On the Consumer Value of Diversity: An Application to Italian Fish

This article investigates the consumer value of diversity both conceptually and empirically. It proposes a measure of diversity value based on a benefit function. It shows that the consumer value of diversity can arise from complementarity and/or convexity effects among consumer goods. The usefulness of the approach is illustrated by an application to fish in Italy. The investigation illustrates the role played by both convexity and complementarity in the valuation of diversity. The empirical evidence shows the importance of dynamics. It also documents how the value of diversity varies depending on the bundles considered.     

The Elusive Price Premium for Ecolabelled Products: Evidence from Seafood in the UK Market

Ecolabelling is an increasingly important tool used in the promotion of sustainable forestry and fishery products around the world. Whether the consumer is actually paying a price premium for ecolabelled products is of fundamental importance as it indicates a return on the investment of sustainable practices, providing an incentive for producers to undertake such practices. This article seeks to address the question of whether or not an actual premium is being paid by consumers for ecolabelled seafood by conducting a hedonic analysis of Marine Stewardship Council (MSC)‐certified frozen processed Alaska pollock products in the London metropolitan area in the UK market using scanner data. Regression results show a statistically significant premium of 14.2%. This implies the presence of market differentiation for sustainable seafood and the potential of the MSC’s fisheries certification programme to generate market incentives for sustainable fisheries practices.     

Foreign Direct Investment and the Performance of European Agribusiness Firms

This article analyses the relationship between foreign direct investment and the performance of European agribusiness firms. Motivated by the role of heterogeneous firms in new trade theory and using a firm‐level dataset, statistical analyses identify key differences between firms investing in foreign economies and those that do not. A binary choice model quantifies the relationship between firm characteristics and the decision to engage in foreign investment. Size and – less strongly – productivity are greater for multinationals relative to domestic firms. Furthermore, European multinationals are characterised by a larger debt to equity ratio and show lower labour and input costs.     

How sensitive is U.S. agricultural trade to the bilateral exchange rate? Evidence from bulk,intermediate, and consumer‐oriented products

This article examines the dynamic effects of changes in bilateral exchange rates on changes in bilateral trade of bulk, intermediate, and consumer‐oriented agricultural products between the United States and its 10 major trading partners. We find that, for consumer‐oriented products, U.S. exports are highly sensitive to bilateral exchange rates in both the short and long run, while U.S. imports are mostly responsive only in the short run. For bulk products, on the other hand, U.S. exports and imports are relatively insensitive to exchange rate changes in both the short and long run. For intermediate products, exports and imports are responsive to exchange rate changes in the short run, but not in the long run. It is also found that income of the United States and its trading partners has a significant effect on U.S. exports and imports of the three types of agricultural products in both the short and long run.     

Soil and water conservation technologies: a buffer against production risk in the face of climate change? Insights from the Nile basin in Ethiopia

This study investigates the impact of different soil and water conservation (SWC) technologies on the variance of crop production in Ethiopia to determine the risk implications of the different technologies in different regions and rainfall zones. Given the production risks posed by climate change, such information can be used by decision makers to identify appropriate agricultural practices that act as a buffer against climate change. Results show that SWC investments perform differently in different rainfall areas and regions of Ethiopia and that the effectiveness of technologies such as irrigation, fertilizer, and improved seeds often depends on whether these investments are coupled with SWC measures. These results underscore the importance of the selection of appropriate combinations of technologies and careful geographical targeting when promoting and scaling up SWC technologies for adaptation to climate change.     

Cash crop choice and income dynamics in rural areas: evidence for post‐crisis Indonesia

In this article we investigate the factors affecting levels and growth of incomes in rural Indonesia following the crisis of 1997–1998. In particular, we investigate the relative roles of nonfarm incomes and productivity improvements achieved via changes in crops versus improvements on the same crops on income dynamics. Framing the article in the context of an optimal labor allocation model, relying on unique household panel data from Central Sulawesi, and using advanced panel econometric methods, we find that local innovations related to the adoption and intensification of new cash crop varieties, more specifically the shift from coffee to cocoa production, can explain a substantial part of the observed post‐crisis developments. Causal estimates of the effect of growing cocoa suggest that households were on average able to achieve about 14% higher income levels during the post‐crisis period compared to the planting of other crops, most notably coffee. Also, our results demonstrate the importance of engagement in nonfarm activities for household income growth. Comparative analyses using a nationally representative survey suggest that similar processes are at play in other parts of Indonesia.     

Challenging Small‐Scale Farming: A Non‐Parametric Analysis of the (Inverse) Relationship Between Farm Productivity and Farm Size in Burundi

We use a non‐parametric approach to investigate the (inverse) relationship between farm productivity and farm size. A kernel regression is used on data of mixed cropping systems to study the determinants of production including different factors that have been identified in literature as missing variables in the testing of the inverse relationship such as soil quality, location and household heterogeneity. Household data on farm activities and crop production were gathered from 640 households in 2007 in two Northern provinces of Burundi. Our results do not reject the findings of an inverse relationship between farm size and productivity. However, we find that size returns vary substantially with farm size, that is, between 0.2 for the smallest farms and 0.8 for the largest farms. Other factors that significantly affect production include soil quality. Finally, we find a significant positive association between food security and farm size.     

Malaria incidence and agricultural efficiency in Uganda

The cost of accessing healthcare can be a major determinant of disease prevalence, which in turn has short‐ and long‐term welfare implications on poor households. In response, governments in developing countries often resort to subsidizing the cost of drugs, which, while perhaps easier to administer, may not always be the most effective way of addressing healthcare cost. In this regard, we analyze the impact of different types of household level health expenses on disease incidence and agricultural production efficiency. We use data from the 2006 Uganda National Household Survey, which covered approximately 7,400 households. The results suggest that a 10% increase in consultation, medicine, and hospitalization expenses would reduce malaria incidence respectively by 35.6%, 20.5%, and 21.3 %, which translates into a 1.1%, 0.6%, and 0.6 % decrease in agricultural inefficiency, respectively. The results indicate that helping poor households meet expenses for consultation through subsidies or eliminating consultation fees has a larger impact on malaria incidence and agricultural productivity among poor rural households than subsidizing the cost of medical drugs, the most common avenue chosen by developing country governments in the fight against the disease.     

Rural nonfarm activities and agricultural crop production in Nigeria

Although most rural households are involved in the farm sector, the nonfarm sector has grown significantly in recent decades, and its role in rural development has become increasingly important. This article examines the effect of participation in nonfarm activities on crop expenses of farm households in Nigeria. The relationship is modeled using a nonseparable agricultural household model that suggests that participating in nonfarm activities can relax the credit constraints facing farm households and reduce risk thereby helping households improve farm production and smooth consumption over time. The results show that participation in nonfarm activities by Nigerian farmers has a positive and significant effect on crop expenses and in particular on payments for hired labor and inorganic fertilizers. Separate analysis of the six geopolitical zones in Nigeria indicates that it is in the South-South and South-East zones where nonfarm participation appears to induce more hiring of labor. The results support the hypothesis that nonfarm participation helps relax liquidity constraints but suggests how that liquidity is used is zone-specific. In general, the results also indicate that liquidity is used more to pay for inputs into staple production as opposed to cash crops.     

Trade Creation and Diversion Effects of Preferential Trade Associations on Agricultural and Food Trade

Agricultural market distortions remain a major focus of contention in world trade negotiations. Estimates of the effects of liberalising current agricultural trade restrictions indicate an approximately $385 billion increase in global welfare, with the disproportionate share of the benefit being enjoyed by developing countries. In response to difficulties in adopting agricultural trade reforms, individual groups of countries have formed multiple bilateral and regional preferential trade agreements (PTA) to enhance trade among members. Few sectoral analyses exist of the effects on agricultural and food product trade of PTAs. This research uses a gravity model to isolate the effects of various PTAs on both intra‐ and extra‐bloc agricultural and food product trade for three time periods: 1995, 2000 and 2004. Findings strongly support PTA benefits in terms of increased intra‐bloc trade in both sectors. The findings also generally support trade creation in agricultural products. PTA membership was also associated with food trade creation in most cases, although diversion was observed for several associations composed primarily of developing countries.