Local compensation payments for agri-environmental externalities: a panel data analysis of bargaining outcomes

We analyse local compensation payments made to farmers for providinglandscape amenities in Alpine tourist communities. These paymentsresult from political bargaining at the municipal level. Paneldata estimation shows that the probability of introducing compensationpayments depends positively on the benefits of landscape amenities.Although no impact of service provision cost is found, transactioncosts at different levels of the bargaining process reduce theprobability of payments. Compensation payments mainly occurin communities where the provision of agricultural landscapeservices is perceived as relatively low and the diversity ofthe countryside seems to be endangered. We argue that municipalcompensation payments are an important supplement to nationaland European Union policy measures in support of less-favouredareas.     

Governing by models: Exploring the technopolitics of the (in)visilibities of land

Achieving food security at a global scale while protecting the environment, as envisioned in the Sustainable Development Goals, will require a complex process of collaboration and the integration of analyses at multiple scales. Agricultural and land use models are increasingly being used to bridge the global/local divide, particularly as a means to envision future land access, use and management in different agricultural production systems. This special issue contributes to our understanding of global modeling, governance and land use change. Specifically, it provides insights into the question of: how do the ways of knowing and governing affect the politics of environmental protection and agriculture? The papers in this special issue bring reflexive questions of knowledge production, public policy and civic engagement into the epistemic spaces of scientific and technological development, both as a means to improve the way we model and to understand the implications of governing by models.     

African Agricultural Development: Lessons and Challenges

This paper reviews what has been learned from experiences of African agriculture and hence what policy lessons may be. Views of African agriculture over the last 130 years have changed from optimism to pessimism and at least halfway back again as the performance of the sector has fluctuated. Fortunately it seems the deep pessimism about agricultural prospects expressed in the 1980s and 1990s has receded. The performance of African agriculture since 1990 suggests that neither those who doubt that any significant advances are taking place, nor those who see advances in some remarkable but perhaps isolated cases of rapid transformation of farming and agricultural supply chains, have sufficient evidence – either from national data or small‐scale studies – to support their positions. Hence policy has to rely largely on general principles and historic lessons, rather than more clearly proven propositions. Policy debates over African agricultural development may sharply divide on some topics, but there is little debate over the importance of basic conditions for agricultural development of an enabling investment climate and the provision of rural public goods. Beyond these basics, the challenge is to remedy the failings of markets that deny most smallholders access to inputs, financial services and insurance. Here opinion divides between whether to return to public provision, as with fertiliser subsidies, or whether private and collective institutional innovations will be sufficient. Recent initiatives to test and scale up the latter look promising, but most have yet to be evaluated. If agricultural development is first and foremost about establishing the basic conditions for growth, then most countries in Africa may be better placed than they have been in the past. Given the many examples that show African smallholders investing and innovating when they have the chance, then there are reasons to hope that the modest growth of production and productivity seen in the last two decades may accelerate in the future – thereby allowing African countries to make the transition from agrarian to urban economies.     

Risk pooling cooperative games in contract farming

Contract farming can be an effective measure to deal with agricultural production risks. This study provides a two‐stage stochastic programming model to analyze farmers’ cooperation in the context of contract farming under uncertainty. It provides a fair cost allocation policy for a coalition of farmers using a stochastic linear duality approach. A fair cost allocation implies that no subset of farmers has an incentive to leave the coalition. Thus, a fair allocation policy ensures the stability of a coalition. Meanwhile, the risk pooling game is shown to have population monotonicity, which means that, every time a coalition adds a new member, each farmer within the coalition will incur a smaller cost. Hence, the population monotonicity gives an incentive for coalition expansion. Our results not only provide a simple way to design fair cost allocation policies for collaboration strategies in contract farming, but also play an important role in the sustainable development of farmers’ coalitions.     

Judging agricultural policies: a survey

This survey provides a structured picture of 40 years of literature which uses welfare economic tools to judge agricultural policy. Challenges and developments of normative agricultural policy analysis are discussed in an easily accessible graphical framework. It is shown how the literature has gone from examining a very small discrete set of simple policies to a much broader (often continuous) set of policies that combine policy instruments simultaneously. The importance of the Pareto criterion, used to explore the limits of how government can affect welfare, is revealed. Moreover, given the importance of the objective of income redistribution in agricultural policy, agricultural economists have often departed from the purely efficiency‐oriented tradition in economics. It is shown that they have tried to incorporate equity considerations by either adding these criteria as constraints to the social welfare function, or directly incorporating these criteria in the functional form of the social welfare function.     

Agriculture's 'multifunctionality' and the WTO

Are the agricultural policy reforms embodied in the Uruguay Round consistent with meeting domestic policy objectives such as providing adequate food security, environmental protection and viability of rural areas? This article examines the claim that agriculture deserves more price support and import protection than other sectors because of the non‐marketed externalities and public goods it produces jointly with marketable food and fibre (agriculture’s so‐called ‘multifunctionality’). Do these unrewarded positive externalities exceed the negative externalities from farming by more than the net positive externalities produced by other sectors? To what extent are those farmer‐produced spillovers under‐supplied, and what are the most efficient ways to boost their production to the socially optimal levels? The article concludes that there is little trade‐off required to meet domestic policy objectives on the one hand and agricultural protection reform objectives as embodied in WTO rules on the other.     

Performance Measurement of the Agricultural Marketing Cooperatives: The Gap between Theory and Practice

The performance of agricultural cooperatives depends on their business objectives, which are defined in different ways in the literature. We review the theoretical literature on the performance of agricultural marketing cooperatives. Studies can be divided into two classes, those that assume a single objective and those that assume multiple objectives. This classification integrates three views of the cooperatives: ( a ) vertical integration of firms, ( b ) independent enterprise, and ( c ) coalition of firms. Empirical studies on the financial performance of cooperatives are classified into two categories, studies based on the economic theory of the firm and studies that emphasize accounting techniques. Empirical studies have failed to address the cooperatives' objectives as represented by the theoretical literature on cooperative performance.     

Simulating land use changes under alternative policy scenarios for conservation of native forests in south-central Chile

In this study, we combined policy analysis with landscape change modeling to simulate outcomes of alternative forest conservation instruments proposed by opposing policy coalitions. In 1992, concern over rapid land conversion to timber plantations (Pinus radiata and Eucalyptus spp.) in Chile gave rise to a protracted policy process resulting in the 2008 Native Forest Law (NFL), which subsidizes reforestation and management with native forest. To date, however, NFL has had little impact on native forest conservation. To understand how the policy process that created the NFL shaped its outcomes, we employed the Dyna-CLUE modeling approach to simulate land use changes in south-central Chile from 1993 to 2007, based on 3 scenarios: (1) enactment of NFL in 1993 when the law was originally debated, and the different configurations of subsidies and regulations proposed in the NFL policy debate by (2) the industrial forestry coalition and (3) the forest conservation coalition. We observed no major difference in native forest loss between simulated outcomes of the industry-advocated policy and the actual NFL legislation. The conservation coalition’s policy scenario increased native forest area, primarily in shrub steppe areas, but also via conversion of pine plantations if incentive payments were large enough. However, NFL payments are inadequate to make native forest management a viable economic land use alternative to industrial pine plantations, which are also subsidized in Chile. Gains in native forest cover occurred mostly on lands under ancestral indigenous claims (unrelated to the discussion of the NFL). We conclude that the NFL, even if enacted in 1993, would have been ineffective in preventing native forest loss, because tree plantations are more profitable and NFL regulations were weakened by the industrial coalition that opposed—and strongly shaped—the final legislation. Effective incentives for protecting early-successional forests and shrublands are needed to mitigate further losses and foster recovery of Chile’s native forests.     

Why do we need to integrate farmer decision making and wildlife models for policy evaluation?

Environmental and agricultural policy instruments cause changes in land-use which in turn affect habitat quality and availability for a range of species. These policies often have wildlife or biodiversity goals, but in many cases they are ineffective. The low effectiveness and the emergence of unwanted side effects of environmental and agricultural policies are caused by over-simplistic assumptions in the design of policy instruments as well as difficulties with predicting behaviours of policy subjects. When considering wildlife in agricultural landscapes, policy's performance depends both on human (farmers) actions, which the policies aim to affect, and wildlife responses to land-use and management changes imposed by farmers. Thus, in order to design effective agri-environmental policies, detailed ex-ante assessments of both of these aspects are necessary. Due to the restrictive assumptions and technical limitations, traditional agricultural economic and ecological models fall short in terms of predictions of impacts of agri-environmental measures. The feedback situation between policy, human behaviour and ecological systems behaviour can confound these approaches, which do not take systems complexity into account. Therefore, a solution that integrates both feedback interactions and the differing scales at which these interactions take place is needed. For this, we suggest developing integrated policy assessment tools comprising of simulated farmer decision making, on-farm land-use and wildlife responses in the form of spatially explicit, dynamically connected agent-based models. Although complex and necessitating true inter-disciplinarity, these approaches have matured to the point where this endeavour is now feasible.     

Agriculture’s Inter‐industry Linkages,Aggregation Bias and Rural Policy Reforms

As agricultural policy reform and its effects have become increasingly territorialised, analyses that attempt to explain or predict impacts need to be both more localised and to identify spill‐over effects. Local and regional general equilibrium approaches have become increasingly popular because they can extend predictions of policy shocks obtainable from partial equilibrium sectoral models to identify the wider effects. However, agriculture is usually described as a single sector in input–output accounts, whereas policy shocks that affect constituent commodities with differential impacts will have inter‐industry effects that are different to those implied by average input–output coefficients. Regionalisation of aggregated input–output tables adds further to these difficulties. The objective of this study is to develop a practical method for dealing with these problems. It describes the theoretical basis of aggregation bias and shows how it can be measured, in two contrasting case study regions in the UK and Sweden. Having established that this is a significant issue, a simple but effective procedure is demonstrated, based on additional information on variable costs, which transforms policy shocks from a direct change in agricultural output to that transmitted to the suppliers of inputs. This method provides an impact close to that which could be calculated if the general equilibrium system had indeed been disaggregated, and supports use of this approach in impact studies where insufficient time or funding are available for complete disaggregation of an agricultural sector’s regional accounts.     

Gender,control, and crop choice in northern Mozambique

Women play an important role in the agricultural production process in developing countries, yet their role in making decisions about what to grow and implications for household welfare remains poorly understood. In this article, I study women's empowerment in northern Mozambique as it relates to agriculture, considering in particular the factors associated with women managing the plots that they nominally control. Women control about 30% of the plots in the data, but only manage about 70% of those plots. Using a unique panel data set, I find that women are more likely to manage plots when households have had historic access to off‐farm labor, typically completed by men. When women manage plots, they tend to grow crops with less complicated production techniques and are less likely to grow the main area cash crop. However, conditional on historic access to off‐farm labor their farm incomes are the same as among men.     

The estimation of agricultural policy effects on soil erosion—An application for the bio-economic model MODAM

As agricultural policies affect land use, they have effects on the amount of soil erosion in agricultural regions through changes of the economic conditions of agricultural production. Prices of inputs and outputs, regulations and incentives can change, forcing or encouraging farmers to adopt new crop rotations. This paper shows how a bio-economic model can be used to describe and estimate the effects of policies on agricultural production and the risk of soil erosion at the example of a region in North-Eastern Germany. The model uses both an assessment tool that is based on a fuzzy-logic approach for the estimation of soil erosion risk of cropping practices, and a linear programming model, that simulates farmers’ economic behaviour under the assumption of gross margin maximisation being the main goal of farmers’ actions.The analysed policy options were both a targeted and an untargeted incentive programme for reduced tillage, and a restriction option where high erosive crops are not allowed on high erodible field types. The results show that policy changes can have an impact on soil erosion. Furthermore, soil conservation policies are shown to have different levels of efficiency in terms of reduced soil erosion related to the costs of the policy. In the case of this study, a restriction option was more efficient than the incentive options. The results of such simulations can serve as a decision support for the development of soil conservation policies and help to foresee the effects of general changes of agricultural policies.     

The Crow Rate Issue: A Retrospective on the Contributions of the Agricultural Economics Profession in Canada

The Crow rate policy issue is finally being put to rest. It has been a major agricultural policy issue in Canada over the past 20 years, and agricultural economists should have had a great deal to contribute to the policy debate. The contribution of the profession is critically assessed. While much of the research undertaken was of high quality, the profession's aggregate contribution was much less than what might have been possible. A number of shortcomings of the research system are identified, and some lessons for researchers and those who fund research are provided.     

An empirical assessment of the value of irrigation water: the case study of Murrumbidgee catchment*

Evaluation of value of irrigation water is essential for supporting policy decision making relating to investments in the irrigation sector, efficient allocation of irrigation water and water pricing and for crafting policies to compare the variable impacts of water reform within and across sectors of the economy. This paper asks the question of how much an established irrigator would pay for water and at what price farmers planning to expand the area they have under irrigation would consider paying for the right to access water. An analytical framework is developed to estimate the net present value of both annual and perennial agricultural activities in the Murrumbidgee catchment. Using these estimates the total value of water used in Murrumbidgee catchment is estimated. An aggregate water supply curve is derived for the catchment from where water may be acquired from irrigators for environmental flows.     

Sustaining growth in agriculture: a quantitative review of agricultural research investments

Growth in agriculture depends on many things but one of the most important is investment in agricultural research. Decision making in the agricultural research policy area can only be aided by access to better information. This article overviews a recent endeavor to move policy dialogue beyond merely qualitative impressions towards a process that is underpinned with new and cogent data. The data used have been assembled at ISNAR in a manner designed to make comparisons both over time and between countries more valid than has been the case in the past. The comparisons thus possible reveal considerable diversity both between countries and between broad regional aggregations. Also illuminated here are issues related to the commodity orientation, capital and labor intensity, and size and scope of particular national programs.     

MARKETING BOARDS AND QUOTA POLICIES FOR CANADIAN FARM PRODUCTS: AN APPRAISAL OF PERFORMANCE*

Since the great economic Depression, Canadian farm operators have always emphasized the need to strengthen their bargaining position in the market place. Basically, farm operators believe that the individual farmer is in no position to bargain effectively in a product market with a few large firms.
Legislators have responded to the wishes of farm operators by enacting legislation which provides for the formation of compulsory marketing boards controlled by producers. An ever-increasing number of these boards are now in operation. The granting of exclusive powers to sell particular farm products, however, is one which involves the public interest and the public is, therefore, vitally interested.
This paper focuses attention on the exercise of the powers vested in these marketing boards through their use of quotas, and their limitations to entry of new producers into particular sectors of the agricultural industry. The paper indicates that there are some positive features to the quota policies pursued by marketing boards. Some economic security has been afforded farm operators with short-term stability engendered in particular sectors of agriculture. There are certain negative consequences of these quota policies, which affect the location of production and also impair the competitive strength of particular sectors of agriculture to which they are applied. They have also interfered with the most rational utilization of resources in associated industries. These aspects of the quota policies are, therefore, inconsistent with the public interest. The study outlines principles that should form the basis of a revitalized marketing policy that may be more consistent with the public interest.     

The Vanishing Free Market: The Formation and Spread of the British and US Food Regimes

In this paper, I compare the formation of food regimes during British and US hegemony, which were mirror-images in terms of the degree of free trade and state regulation as well as the direction of trade flow of grains. Many scholars recognize that the foundation for each regime was laid by the national policy and dominant political coalition in the world-economic hegemon, but my analysis pays particular attention to the divisions and coalitions within agriculture as forces that drove the shape of each regime. Though important agricultural divisions existed in each case, the political power of the resulting agricultural coalitions – and those coalitions' relations to the nation's dominant coalition – are central to understanding the formation and spread of each food regime.     

Donning Coase‐coloured glasses: a property rights view of natural resource economics*

Economic analysis of natural resource and environmental issues inappropriately places too much emphasis on Pigouvian externalities and too little on Coasean property rights and transaction costs. The crucial questions are who has what property rights and what are the transaction costs associated with these property rights. Asserting an externality implicitly assumes a set of property rights and hence a distribution of the social costs, but it is precisely a lack of property rights that allows decision makers to ignore social costs. By viewing natural resource and environmental problems through a Coasean lens, we better focus our attention on how property rights evolve, how they influence transaction costs, and how those transaction costs affect the potential for bargaining to minimise social costs.     

An Overview of the Evolution of Agricultural Cooperatives in Québec

Two agricultural cooperatives dominate in Québec, Coopérative fédérée and Agropur, with sales of 2.4 billion and 1.9 billion, respectively. Although they share similar traits, their evolution over the years has resulted in different business models. In turn, their business models have important implications in terms of their relationship with farmers' union, their sensitivity to policy changes and their approach to capital access problems. Nevertheless, the outlook for agricultural cooperatives in Quebec appears to be good, given the support that the Québec government intends to give them in appreciation of their stability and capability to promote regional development.     

The attitude of grassland farmers towards nature conservation and agri-environment measures—A survey-based analysis

Grasslands have a multi-layer protection function for nature, biodiversity and climate. These functions can be fostered by an adapted management on grassland farms. Promoting nature protection alongside agricultural production is an aim of European agricultural policy. However, a number of studies indicate that existing Agri-environment measures (AEM) are not as effective as assumed, mainly because they are not sufficiently used by farmers. We investigated the view of grassland farmers on nature conservation and on existing AEM in four distinct regions on a west to east gradient in the North German Plain. We conducted a survey on 82 grassland farms inquiring basic farm data and asking questions on general agricultural issues and nature protection. The results indicate that the majority of all respondents is generally interested in nature conservation and believes it to be of concern for every farmer. In contrast, only a minority of grassland farmers is using the existing AEM to the full extend on their own farm. By applying the concept of farming styles, we classified farmers into four groups, namely Traditionalist, Idealist, Modernist, and Yield Optimizer. These farming styles groups differ in farm and management parameters, general attitudes towards agricultural issues, farming objectives and economic success. We found that in our survey the farming styles groups differ in their attitude towards nature conservation. However, they do not differ in the adoption of AEM and have different reasons for not taking part. We state that for a better implementation of AEM into agricultural practice a better communication, which is adapted to the different ways that farmers manage their farm and think and feel, is needed. Consequently, AEM need to be revised as well.