs, it may promote rent‐seeking and crowd out equity capital formation. This is so because FBOs may have formed for the sole purpose of benefitting from incentives offered by the program and thus lack an economic justification, which is an important condition for progression through the cooperative life cycle. Further, by setting stringent participation criteria, the program may end up selecting younger organizations while it is the more consolidated organizations that are able to connect to business development services (BDS) and engage in more offensive collective action.