European Review of Agricultural Economics - recent issues

Trade liberalisation, agricultural productivity and poverty in the Mediterranean region

Hassine, N. B., Kandil, M. — 2009-04-20

A widely held view in the economic literature is that productivity growth is an important pathway through which trade liberalisation may alleviate poverty. This paper explores the link between trade openness, agricultural productivity growth and poverty reduction in a panel of Mediterranean countries. Technical efficiency scores and total factor productivity indexes are computed using the latent class stochastic frontier model to account for cross-country heterogeneity in farming production technologies. The relevance of agricultural productivity gains for poverty reduction is investigated through joint estimation of real per capita GDP growth and inequality changes in a dynamic panel setting. The findings illustrate the positive effects of openness on farming efficiency and productivity and give strong support to the view that agricultural productivity growth is a channel for poverty alleviation.

Measuring market power in the French Comte cheese market

Merel, P. R. — 2009-04-20

A new empirical industrial organisation approach is used to measure seller market power in the French Comté cheese market, characterised by government-approved supply control. The estimation is performed on quarterly data at the wholesale stage over the period 1985–2005. Three different elasticity shifters are included in the demand specification, and the supply equation accounts for the existence of the European dairy quota policy. The market power estimate is small and statistically insignificant. Monopoly is clearly rejected. Results appear to be robust to the choice of functional form and suggest little effect of the supply control scheme on consumer prices.

The effects of EU agricultural policy changes on farmers' risk attitudes

Koundouri, P., Laukkanen, M., Myyra, S., Nauges, C. — 2009-04-20

This analysis utilises a model of production under risk estimated on Finnish farm-level data to measure farmers' risk attitudes in a changing policy environment. We find evidence of heterogeneous risk preferences among farmers, as well as notable changes over time in farmers' degree of risk aversion. This result is due to the increase in the non-random part of farm income generated by the policy change after Finland's European Union accession. The analysis confirms the assertion that agricultural policies that are decoupled from production do affect input use and crop mix through their effect on farmers' risk attitudes.

Evaluating the effects of farm programmes: results from propensity score matching

Pufahl, A., Weiss, C. R. — 2009-04-20

The paper applies a semi-parametric propensity score matching approach to evaluate the effects of agri-environment (AE) programmes on input use and farm output of individual farms in Germany. The analysis reveals a positive and significant treatment effect of AE programmes on the area under cultivation, in particular grassland, resulting in a decrease of cattle livestock densities. Furthermore, participation significantly reduced the purchase of farm chemicals (fertiliser, pesticide). We also find differences in the treatment effect among individual farms (heterogeneous treatment effects). Farms that can generate the largest benefit from the programme are most likely to participate.

Investment rigidity and policy measures

Serra, T., Stefanou, S., Gil, J. M., Featherstone, A. — 2009-04-20

This paper assesses the impacts of decoupled government transfers on production decisions of a sample of Kansas farms. Our empirical analysis is based on a reduced-form application of the dual model of investment under uncertainty developed by Sckokai, which is extended to a consideration of irregularities in the capital stock adjustment cost function. To do so we adopt the threshold regression methods proposed by Hansen. The econometric results support the existence of three regimes characterised by different economic behaviour. Our analysis suggests that in a dynamic setting that allows for irregularities in the capital adjustment cost function, decoupled transfers can have a powerful influence on production decisions. The dynamics of the stock of capital cause this influence to grow over time.

Organic Farming: An International History

Henning, J. C. — 2009-04-20

The European Union and Developing Countries: Trade, Aid and Growth in an Integrating World

Matthews, A. — 2009-04-20

An Introduction to Sustainable Development

Stage, J. — 2009-04-20

The Softwood Lumber War: Politics, Economics and the Long U.S.-Canada Trade Dispute

Sarker, R. — 2009-04-20

Landwirtschaftliche Betriebslehre. Grundwissen Bachelor

Sumelius, J. — 2009-04-20

Tariffs and other trade costs: assessing obstacles to Mediterranean countries' access to EU-15 fruit and vegetable markets

Emlinger, C., Jacquet, F., Lozza, E. C. — 2009-02-05

This paper evaluates the role of tariffs in the overall trade barriers faced by Mediterranean countries that export fruit and vegetables to the European Union (EU), using a gravity model. With an annual specification, we measure the border effect faced by the Mediterranean countries on entering EU markets and show that trade costs other than transport costs and tariffs seriously hinder exports from Mediterranean countries. A second specification analyses the impact of seasonality on tariff sensitivity. Periods of the year during which liberalisation could have a greater impact on trade are identified.

Global productivity distribution and trade liberalisation: evidence from processed food industries

Ruan, J., Gopinath, M. — 2009-02-05

In this study, we test the hypothesis that an industry's average productivity increases with liberalised trade in the context of processed food industries. Furthermore, we examine the resulting cross-country resource and market share reallocation in these industries. For this purpose, we employ a kernel density estimator to approximate the global productivity distribution in five major processed food industries for every period between 1993 and 2000. We find that the mean and alternative percentiles of the global productivity distribution shift to the right with liberalised international trade. Moreover, countries with faster productivity growth than the global average benefit from trade liberalisation by acquiring a larger share of global markets and resources.

Impact of a gradual increase in milk quotas on the EU dairy sector

Bouamra-Mechemache, Z., Jongeneel, R., Requillart, V. — 2009-02-05

The European Union (EU) dairy sector is facing significant changes due to EU enlargement, the Luxembourg reform and ongoing World Trade Organisation (WTO) negotiations. This paper explores the impact of alternative dairy policies in the context of a WTO agreement and further dairy policy adjustments. In particular, it analyses the impact of gradual but significant increases in EU milk quota and discusses the implications of different changes in the allocation of milk quotas. These scenarios are compared with the status quo as decided in the Common Agricultural Policy reform of 2003. We find that, by 2014–2015, the market effects of abolishing quota are similar to those of a 2 per cent gradual quota increase starting in 2009.

Demand for on-farm permanent hired labour on family holdings

Blanc, M., Cahuzac, E., Elyakime, B., Tahar, G. — 2009-02-05

In many developed countries, the share of permanent hired labour in the total agricultural labour force has been increasing in recent years. Using data from the 1988 and 2000 agricultural censuses in France, we analyse the factors that influence households' decisions regarding the use of hired labour. We show that the increase in permanent wage employment observed over that period results from two opposite trends: an important increase in the proportion of family farms using permanent wage labour and a slight decrease in the average volume of permanent hired labour per employer. The first trend was mainly due to an improvement in family labour productivity and to a sharp rise in farm size, whereas the second results from a rise in agricultural wages, and possibly also from an increase in the productivity of hired labour.

Bioenergy crop production and climate policies: a von Thunen model and the case of reed canary grass in Finland

Lankoski, J., Ollikainen, M. — 2009-02-05

We examine the potential of bioenergy crops to offset greenhouse gas emissions from fossil fuels, assuming homogeneous agricultural land and distance-dependent transport costs. Variable transport costs define the socially and privately optimal extensive margin of the bioenergy crop production and imply that fertiliser intensity differs across locations. Under current policy, private fertiliser application is suboptimal, requiring location-specific input, transport or output subsidies. The theoretical model is applied to reed canary grass (Phalaris arundinacea L.) in Finland, which offsets emissions from peat in electricity production. If oats is the alternative crop, and taking permit price of CO₂ emissions as the proxy for climate benefits over the life cycle, reed canary grass production is socially optimal even 100 km away from the power plant and still offsets more than 6 tons/ha of CO₂ emissions from peat.

Producer incentives and plant investments for Salmonella control in pork supply chains

Backus, G. B.C., King, R. P. — 2009-02-05

This paper presents a unified analysis of dynamic producer incentive systems for Salmonella control in primary production and slaughter plant investments in Salmonella control measures. We identify optimal incentive system parameters and cost-effective control strategies for achieving various levels of Salmonella prevalence. We compare the performance measures of the combined plant-level control and producer incentive system with results obtained under a producer incentive system only. The combined system allocates control effort among producers and the slaughter plant, resulting in 25–83 per cent lower expected total control cost for a wide range of threshold values.

Cross-border acquisitions in the global food sector

Herger, N., Kotsogiannis, C., McCorriston, S. — 2009-02-05

Cross-border acquisitions constitute the main form of foreign direct investment in the world economy, the focus of this paper being to consider the determinants of the location and growth of cross-border acquisitions in the global food sector. The data relates to over 2,000 international acquisitions in the food sector from 45 source to 46 host countries. The results highlight the importance of market size, relative costs and stock market growth as important determinants. We also report differences involving acquisitions in food processing and retailing and higher and lower/middle income countries. Results involving acquisitions in European countries are also highlighted.

Handbook of Water Resources in India: Development, Management, and Strategies

Swain, A. — 2009-02-05

EU Agricultural Law

Ackrill, R. — 2009-02-05

Promise, Trust, and Evolution: Managing the Commons of South Asia

Bromley, D. W. — 2009-02-05

Estimating Market Power and Strategies

McCorriston, S. — 2009-02-05

Women's Role in Economic Development

Corner, L. — 2009-02-05

List of referees

2009-02-05

Particular requirements for institutional analysis in nature-related sectors

Hagedorn, K. — 2009-02-05

Particular requirements for institutional analysis in nature-related sectors

Hagedorn, K. — 2009-02-05

Foreword

Albisu, L. M. — 2008-10-21

The informational role of prices

Romstad, E. — 2008-10-21

The paper extends the framework of prices beyond the standard market setting to incorporate public goods and natural resources. These are settings where one does not usually think of market solutions. Core theory has established that price-taking behaviour by both suppliers and consumers, i.e. the absence of strategic considerations, greatly improves the informational value of prices, and hence of economic equilibria. This also holds when using market-like institutions to allocate resources for public goods. Policy effectiveness in many areas can be improved when agents are induced to reveal, voluntarily and truthfully, their willingness-to-pay or production costs.

Nutrition, obesity and health: policies and economic research challenges

Nayga, R. M. — 2008-10-21

This paper briefly covers some of the recent issues and policies related to nutrition, obesity and health. Some of the important economic research gaps, needs and challenges are then discussed focusing on few selected themes, namely the data needs, methodological and modelling challenges and policy evaluation issues. These research challenges, if addressed, could further enhance nutrition and obesity economic studies that can be used to design and implement effective policy interventions.

Economic development in emerging Asian markets: implications for Europe

Martin, W., Ianchovichina, E., Dimaranan, B. — 2008-10-21

The impacts of faster growth in China and India for Europe are analysed taking into account terms-of-trade effects, second-best welfare impacts and improvements in product quality and variety. More rapid growth in these giants could improve Europe's terms of trade, but second-best effects on energy markets could lower welfare unless these taxes are Pigovian. Whether growth arises from productivity or capital accumulation has important implications, with capital-driven growth involving higher energy and agricultural prices. When quality and variety growth are taken into account, the benefits to Europe are substantially greater. If agricultural protection in emerging Asia increases with growth, the impacts on Europe appear to be adverse but small.

Biotechnology and the development of food markets: retrospect and prospects

Moschini, G. — 2008-10-21

Biotechnology has had an important impact on the agricultural and food industries over the last 12 years by way of fast and extensive adoption of a few genetically modified (GM) crops. This has produced large efficiency gains, including higher yields and reduced costs of weed and pest control, as well as some environmental benefits. The expected development of crops with additional agronomic traits, and with output traits to improve the nutrition and health attributes of food products, holds the potential for even more pervasive impacts. Full realisation of such promises may require overcoming the constraining effects of restrictive GM product regulations.

Particular requirements for institutional analysis in nature-related sectors

Hagedorn, K. — 2008-10-21

Agriculture, horticulture, fishery and forestry are nature-related sectors that interact frequently with natural systems. This interaction represents a source of enforcement problems and transaction costs in the context of governing transactions. Institutional analytical frameworks used in agricultural economics should consider the particular properties of transactions involving natural systems. For ordering nature-related transactions, we propose a heuristic framework based on two dimensions: ‘modularity and decomposability of structures’ and ‘functional interdependence of processes’. It serves as a starting point for establishing a typology ranging from ‘atomistic-isolated transactions’ to ‘complex-interconnected transactions’. The complex process of institutionalising such transactions is decomposed into conceptual categories by means of a ‘transaction-interdependence cycle’.

Energy production with agricultural biomass: environmental implications and analytical challenges

Petersen, J.-E. — 2008-10-21

The paper reviews analytical challenges for assessing the environmental impact of bioenergy production in the context of global greenhouse gas emissions and global biofuel production targets. The main environmental issues associated with bioenergy production are briefly explained and used to describe different analytical approaches for assessing the environmental effects of bioenergy production. The paper discusses the relevance of suitable system boundaries in analysing the sustainability of bioenergy production. This includes the need for achieving coherence between several policy areas such as agriculture and food, energy and transport, climate and environment as well as international development. The review concludes with a range of research and policy challenges in the bioenergy field.