Production risk,risk aversion and the determination of risk attitudes among Spanish rice producers

Agricultural production is subject to risk and the attitudes of producers toward risk will influence input choices insofar as these affect production risk. Risk attitudes in turn may be affected by certain socioeconomic characteristics of producers. Using 2004 survey data from a cross‐section of 130 Spanish rice farms, we estimate risk‐aversion coefficients of farmers and investigate the influence of a series of socioeconomic variables on their risk attitudes. Our results show that farmers exhibit risk‐averse behavior and that risk attitudes are related to a series of socioeconomic characteristics. In particular, the belief that the farm will continue after the producer retires is found to increase the degree of risk aversion, while age is found to have nonlinear effects on risk aversion. Off‐farm income, especially from nonagricultural activities, is found to reduce risk aversion. Neither the educational level of the producer nor the presence of dependents on the household is found to have an effect on risk preferences. Regarding the production technology, we find that land, labor, and fitosanitary products are risk‐reducing inputs, whereas capital, seeds, and fertilizer all increase risk.     

Prioritising land to be preserved for agriculture: A context-specific value tree

In Belgium as in many other countries, agricultural land is under pressure for development of other land uses. This paper presents a method for setting priorities for preservation of land for agriculture. The method is based on a participatory approach through which a value tree is formulated. This results in a list of criteria to define farmland value, which is explicitly linked to the objectives for farmland preservation. The value tree allows the list of criteria to be determined in a structured and consistent way. The participatory process contributes to the development of a shared vision on farmland preservation. The approach also incorporates context specificity, as shown by its application for farmland preservation in Flanders.     

Nursing home choice,family bargaining,and optimal policy in a Hotelling economy

We develop a model of family bargaining to study the impact of the distribution of bargaining power within the family on the choice of nursing homes by families, and on the locations and prices chosen by nursing homes in a Hotelling economy. In the baseline (static) model, where the dependent parent cares only about the location of the nursing home, the markup of nursing homes is increasing in the bargaining power of the dependent parent, and nursing homes are located at the extreme periphery. We compare the laissez‐faire with the social optimum (which involves more central locations of nursing homes), and examine its decentralization in first‐best and second‐best settings. We explore the robustness of our results to introducing a bequest motive in a dynamic overlapping generations model, which allows us to study the joint dynamics of wealth accumulation and nursing home prices. If the bequest motive is strong, the markup is decreasing in the bargaining power of the dependent. However, wealth accumulation, by reducing interest rates, raises markup rates and nursing homes prices.     

Farmland for tomorrow in densely populated areas

The paper describes the results of a research that aimed to come up with a well structured method to estimate future farmland requirements in densely populated areas. By using in depth interviews, scenario analysis and strategic orientation rounds, a method is developed to support policy optimization and to explore alternative future developments. The method is applied to the case of agriculture in the Flemish part of Belgium to show the feasibility of the model and to provide input for the discussion among policy makers in Flanders. The research results can be used by policy makers to build a new Spatial Plan Flanders for the period 2007–2013.     

At‐home meat consumption in China: an empirical study*

The remarkable economic changes occurring within China since 1978 have resulted in a striking alteration in food consumption patterns, and one marked change is the increasing consumption of meat. Given China’s large population, a small percentage change in per capita meat consumption could lead to a dramatic impact on the production and trade of agricultural products. Such changes have major implications for policy makers and food marketers. This paper concentrates on meat consumption patterns in the home in China. A censored linear approximate almost ideal demand system model was employed in the study, and major economic parameters were estimated for different meat items. Data used in this study were collected from two separate consumer surveys – one urban and one rural in 2005.     

Accounting for the Gender Technology Gap Amongst Smallholder Rice Farmers in Northern Ghana

Narrowing the gender technology gap in agricultural production has become a critical policy issue in sub‐Saharan Africa. A better understanding of the gender technology gap is essential for policy formulation and programme planning to ensure equity in resource allocation, and household‐level food security in low and middle income countries, such as Ghana. We employ a metafrontier approach to analyse the differences in the efficiency of male and female farmers, recognising the endogeneity of some of the variables in the inefficiency effects model, in particular the credit constraints of the rice farmers under study. Our findings show that while the rice farms themselves are very similar, average yields for male managed farms tend to be significantly higher than female managed farms reflecting higher seeding and fertiliser application rates on male managed farms. However, there is no significant difference between the genders in either land used for rice or total output per farm household. We find some evidence that relative to the metafrontier, male managed farms are less efficient than female managed farms. The results further show gender technology gap amongst the smallholder rice farmers with females’ technology gap ratio being significantly greater than that of males, with females operating on a production frontier closer to the metafrontier. Policies that provide females more access to productive resources and other agricultural services could assist in the generation of relatively higher output.     

Is fertiliser use inconsistent with expected profit maximization in sub‐Saharan Africa? “Evidence from Nigeria”

This article revisits a conventional wisdom that inorganic fertiliser use across sub‐Saharan Africa is too low. This expectation that more farmers should be using inorganic fertiliser, and at higher rates, implies it is profitable to use rates higher than observed if farmers are rational expected profit maximisers. We obtain consistent estimates of the effects of applied nitrogen on rice production. We find the yield response to applied nitrogen to be low in the main rice growing farming system. Farmer behaviour is not inconsistent with expected profitability which is limited by a low yield response to applied fertiliser, high transportation costs, and low selling prices for rice in rural areas. In particular, we do not find any farmers for whom applied nitrogen is profitable that are not using fertiliser in the study sample for each of our survey years (2010 and 2012).     

Raising offtake from cattle grazed on natural rangelands in sub-Saharan Africa: a transaction cost economics approach

Farmers in sub‐Saharan Africa are constrained by large transaction costs associated with marketing of their livestock. However, transaction costs are often not taken into account in the analysis of factors hampering the development of livestock marketing in this region. This article empirically measures the influence of transaction costs on the offtake from cattle grazed on natural rangelands in Uganda. The study is based on the monitoring of 696 cattle transactions in three districts of Uganda from August 2004 to August 2005. The estimated models suggest that proportional transaction costs represented by the state of roads, distance to markets, and time taken to reach the market are important variables constraining market participation. In order to raise offtake from the national herd, it is essential to explicitly address these costs. One potential solution is collective action in marketing of livestock in which proportional and fixed transaction costs are reduced and shared among the group members.