Volume 42, Issue 3, September 2017

September, 2017

Additionality in Grassland Easements to Provide Migratory Bird Habitat in the Northern Plains

By: Claassen, Roger; Savage, Jeff; Loesch, Chuck; Breneman, Vince; Williams, Ryan; Mulvaney, Bill; Fairbanks, Tammy
Native grassland in the Prairie Pothole Region (PPR) is important habitat for migratory birds, particularly ducks. Much of this grassland is at risk for conversion to cropland. Permanent easements, managed by the U.S. Fish and Wildlife Service, protect high-quality habitat but do not currently consider vulnerability to cropland conversion. We find that (i) grassland easements are protecting native grassland from conversion, although the level of protection is modest; (ii) it may be possible to increase habitat protection by targeting grassland that is vulnerable to cropland conversion; and (iii) conversion estimates that fail to account for easements are biased downward.
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September, 2017

Food Access, Food Deserts, and the Women, Infants, and Children Program

By: Wu, Qi; Saitone, Tina L.; Sexton, Richard J.
We examine the shopping behavior of Women, Infants, and Children (WIC) Program participants located in food deserts in the Greater Los Angeles area relative to peers in GLA located outside of food-desert boundaries. Results indicate that food-desert participants traveled slightly farther to shop than comparison participants. However, food-desert and non-food-desert participants were equally likely to visit multiple vendors and to visit a supermarket vendor. Food-desert participants did not pay more for program foods relative to comparison participants. On balance, the results indicate that WIC shopping behavior is very similar among food-desert and comparison participants.
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September, 2017

The Role of Income in Explaining the Shift from Preserved to Fresh Vegetable Purchases

By: Ferrier, Peyton M.; Zhen, Chen
Between 1991 and 2013, the share of fresh vegetables consumed rose from 47% to 56%. While median incomes grew 7.9%, the growth was uneven, with negligible growth occurring in the bottom two quintiles. Estimating an EASI demand system for fresh and preserved vegetables that accounts for corner solutions, we find that income elasticities are larger for fresh vegetables than for preserved vegetables for consumers in the top three but not the bottom two income quintiles. Simulations accounting for uneven income growth indicate that income growth accounts for 0.7 percentage points of the 9 percentage point increase in fresh share.
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September, 2017

The Trade and Health Effects of Tobacco Regulations

By: Galinato, Gregmar I.; Olanie, Aaron Z.; Yoder, Jonathan K.
We examine how cross-country differences in tobacco regulations affect tobacco imports and consumer health. We find that tobacco imports increase when a rich exporter’s tobacco regulations are stringent relative to the regulations of its poor importing trade partner. The main policy driver may be differences in marketing and counter-advertising tobacco regulations between trading partners. If a rich exporting country adopts counter-advertising tobacco regulations, mortality and morbidity from tobacco-related diseases in the poor importing country increase by four and eighty smokers per million people annually, respectively. Our results highlight the importance of accounting for spillovers in an increasingly multilateral economy.
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September, 2017

Quality, Sourcing, and Asymmetric Exchange-Rate Pass-Through into U.S. Coffee Imports

By: Anders, Sven; Fedoseeva, Svetlana
Few studies to date have investigated the extent of linkages between long-run asymmetries in bilateral trade and fluctuations in real exchange rates and importer demand in non-oil commodity markets. This paper generates estimates of trade elasticities in U.S. raw coffee imports, applying a nonlinear autoregressive distributed lag model and explicitly testing the extent to which nonlinearities matter to U.S. commodity sourcing in the short and long run. Models with asymmetries in both exchange rates and U.S. income point to the critical role that asymmetric pass-through plays in explaining long-run dynamics in U.S. import trade for a major commodity supply chain.
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September, 2017

Challenges to Farm Produce Marketing: A Model of Bargaining between Farmers and Middlemen under Risk

By: Ranjan, Ram
We present a model of bargaining between farmers and middlemen in which long-term risk considerations by farmers constrain their ability to engage in hard bargaining. In order to avoid the risk of middlemen exiting their region in the future due to hard bargaining, farmers settle for lower prices for their produce. The risks of prolonged drought-induced decline in produce quality and future oversupply of the perishable agricultural commodity also result in lower price outcomes under bargaining. If farmers join a collective that enhances their bargaining power, they tend to be better off when the group is homogeneous.
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September, 2017

Managing Catastrophic Risk in Agriculture through Ex Ante Subsidized Insurance or Ex Post Disaster Aid

By: Bulut, Harun
We consider a political economy in which government cares about risk-averse farmers’ loss of income but incurs political cost if it provides monetary support to farmers. Farmers’ expectations of government disaster aid and overconfidence (optimism bias) regarding their risk prevent farmers from purchasing full insurance under actuarially fair rates. Considering this conclusion, government prefers to subsidize farmers’ purchases of insurance ex ante rather than solely relying on disaster aid ex post. The resulting subsidy rate depends on the political environment, the degree of systemic risk, the distribution of farmers’ risk preferences, and the nature and distribution of farmers’ risk perceptions.
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September, 2017

Determinants of Effective Beginning Farmer Programming and Implications for Future Programs

By: Jablonski, Becca B.R.; McFadden, Dawn Thilmany; Sullins, Martha; Curtis, Kynda R.
This research explores the determinants of effective beginning farmer programming and implications for emerging and established programs. We use responses from 100 interviews with participants in the Building Farmers in the West Program, one of the longest-standing beginning farmer training programs in the United States, to understand how key course principles predict improved farm profitability. Results show that specific production changes after taking the course—including the number of cultivated varieties (negative), number of farm enterprises (positive), and length of production season (positive)—are correlated with improved farm profitability. We make recommendations for future beginning farmer programming based on these results.
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