Issue
Volume 49, Issue 1, January 2024
This study estimates changes in productivity and profitability and their respective components for two major Indian pulse crops, pigeon peas and chickpeas. Results show that average profitability declined during the period under consideration (2009–2014) for both pulse crops. Lower profits are driven by increases in input prices and decreases in total factor productivity, output growth, and output (constant) prices. The reduction in total factor productivity is primarily due to a slow increase in output. Finally, the technical efficiency estimates are lower than for cereal crops like rice and wheat: 72% for chickpeas and 71% for pigeon peas.
The social license between the US public and food producers has grown increasingly complex, especially as it relates to the treatment of farm animals and workers. In this study, we employ two best–worst-scaling experiments to elicit the public’s preferences regarding animal and worker welfare farm practices within the dairy and poultry industries. Using a latent class modeling approach, we find that US consumers generally value animal welfare practices more than they value worker welfare practices. However, population subgroups with strong preferences for worker welfare practices exist, primarily among older, highly educated, Democrats living in the Northeastern United States.
This study introduces distribution-free methods to estimate interval-censored willingness-to-pay (WTP) models. The approaches proposed encompass the recovery of WTP values using an iterated conditional expectation procedure and subsequent estimation of the mean WTP using parametric and nonparametric models. Methods allow us to estimate the effects of covariates on the mean WTP and the underlying probability distribution. We employ Monte Carlo simulations to compare the performance of the estimators proposed against standard parametric and nonparametric estimators. We illustrate the estimation techniques by assessing producers’ WTP for services provided by an e-marketing website that helps connect farmers with local consumers.
While markets for agricultural commodities are often global, markets for cropland can be highly localized. Soil makeup and climate also tend to make farmland rental markets localized. This study compares several econometric models to measure the extent of spatial spillovers within these markets. A fully dynamic spatial model estimated on cropland transactions shows that sales are highly localized in the short term but face greater neighboring spillovers in the long term. Accounting for longer-term spatial interdependence of farmland markets can help to improve land value forecasts.
By Key, Nigel
Propensity score matching is used to estimate how direct-to-consumer (DTC) marketing influences farm survival and growth over 5-year periods. Results show that beginning farms with DTC sales grow more slowly but are more likely to survive in business compared to similar farms without DTC sales. The study finds that DTC marketing is associated with lower financial performance and a greater likelihood of facing borrowing constraints, which might help explain the slower farm growth. DTC marketing is also associated with lower farm income volatility, which might help explain the higher survival rate.
We study the adoption of a new pesticide-free wheat production system in Switzerland. Large-scale transitions to such production systems have implications for the entire agricultural and food sector. Using survey data from 1,073 Swiss wheat producers, we empirically test whether risk preferences and risk perceptions in four domains relate to farmers’ decisions whether and when to adopt pesticide-free production. We observe heterogeneity in farmers’ risk perceptions (e.g., early versus late adopter) and find that farmers’ risk preferences—as well as their perceptions of production and institutional risk—are related to adoption behavior rather than to perceived market and investment risks.
The pain of payment—a negative feeling consumers experience during the process of paying for a good or service—can reduce access to the veterinary services market. We examine the potential of payment plans to reduce pain of payment among pet owners from a theoretical and empirical perspective. We find that payment plans reduce pain of payment by decreasing the price and income effects of purchasing veterinary services. An important, additional finding is that some consumers discount the payment plan option. We suggest that payment plan options should be carefully considered for different groups of consumers.
The European fruit and vegetable (F&V) trade regime is regulated by the Entry Price System (EPS), a nontariff measure on imported goods. We investigate the trade effects of the EPS by estimating a structural gravity model for the major European suppliers of apples, lemons, oranges, peaches, pears, table grapes, and tomatoes. We assess how imports react to EPS overshoots, and price dynamics. The EPS limits imports, but marked differences exist across products. The efficacy of the EPS is valid for all products; its effectiveness is found only for less perishable F&Vs.
The Russian invasion of Ukraine disrupted grain flows from that region. As a result of the invasion, Ukraine has evolved from a country with some of the lowest logistical costs in the world to having the highest logistical cost. This paper’s purpose is to analyze the effects of the Russian invasion on the logistical functions and the costs for corn exports from Ukraine and its competitors using an optimized Monte Carlo simulation model. Most important are the effects of the radical increase in shipping costs from Ukraine, reduced port capacity and export supplies.
The stocker industry plays numerous critical roles in the cattle industry and is the most flexible—yet complicated—segment of the beef supply chain. Stocker producers’ calf-purchasing decisions have historically been diverse and difficult to characterize. This study uses data from a unique survey to analyze factors affecting stocker producers’ calf-purchasing decisions. Latent class analysis is used to classify stocker producers into subgroups based on cattle-purchasing preferences. Results indicate that stocker producers can be divided into four distinct latent classes according to calf-purchasing preferences.