Distributive leakages of agricultural support: some empirical evidence

The paper evaluates the transfer efficiency of the Austrian bread grain policy taking into account distributive leakages, i.e. how much of the transfers officially intended to support farm income are finally realised in the upstream and downstream industries. Gardner's [Am. J. Agric. Econ. 65 (1983) 225] well‐known measure of average transfer efficiency (ATE) is augmented for the case of more than two social groups and computer‐intensive simulation procedures are utilised to deal with parameter uncertainty.     

Processing Technology,Market Power and Price Transmission

This paper focuses on the extent to which price changes occurring at the farm-level are transmitted to the retail sector. A price transmission elasticity is derived which is shown to depend on the degree of market power in the food industry and the nature of the food industry's processing technology. The offsetting role of the processing technology and market power in determining the extent of price transmission are highlighted. A case-study reports values for the price transmission elasticity for the US beef and pork sectors.     

TESTING THE COMPETITIVENESS OF FOOD PRICE SPREADS

This paper develops and illustrates a test of the competitiveness of food price spreads. The test does not require information on the structure of the food industry or estimation of conjectural variations, but rather the prices of the intermediate inputs used to produce the raw farm product and the prices of the intermediate inputs that are combined with the raw farm product to produce the final consumer good. The test is applied to the US farm/wholesale beef market.     

Assessing CAP Reform: Sensitivity of Modelling Decoupled Policies

The European Union reformed farm policy in June 2003 towards the decoupling of farm income support instruments. Available impact studies find that this reform reduces production incentives substantially for beef and to a lesser extent for arable crops. However, these studies assume that the previous reform, under Agenda 2000, already decoupled arable crop direct payments to a considerable extent, while beef premiums were linked more closely to production. Our main objective in this paper is to test the sensitivity of these results to this questionable modelling of Agenda 2000 direct payments, which neglects eligibility rules and land market imperfections. Our analysis reveals that the effects of the reform on both arable crop and beef production are always negative, however the Agenda 2000 direct payments are modelled. On the other hand, we show that, when the eligibility rules and land market imperfections are acknowledged, the production reducing effects may be much larger for arable crops than for beef. Policy implications of these results are noted.     

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.     

Do subsidies cause a less competitive milk market in China?

After 2008, China dairy industry has experienced a consolidation supported by the government mainly for the reason of food safety. Subsidies are one of the tools to shape a concentrated market with goals of reducing regulation cost and accomplishing quality control. This gives a serious concern that subsidies would generate a less competitive dairy industry. We construct a parametric model and use the firm‐level panel data, specifically the top eight dairy firms, to test if government subsidies strengthen the market power in the dairy industry. Our empirical results indicate government subsidies have a negative impact on the Lerner index for the top privately owned firms, but no significant effect on state‐controlled ones after controlling for advertising, time trend, and proprietorship. It is possible that the subsidies give more room for private firms to increase the scale or suppress the price, which eventually reduces the market power and benefits dairy customers in the downstream.     

Technical and scale efficiency of crop and livestock farms in Poland: does specialization matter?

The technical and scale efficiency of Polish farms is analyzed using data envelopment analysis. Efficiency differences are measured according to farm specialization, in crop or livestock, at two points in time during transition, 1996 and 2000. The efficiency results are reviewed in light of confidence intervals provided by bootstrapping. Livestock farms are found to be, on average, more technically and scale efficient than crop farms. Scale efficiency is high for both specializations. Technical inefficiency appears mostly to be due to “pure technical” rather than “scale” inefficiency, and thus attributable to inefficient management practices. The evidence suggests that the low‐educational attainment of people engaged in agriculture is one important reason for these inefficient practices. In 2000, 64% of livestock farms and 86% of crop farms were operating under increasing returns to scale. Improvements in the land lease legislation and changes to the policy support to farmers' pensions could stimulate the land market and remove the incentives to keep a fragmented operational structure.     

Transactional framework of sharecropping: empirical evidence

Chew [Chew. Tek-Ann 1991 Share contracts in Malaysian rubber smallholdings. Land Econ., 67: 85–98; Chew, Tek-Ann, 1993. The Transactional framework of sharecropping: further implications. Can. J. Agric. Econ., 41: 209–221.] proposed a transactional framework of sharecropping that accommodates both the Marshallian and the Cheungian equilibria. An important conclusion arising thereof is the hypothesis that Cheung's sharecropping equilibrium is the rarity while the Marshallian equilibrium is the norm. In this paper, we collated some recent evidences to verify this hypothesis. The evidences support the Marshallian equilibrium, thereby providing indirect support for the transactional framework of sharecropping.     

Deprived land-use intensification in shifting cultivation: the population pressure hypothesis revisited

This article provides a theoretical framework, based on optimal control theory, to analyze farm households' land‐use intensification decisions in forest‐based shifting cultivation (slash‐and‐burn) agroecosystems. The main results from the analysis generally coincide with the “Population Pressure Hypothesis” (PPH) as an important driver of soil degradation due to the so‐called “fallow crisis” or “deprived land‐use intensification” in shifting cultivation. However, the model also shows, from a supply perspective, that such a vicious circle of lower yields and greater forest land clearing may be avoided when the production elasticity of on‐farm labor outweighs the elasticity of substitution between farm labor and soil fertility. Furthermore, using data from shifting cultivating households from Yucatán, Mexico, we calibrate the effect of changes in population density. The numerical analysis suggests that by contrast to better‐off households, when population density increases, poorer shifting cultivating households' optimal labor allocation strategy is to further extensify land use by clearing more forest in the village common property land, or ejido land.     

Testing for Processor Market Power in the Markets for Cattle and Hogs in Canada

Deviations of livestock input prices from processor marginal value product are usually interpreted as an indication of the application of market power by the meat packing industry. However, market power depends on economic conditions that can influence the behavior of meat packers in the market for cattle and hogs. An industry-level translog profit function is applied to data on the Canadian finished cattle and hog markets and industry-wide oligopsony market power functions are estimated. The estimates suggest beef packers exercised a small but sustained amount of market power in the Canadian finished cattle market from 1978 to 1997. This is not the case in the market for hogs, which was competitive from 1960 to 1997. Application of market power in packers'purchases of farm animals decreased with increases in the utilization of domestic supply of slaughter animals and with increased levels of livestock exports. Livestock productivity increases appear to have significantly enhanced oligopsony power in packers'purchases of farm animals. The analysis suggests that beef processors may exert market power when cattle prices are relatively higher.     

Farm demand for quality potato seed in Indonesia

Seed is the one of the most costly components of potato production in developing countries. Since potato is a vegetatively reproduced crop, diseases such as viruses build up and yield declines as tubers are saved from one harvest for use as seed the next season. Replacing farm‐saved seed with clean seed is one means to increase yield, but information asymmetry between buyers and sellers on seed quality may restrict market supply of this input. In this article we develop a model of the seed market in which clean seed is treated as a capital good providing benefits over several seasons. To determine farm demand for clean seed, we conducted a survey of 182 potato farmers in the major potato growing areas of Indonesia to elicit their perceptions of seed quality from different sources, and derive farmers' “willingness‐to‐pay” for quality potato seed. Results indicate that the effects of information asymmetry on seed supply may be partially offset by the “reputation” of specialized seed producers. Nevertheless, marginal returns to disease‐free seed appear to significantly exceed marginal costs, indicating that improving supply of quality seed will contribute strongly to productivity growth in potato. We discuss several policy options to encourage supply and utilization of quality potato seed.     

Time-varying Armington elasticity and country-of-origin bias: from the dynamic perspective of the Japanese demand for beef imports

Elasticities of substitution, often called Armington elasticities, reflect incomplete substitutability because of perceived product characteristics. This study divides the determinants of the Japanese demand for beef imports into two factors: (i) substitution elasticity and (ii) country-of-origin bias, and demonstrate how these measurements are associated with trade policy and food scare events. The Japanese beef industry serves as a case study to evaluate the multifold impact of import liberalisation and a series of bovine spongiform encephalopathy (BSE) outbreaks. A time-varying parameter model is used to shed light on the dynamic effects of the import liberalisation and BSE outbreaks on the measurements. The estimation results reveal that the estimated substitutability and country-of-origin bias are very sensitive to the BSE cases, but not to the process of trade liberalisation. The results also confirm that as a result of the BSE outbreaks, the major factor of the Japanese demand for beef imports has changed from relative prices to the country-of-origin effect, thereby emphasising the importance of a traceability system and promotional activities, which would help in the formation of the country-of-origin effect.     

GENERIC PROMOTION OF BEEF: MEASURING THE IMPACT OF THE US BEEF CHECKOFF

Generic promotions of commodities are growing in importance. In the US, commodity industry assessments or checkoffs (i.e. a per unit levy or tax) are used to underwrite domestic and international promotions by commodity groups. The US beef checkoff is one of the largest of these new national commodity programmes. Evaluation of the economic impact of the beef promotion is an essential part of the beef checkoff. A model for evaluating the US beef programmes is estimated and the methodology is applicable to other commodity models that include advertising and promotion expenditures. The beef analysis shows a positive and significant return to the beef industry, with an average of approximately $5 for each $1 invested for the quarters 1987:1 through 1991:2.     

Agricultural commercialization of Karen Hill tribes in northern Thailand

Based on a random sample of 240 farm households in Chiang Mai province, Thailand, this study shows that—contrary to widespread belief—Karen farm households are well-integrated into markets. Average levels of market integration are 31% for gross farm output, 35% for variable inputs, 49% for food consumption, and 80% for net family income. By estimating a two-stage least squares (2SLS) regression model, this study finds that integration into output markets is positively associated with a diversification of land use away from rice monoculture, more intense contact with nearby urban centers, and a greater number of roads connecting the village to the outside world. Controlling for these factors, the distance to urban centers does not impede market integration; distant villages are equally well integrated into output markets. The study further finds that integration into output markets improves farm productivity and net per capita income. Concerns about market integration are discussed. Results have implications for Thai policy makers who have recently placed increasing emphasis on the concept of "sufficiency economy" in order to promote the well-being of rural people.     

Soil quality and fertilizer use rates among smallholder farmers in western Kenya

Studies of fertilizer use in sub-Saharan Africa have been dominated by analyses of economic and market factors having to do with infrastructure, institutions, and incentives that prevent or foster increased fertilizer demand, largely ignoring how soil fertility status conditions farmer demand for fertilizer. We apply a switching regression model to data from 260 farm households in western Kenya in order to allow for the possibility of discontinuities in fertilizer demand based on a soil carbon content (SCC) threshold. We find that the usual factors reflecting liquidity and quasi-fixed inputs are important on high-SCC plots but not on those with poorer soils. External inputs become less effective on soils with low SCC, hence the discernible shift in behaviors across soil quality regimes. For many farmers, improved fertilizer market conditions alone may be insufficient to stimulate increased fertilizer use without complementary improvements in the biophysical conditions that affect conditional factor demand.     

Finding optimal price risk management instruments: the case of the Spanish potato sector

This article offers a comprehensive analysis of the problem of choosing between alternative market risk management instruments. We model farmers' behavior to optimize the certainty equivalent, formulated by a mean–variance model, by combining instruments with and without basis risk. Results are expressed as the demands for hedging with futures, forward contracts and insurance. Theoretical results are applied to a selection of Spanish producers of fresh potatoes, a sector that is exposed to significant market risks. Amsterdam's Euronext provides potato futures prices, and the recently launched revenue insurance in Spain provides the example for price insurance. Three conclusions summarize the article's main findings. First, we show that Spanish potato revenue insurance subsidies are a factor that determines the instrument rankings and choice. Second, the efficiency of insurance subsidies is generally low. Finally, the Amsterdam potato futures market does not provide a cost‐effective means to manage price risks for Spanish fresh potato growers.     

ATTITUDES TOWARDS FARM DIVERSIFICATION: RESULTS FROM A SURVEY OF DEVON FARMS

Evidence from a survey of farmers' reactions to milk quotas suggests that there remains a fundamental divide between policymakers' views of the future farm and those of the farmers themselves. This paper examines this dichotomy in the context of one important milk-producing county, Devon. Here an emphasis at County Council level on non-agricultural diversification is found to contrast with the actions and intentions of sampled farmers. These favour instead an increase in farm self-sufficiency and an exploration of mainstream farming options, particularly an increase in beef and sheep enterprises.     

PARTICIPATION OF FARM OWNERS IN FARM AND OFF-FARM WORK INCLUDING THE OPTION OF FULL-TIME OFF-FARM WORK

The option of working full-time off the farm is generally neglected in farmers' time allocation studies. In this paper, a generalised multinomial logit model, in which the choices are working only on the farm, allocating the time between farm and off-farm work, or working only off-farm, is estimated using Israeli data. The results show that the explanatory variables have significantly different effects on utility for off-farm workers who also work on the farm versus those who do not. There seem to be incentives to work full time rather than part time off the farm. These conclusions cannot be reached if farm owners who do not work on the farm are excluded from the estimation. The conclusions imply that policy intended to encourage pluriactivity could instead result in increased specialisation in full-time farm work or full-time off-farm work if it does not target the right incentives.     

Differential uncertainties and risk attitudes between conventional and organic producers: the case of Spanish arable crop farmers

The growing importance of economic factors in farmers' decisions to go organic has raised interest in characterizing the economic behavior of organic versus conventional farms. In general, published analyses so far have not considered differential uncertainties, abilities to control production risk, and farmers' risk preferences between conventional and organic practices when comparing these techniques. Our article attempts to assess this issue. We use a model of farmer decision under risk to analyze the differential values between organic and conventional Spanish arable crop farms and to assess the incentives for adoption of organic practices. Results show that organic and conventional farms do have different production risks as well as different aversions to risk. Organic price premiums and subsidies are found to be powerful instruments to motivate adoption of organic techniques.     

我国家庭农场发展现状及其对策研究

家庭农场是在我国农村现有基础上建立的,是新型的农业生产主体,是实行农业现代化的金钥匙。家庭农场的出现,既增加农民的收入,又可以实现农业生产的产业化。文章运用文献分析和实地调研相结合的研究方法,分析了当前我国家庭农场的发展现状,即我国家庭农场呈现出经营规模不同、经营品种不同、经营效益较好、具有市场竞争力等明显特征。家庭农场的发展面临大好机遇,但是也存在土地产权认识不明晰、资金短缺、劳动力缺乏等瓶颈问题。并提出明确家庭农场认定标准、引导土地向家庭农场流转、农民的技术培训、完善农业保险、政府给予一定的资金政策等建议,旨在为各地区制定发展家庭农场政策提供参考。