Excess Asset Reversions and Shareholder Wealth

The ownership of pension assets in a defined benefit pension plan is an unresolved issue in corporate finance. The issue is important because it defines the appropriate investment policy for a pension fund. In this paper, we summarize the ownership debate in the form of two mutually exclusive theories. We then focus on a recently popular event in pension finance, excess asset reversions. Our paper demonstrates the valuation effects associated with this event in a stochastic dominance framework. Under certain conditions, a reversion constitutes an expropriation of wealth from the participants and beneficiaries of the plan to the firm. Using data provided by the Pension Benefit Guaranty Corporation and the Center for Research in Security Prices tape, we examine the returns to the shareholders of 58 companies which conducted excess asset reversions between 1980 and 1984. Our results show that large abnormal returns accrued to these shareholders around the time of the reversion. These findings have implications both for the appropriate investment policy of pension funds and for public policy with respect to plan terminations.     

Optimal Pricing and Order-Up-To S Inventory Policy with Expected Utility of the Present Value Criterion

The article determines pricing and order-up-to level S inventory decisions over an infinite planning horizon from the point of view of a risk-averse decision maker. The demand is assumed to be stochastic but influenced by the selling price which is a decision variable. Shortages are allowed and backordered partially. We calculate the present value of the cash flow over the entire planning horizon and incorporate the notion of risk aversion into the model using a concave utility function. We numerically demonstrate the model and investigate the impact of different model-parameters on the optimal decisions. It is observed that the optimal selling price for a risk-averse decision maker is not less than the optimal selling price of a risk-neutral decision maker while the optimal order level for the risk-averse decision maker is always less than that of the risk-neutral decision maker.     

The impact of capital transfer tax on agriculture a preliminary assessment

Abstract

This paper aims to measure and compare technical efficiencies in the England and Wales dairy sector from stochastic production functions in the immediate post‐quota period. Milk Marketing Board data for a stratified random sample of dairy farms for 1984/85, 1985/86 and 1986/87 are used. The results show that average levels of efficiency have initially fallen and then stabilized over this period. Moreover, there is a high degree of correlation between the rankings of the efficiency measures.     

A methodology to assess the current situation in irrigated agriculture: An application to the village of Tauste (Spain)

Abstract

This paper presents a simple weighted goal programming model which can be used to predict the current allocation of agricultural enterprises in a particular geographical area. Moreover, it also shows how the approach proposed can be integrated into a multiobjective framework to measure the opportunity cost of maintaining the current situation in terms of several criteria relevant from a private and a public perspective. In this way, the opportunity cost of sustaining the current allocation of agricultural enterprises in the irrigated lands of Tauste (Spain) is assessed in terms of gross margin, employment, seasonal labour and water consumption.     

Soil Fertility Management and Compost Use in Senegal's Peanut Basin

The Jóór (Dior) soils of Senegal's Peanut Basin are inherently low in organic matter, limiting yields of millet and other crops and threatening the food security of smallholders. Focus groups and interviews were conducted in eight villages to characterise the site-specific fertility management by farmers in the Peanut Basin. Results of the qualitative survey revealed that farmers base management decisions on a series of fertility indicators that include type, colour, and texture of soil, presence of vegetation, and productivity in previous years. In an effort to equalise fertility across the field, farmers amend areas they classify as less fertile with decomposed manure and household waste from the family sëntaare (traditional pile) orwith compost from managed piles. On-site measurements of soil in areas of fields amended with compost or sëntaare material revealed significant increases in peanut and millet growth over unamended areas, but little difference between the effects of compost and manure. Similarly, chemical analysis revealed increased effective cation exchange capacity (ECEC) and nutrient concentrations (K, Mg and Al) in soils amended with compost or manure. Similarities in the chemical characteristics of compost and sëntaare material suggest that development workers could emphasise improved pile management rather than promoting more labour-intensive composting.     

Site selection to test an integrated approach to agricultural research for development: combining expert knowledge and participatory Geographic Information System methods

The sub-Saharan Africa challenge programme is designed to address the problems of failures of agricultural markets, inappropriate policies and natural resource degradation, that contribute to the continuing deterioration of livelihoods and food security in the region. It is seeking to do this by redefining the roles of scientists and farmers through collaborative learning processes, addressing questions about the level, timing, type and formof participation, as well as themost effective approaches andmethods to foster them. The research domains of the programme deal with sustainable intensification of smallholder agriculture, the sustainable management of natural resources, the development of efficient markets, and the promotion of enabling policies. One question that was addressed in designing the initiative was deciding where to work so as to maximize the chances of successful testing of this new approach, so that it would lead to significant reductions of rural poverty. A participatory process was put in place to design a framework to accomplish this site selection, and then to apply it in west, east and southern Africa. A mixture of spatial data analysis and expert knowledge on spatial and non-spatial factors was used, and one primary site in each region was identified to form the basis for the next phase of the challenge programme. Several lessons were learnt from the process, including the importance of adapting themethods to actual conditions, the increased utility of targetting when the quantitative and the qualitative are freely combined, and the continued need for baseline spatial and non-spatial data to improve the targeting of research in the future that is designed to alleviate poverty in sub-Saharan Africa.     

Economic impacts of conservation farming in a marginal environment: the case of ‘Landcare’ in the Philippines

In the marginal, upland regions of the Philippines, soil erosion and poverty are significant problems. The Landcare Programme has sought to address these twin problems. We assess the economic impacts of the Landcare Programme in the Province of Bohol. We first explore whether the adoption of Landcare practices, particularly those of contour farming and tree planting, in a highly degraded landscape has resulted in improved livelihood outcomes for upland farming families. Second, we analyse the potential for the piecemeal adoption of these measures to deliver tangible benefits at the watershed scale. Finally, using a benefit–cost approach, these outcomes are compared with the costs of research and extension projects that have helped achieve them. We conclude that the net economic impact of the Landcare Programme in Bohol is positive, with the primary beneficiaries being the individual households that adopt the Landcare practices. These benefits are largely generated by productive opportunities that arise once the hillsides have been stabilized. Although the downstream impacts of land-use changes associated with the Landcare Programme are positive, they are of marginal economic importance. Hence, the focus and primary justification of the Landcare Programme should be on improving the productivity and livelihoods of upland farming households.