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.     

Expectations,supply response,and marketing boards: An example from Kenya

Whether farmers form price expectations adaptively or in a forward-looking manner has implications for supply response analysis and for the implementation of agricultural policy reform. This paper examines the formation of price expectations by Kenyan export-crop farmers who market their produce through a monopsonistic parastatal. The analysis allows for relaxation of the small-country assumption within a rational expectations framework. Production behavior is consistent with expectations of future prices based on indicators of aggregate supply and of the marketing board's purchasing capacity. The finding that price forecasts may be formed using information other than previous price levels implies that marketing reforms that raise prices may not raise the relevant price expectations. To elicit a positive supply response, market reforms should be sensitive to farmers' interpretation of institutional signals as well as previous prices.     

Are we overestimating the negative impact of higher food prices? Evidence from Ghana

Most studies of the welfare impact of higher food prices adopt Deaton's approach, based on the first‐order effect of prices changes using income and expenditure survey data. This paper explores the impact of higher maize and food prices in Ghana and considers the sensitivity of results to changes in several assumptions. If second‐order effects are included, incorporating household response to price changes, the welfare impact of food price increases is more positive, but only modestly so. However, if we assume that marketing margins are constant in real terms rather than proportional to prices, the welfare impact is substantially more positive. These findings highlight the need for more research on the behavior of marketing margins under volatile prices.     

Measurement and Testing for Equality of Foreign Price and Consumer Price Index Transmission in Russia

This paper tests for segmentation of retail meat markets in Russia before and after the financial crisis of 1998. Using monthly prices of pork and beef in 80 regions of Russia from 1994 to 1999, we measure the short-run response of regional prices to changes in foreign prices and domestic inflation. We find that changes in both foreign prices and domestic inflation have distinct impacts on the prices of these commodities in different Russian cities, indicating that the markets are segmented in the short run. An analysis of the effect of the financial crisis shows that the response to the crisis was mixed, with some regions showing more evidence of segmentation than others.     

Price supply response of vegetable growers in the Sultanate of Oman

Information on supply price elasticities has been acknowledged as being very important for decision makers at the macro and micro levels. This paper presents an empirical investigation of vegetable growers' responses to prices in Oman. It develops a single supply response function incorporating adaptive expectation model for prices. Results indicate that growers adjust relatively fast to changes in expected prices. However, these adjustments tire rather low for some crop in the short-and long-run. Growers' production decisions have also shown a significant response to prices of other products competing for farm space and other production resources. These results will support efforts aimed at market development and crop enhancement programs.     

The Malawi agricultural input subsidy programme: 2005/06 to 2008/09

Malawi's implementation of a large-scale agricultural input subsidy programme has attracted significant international interest. This paper reviews the programme from 2005/06 to 2008/09. Nationwide disbursement of heavily subsidized fertilizers and seed to large numbers of beneficiaries represents a significant logistical achievement and substantially increased national maize production and productivity, contributing to increased food availability, higher real wages, wider economic growth and poverty reduction. However, the latter years of the programme have been accompanied by high international fertilizer prices and costs and high maize prices, the latter undermining the programme's food security, poverty reduction and growth benefits for many poor Malawian farmers relying on purchased maize for substantial amounts of their staple food requirements. Estimated economic returns to the programme have been satisfactory, given other programme benefits not captured in cost—benefit analysis. With substantial reductions in both prices and subsidized volumes of fertilizers in subsequent years, there is considerable scope for building on achievements to raise programme effectiveness, efficiency and benefits. Any application of Malawi's subsidy experience to other countries should take into account the special characteristics of the Malawian maize economy and measures needed to raise programmes' effectiveness and efficiency and their contribution to sustainable development policies.     

Was China's Inflation in 2004 Led by an Agricultural Price Rise?

The escalation of agricultural prices starting from the end of 2003 raised concern about a new round of inflation in China. This paper assesses the impacts of China's 2003 agricultural output decline on agricultural prices and inflation using a general equilibrium model calibrated to actual data. The results indicate that the 5% decline in agricultural output can only explain 50% of observed changes in agricultural prices, 40% of observed changes in the consumer price index, and 20% of observed changes in the commodity price index. This suggests that China's 2003 agricultural output decline was not sufficient alone to produce the observed agricultural price increases and inflationary pressure in 2004. This position is counter to the conventional view that agricultural prices led to the 2004 inflation. L'escalade des prix agricoles qui a commencé vers la fin de 2003 a suscité des inquiétudes au sujet d'une nouvelle poussée inflationniste en Chine. Le présent article évalue l'impact de la diminution du rendement agricole de la Chine en 2003 sur les prix agricoles et l'inflation, à l'aide d'un modèle d'équilibre général calibréà partir de données réelles. D'après les résultats, la diminution de 5% du rendement agricole ne peut expliquer que 50% des changements observés dans les prix agricoles, que 40% des changements observés dans l'indice des prix à la consommation et que 20% des changements observés dans l'indice des prix des produits de base. Ces résultats autorisent à penser que la diminution du rendement agricole n'a pu à elle seule susciter la hausse observée des prix agricoles et la pression inflationniste en 2004. Cette position est contraire à l'explication classique selon laquelle les prix agricoles ont contribuéà l'inflation observée en 2004     

The effects of China's growth on the food prices and the food exports of other developing countries

This article explores the impacts of China's growth in the international markets of agricultural products along two dimensions: food price inflation and export growth in other developing countries. China's food imports of vegetable oils have grown dramatically over the last decade, linking China's economic growth to the recent increases in global food prices. If China is a source of global food price inflation, exporting countries will benefit whether they sell directly to China or not. These direct and indirect linkages are explored using a short‐run, partial‐equilibrium model of international trade in agricultural products in which consumer prices and trade costs are derived from bilateral trade flows. China's effects on food prices and exports are estimated by reducing Chinese food expenditures in 2007 by half, roughly China's level of expenditures in 1995. Results indicate that food prices as measured by CES price indexes in developing Asia, Africa, and Latin America would have been reduced by 1.27%, 0.32%, and 0.22%, respectively. China has been an important source of growth for exporters selling directly to China. There is no evidence of export growth due to an overall increase in food prices caused by China's growth.     

生猪价格的省域空间溢出效应及其动态关联分析——基于空间面板模型和DY分解

目的 分析生猪价格的省际空间溢出效应,并通过各省域间价格联动效应探究我国生猪价格体系的传导机制,对治理我国生猪产业区域不均衡发展问题具有重要意义。方法 文章建立空间杜宾模型探索生猪价格的空间传导特性,引入溢出效应分解分析替代品价格、成本要素对省域生猪价格的冲击效应,并运用广义预测误差分解测定省际生猪价格关联水平及方向。结果 （1）我国生猪价格波动具有显著空间相关性和异质性,其空间集聚特征随时间推移愈发显著,产业布局呈现“高—高南部簇拥,低—低东向西扩”的空间演变特征。（2）省内替代品价格、成本要素对生猪价格波动的影响显著但作用力度有限,省际溢出效应是生猪价格发生空间传导的主导因素。（3）鸡肉价格与省内、省外的生猪价格存在密切正向关联;牛肉价格波动推动本省生猪价格同步波动;豆粕价格波动对本省或邻省生猪价格均起到正向推动作用;玉米价格变化引起本省或邻省生猪价格的负向变化。（4）辽宁、河北、吉林、河南等省的正向净关联度较大,属于波动“主导者”或“发动者”;上海、广西、重庆等省市的负净关联度较大,隶属价格波动的“接收者”;江苏、湖南、福建等省市的关联度和全国平均关联度持平,在价格波动传导体系中属于波动“中介者”。结论 有关部门应针对不同省域在生猪价格传导体系中所发挥职能的不同,分级管控生猪价格,同时促进地方畜牧业经济发展,不断优化我国生猪养殖产业区域布局。     

Inflation,capital markets and the supply of beef

This paper puts forward an explanation for the negative elasticity of supply of beef found in many LDC's. As is explained by Jarvis (1974), the elasticity of supply of beef may be negative in the short run due to the dual role of cattle as both a capital and a consumption good. But in some LDC's, and especially in Latin America, one may find a long-run negative association between slaughter and prices, that cannot be explained by assuming shocks to slaughter are causing changes in prices. It is no coincidence that Jarvis' hypothesis itself was developed to explain developments in Argentina, a country with chronic high inflation. The paper argues that this long-run relationship cannot be explained by the Jarvis hypothesis, and offers an alternative hypothesis based on the demand for cattle as a hedge against inflation. The long-run negative association between slaughter and prices has been found in high inflation countries. High inflation combined with excessive regulation of capital markets cause the well known phenomenon of desintermediation. It is argued here that cattle plays a role in the inflation hedged portfolio that is then demanded. Therefore, with imperfect capital markets the supply of beef is affected by the demand for cattle as an asset, and this demand, in turn, is affected by inflation. This paper will only attempt to prove the link between imperfect capital markets and the supply of beef. The way inflation in a repressed capital market leads to an imperfect capital market is not addressed here, for reasons of brevity. The paper will develop a model that in the context of imperfect capital markets results in a negative elasticity of supply. The model will then be tested with Uruguayan data. Uruguayan data are very adequate to test the hypothesis because they cover both a period without inflation and a period of high inflation. The results support that cattle was used as an alternative to money holdings when inflation signified a big tax on the latter. Inflation therefore affected the demand for cattle, or, conversely, the supply of beef.     

An econometric analysis of U.S. vital wheat gluten imports

In light of the wheat wet milling industry's development in the E.C. and of the prominent role U.S imports play in the international market for wheat gluten, this paper discusses the international market for wheat gluten, an important component of processed grain products. An econometric analysis of the U.S. import demand for wheat gluten is undertaken. The price of flour, income, and the U.S. value of wheat protein are found to be important determinants of wheat gluten imports.     

茶产业区域发展综合实力评估研究

[目的]我国茶产业面临着诸多问题和挑战,亟需通过推进结构调整、优化产业布局促进转型升级。文章拟对茶叶主产区发展综合实力进行定量化评估,并找出综合实力分布的内在规律及其影响因素,为主产区提升茶产业区域综合实力提供依据。[方法]通过选取产业规模、产品专业化、科技支撑、产业素质与效益4个维度的评价指标,构建了茶产业区域发展综合实力评价模型,对全国17个茶叶主产省、264个主产县进行了产业综合实力评估。[结果]根据省域和县域的综合实力得分排名,评出了综合实力较强的7个省和100个县,并总结了区域分布规律。[结论]从综合实力较强的产地分布特征看:(1)产业发展的适度规模是综合发展实力的基础;(2)特色鲜明、优势突出的主导产品线是综合实力的有力保障;(3)产业发展需要有力的科技支撑;(4)产业素质与品牌建设不可或缺。最后,根据以上结论,提出了针对促进茶产业转型升级的政策建议。     

Abstracts of Second- and Third-Place Undergraduate Papers

This paper presents an analysis of the demand for hunting licenses in Alberta from 1968 to 2004. Regression analysis was used to estimate the effects of some of the commonly thought reasons for the decline in hunting participation in Alberta; specifically, the effects of changes in wildlife certificate prices, species license prices, income levels, and the proportion of the population living in urban areas. I found that hunting appears to be an inferior good since the income elasticity of demand was elastic—as provincial income levels increase, it is expected that less people will participate in hunting. In addition, the price elasticity of demand was inelastic indicating that raising license prices could theoretically generate increased revenues for wildlife management. I further hypothesize that if hunting participation needs to be increased for wildlife management purposes, it can be accomplished by decreasing the prices of licenses without directly affecting the revenue generated. Ultimately, we must realize that many of the hypothesized reasons for the decline in hunting participation in Alberta are qualitative and non-economic in nature and are thus difficult to include in most analyses. Whereas price and income are important determinants of hunting demand, they are only part of the story.     

A MODEL OF THE NEW ZEALAND SHEEP INDUSTRY*

The paper presents a model of the New Zealand Sheep Industry which predicts animal numbers in various sex/age categories. The explanatory variables used are the prices of the end products of the industry and time, to represent technological change. Prices are found to have a significant, though delayed, effect on farmers' stock decisions. Furthermore, the significance of time demonstrates improvements in some forms of animal husbandry. The relative failure of the model's latest predictions emphasizes the importance of irrational optimism in the industry.     

Britain's food Manufacturing industry And Its Recent Economic Development

The paper starts by examining the importance of the food manufacturing industry-to the economy, to British agriculture and to consumers. It goes on to consider the economic nature of the industry's products and how the industry has expanded its market by launching new products and increasing its international competitiveness. Food manufacturing is then compared with manufacturing industry generally as regards size of business, value added and productivity of labour and capital. Finally the profitability of large listed companies in both food and all manufacturing industry is discussed and compared with the cost of capital.     

Predictive performance of the World Bank's commodity price projections

The World Bank's commodity price projections are widely used for various planning purposes. Two aspects of the Bank's projections of relative prices are studied in this paper. The first is whether the forecasts make efficient use of the information available at the time the forecast is made. The second is whether the forecasts predict future prices with greater accuracy than alternative forecasting methods. These matters are studied by comparing the World Bank's past price projections with the actual prices that were subsequently observed. The results show that, overall, the World Bank forecasts do not pass either test. First, the World Bank forecasts are informationally inefficient. Prediction error (projection minus actual price) tends to be positively correlated with the projections themselves. Although the direction of future price movements tends to be correctly predicted, the magnitude of these movements tends to be overpredicted. Second, the World Bank forecasts do not perform well even compared with the simplest of alternative forecasting methods - the prediction of no change.     

Testing vertical price transmission for Vietnam's Robusta coffee

Vietnam has undergone market reforms over the last three decades; and as a consequence, the coffee sector has become increasingly market‐driven. The success of the government's liberalisation policies in terms of market efficiency is investigated by examining the transmission of both positive and negative price changes for Robusta coffee between export and farmgate prices. We used a threshold vector error correction model and high‐frequency daily data. The primary result here is that of a symmetric price transmission between export and farm‐level prices. This result holds when tested with weekly price data, derived from the daily data. Farmgate prices respond faster to decreases than increases in export prices when the long‐run deviation exceeds a certain threshold. These price changes are transmitted within several days. This research also confirms the importance of transaction costs, and other price frictions mostly ignored in prior analyses for coffee.     

Australian wine industry competitiveness: why so slow to emerge?

Despite favourable growing conditions, Australia's production or exports of wine did not become significant until the 1890s. Both grew in the 1920s, but only because of government support. Once that support was removed in the late 1940s, production plateaued and exports diminished: only two per cent of wine production was exported during 1975–1985. Yet over the next two decades, Australia's wine production quadrupled and the share exported rose to two‐thirds – before falling somewhat in the next 10 years. This paper explains why it took so long for Australia's production and competitive advantage in wine to emerge, why it took off spectacularly after the mid‐1980s and why it fell in the 10 years to 2016. It concludes that despite the recent downturn in the industry's fortunes, the country's international competitiveness is now firmly established and commensurate with its ideal wine‐growing climate, notwithstanding the likelihood of further boom‐slump cycles in the decades ahead.     

Farm Input, Farm Output and Retail Food Prices: A Cointegration Analysis

This paper investigates the adjustment mechanism between farm input prices, farm output prices and food retail prices in Canada. Johansen's maximum likelihood approach is used in addition to the Engle-Granger approach to test for cointegration. Contrary to the common assumption that farm output prices are more flexible than farm input prices, it is found that farm output prices, though cointegrated, are weakly exogenous in the sense that they do not respond in a systematic manner to disequilibrium in farm input prices and retail food prices. Evidence is found to support “cost push” and “demand pull” theories but, since food retail prices carry a heavier weight in the cointegration relations, it can be concluded that shocks manifesting themselves (first) at the retail level do not persist as long. Cet ouvrage se concentre sur le mécanisme d'ajustement entre les prix des intrants à la ferme, les prix payés aux producteurs agricoles et les prix de l'alimentation au détail au Canada. Les techniques développées par Johansen et par Engle et Granger sont utilisées pour vérifier des hypothèses reliées à la cointegration. Contrairement à la présomption que les prix payés aux agriculteurs sont plus flexibles que les prix de leurs intrants, on a découvert que les prix payés aux agriculteurs, bien que cointégrés, sont exogènes au moindre degré dans le sens qu'ils ne s'ajustent pas en fonction du déséquilibre dans les prix des intrants et les prix de l'alimentation au detail. La théorie voulant que les prix montent à cause des hausses dans les prix des intrants est vérifiée de même que la théorie alternative voulant que les ajustements des prix se fassent du détail aux intrants. Fluctuations occasionées par des changements dans les prix de l'alimentation au détail sont dissipées plus rapidement que les ajustements causés par des variations dans les prix des intrants.