Year
2000
A computable general equilibrium model of the southeastern Colorado economy is used to compare the economic impacts of a proposed increase in reservoir storage to an alternative: temporary water transfers. While both provide municipalities with reliable water supply during droughts and are shown to benefit both rural and urban communities, temporary transfers are accomplished at a much lower economic and environmental cost. This analysis illustrates how computable general equilibrium models provide a more realistic portrayal of the impact of policy changes than input-output analysis by allowing substitution in response to economic conditions.
Current country-based group crop insurance, i.e., Group Risk Plan (GRP), is not an effective risk-reducing tool in counties where natural conditions are different across the area. Using only the historical yield information, a statistical approach is developed to group farmers by their yield similarity rather than linking them based on their association with a particular county. The cases of Washington State wheat farms and Iowa corn farms are the focus of this investigation. Sub-county or cross-county zones (clusters) are identified, and each farm is classified into a cluster where individual farm identification remains unknown. To improve risk-management and cost effectiveness of the crop insurance instrument, we propose implementation of zone-based GRP as a substitute for county-based GRP, where homogeneous zones rather than county boundaries are used for indemnifying yield.
Nevada ranks third in the world in gold production. In order to operate the massive open pit gold mines, the State of Nevada granted mining companies a temporary permit to pump groundwater from near the open pits and dispose of it. Certain instream flows have nearly doubled relative to average historical flows in recent years. Following pit closure, surface flows will likely decline from historical levels. This study measures the impacts of these changing water supplies on downstream agricultural and recreational users. We argue that the creation of temporary changes in water rights for the downstream users would likely mitigate future losses both groups are expected to experience.
Logit and ordered probit analyses were used to identify factors associated with reduced tillage adoption, continuous spring cropping, and the number of changes made in response to wind erosion. Contrary to previous results for water erosion control, simple perception of a wind erosion problem or membership in a particular socioeconomic category did not significantly explain adoption of wind erosion control practices, but participating in a targeted educational program did. This educational program: (a) highlighted the threats of wind erosion to human health and to soil productivity, and (b) described specific potentially profitable farming practices for solving the wind erosion problem.
Surprisingly, investigations of adverse selection have focused only on farmers. Conversely, this article investigates if insurance companies, not farmers, can generate excess rents from adverse selection activities. Currently political forces fashioning crop insurance as the cornerstone of U.S. agricultural policy make our analysis particularly topical. Focusing on El Nino/La Nina and winter wheat in Texas, we simulate out-of-sample reinsurance decisions during the 1978 through 1997 crop years while reflecting the realities imposed by the risk-sharing arrangement between the insurance companies and the federal government. The simulations indicate that economically and statistically significant excess rents may be garnered by insurance companies through weather-based adverse selection.
This section includes: JARE Editor’s Report, September 2000; Reviewers, August 1999-August 2000; WAEA 1999 Award Winners; WAEA Past Presidents, 1927-2000; Past Editors; JARE Author Index, Volumes 23-25, 1998-2000; JARE Key Words Index, Volumes 23-25, 1998-2000; Author Guidelines for Submitting Manscripts to JARE; Membershp Information; Back Cover
Previous research on farm labor demand is reviewed to empirically explore what has been learned over the past 50 years. Following the example of Hamermesh, studies were differentiated by numerous factors. A meta-regression analysis of estimated demand wage elasticities was conducted to more clearly identify any systematic factors that influence such estimates. Results of the analysis show that the magnitudes of own-price demand elasticities are affected by differences including type and area of labor market, methodology, and the time period covered by the data. Understanding variations due to model specification is important when interpreting current and future agricultural labor and policy research.
By Ker, Alan P.
As traditional forms of agricultural protection continue to decline, agricultural interests will likely seek alternative protection in the form of technical barriers. A flexible framework for theoretically and empirically analyzing technical barriers under various sources of uncertainty is derived. Attention is focused on uncertainty arising from the variation in the product attribute levels, a source not yet considered by the literature. Ex ante and ex post densities of domestic and international quantities and prices as well as the densities of their respective extreme-order statistics are derived. An example is presented to illustrate the application of the developed framework.
Using measures of allocative, technical, and overall efficiency as indicators of a latent “performance” variable, and a set of farm operating ratios as indicators of the amount of effort to improve the quality of feeding, breeding, and labor productivity, we employ a multiple-indicator, multiple-cause (MIMIC) model of Alberta dairy production to determine the factors that contribute to economic performance. Gains in performance may be made through increased milk yield, herd size, breeding program quality, and labor quality, but not by operator experience or increased expenditures on feeding programs. Consequently, the industry trend toward larger dairy herds may indeed improve the economic performance of dairy operators.
We develop a dynamic soil quality model to evaluate optimal cropping systems in the northern Great Plains. Modeling soil quality attributes is feasible, and attribute model results apply to a wide range of soils. A crop production system with continuous spring wheat and direct planting is the most profitable system. This system has low soil erosion and high quality attributes, indicating the benefits of increased soil quality exceed the higher maintenance costs. On-site value of additional soil organic carbon (OC) ranges from $1 to $4/ton OC/hectare/year. These values for soil OC impact the optimum tillage practice, but not the crop rotation.