Canadian Journal of Agricultural Economics-Revue Canadienne D Agroeconomie最新文献

The paper presents a model to study reverse auctions for conservation contracts. A buyer elicits bids from multiple rent seeking and risk averse farmers. Conservation activities have ex post cost risk such that farmers only learn the true value of conservation contracts after the auction. The paper derives the optimal bidding function and shows that farmers have conflicting incentives when facing multiple sources of risk. Specifically, we show that farmers exhibit a form of precautionary bidding, that is, they increase their bids in response to an increase in valuation risk. We propose an approach to take the model to the data and recover structural risk parameters. The suitability of the approach to real-world data is demonstrated through a Monte Carlo experiment.

We offer a descriptive analysis of the complexities surrounding food price inflation in Canada three years after the outbreak of COVID-19. The Consumer Price Index and its food component have registered significant shifts since 2020 and remain elevated. This behavior is influenced by international dynamics, such as the conflict between Russia and Ukraine and the consequent commodity price surges, and domestic factors, including grocery market concentration. As external events interact with local policies, business practices, and the structure of the food retail industry, debates around market competition intensify. We posit that while the influence of international factors on local prices is undeniable, fostering domestic grocery competition remains crucial. At the same time, managing expectations of major price reductions in a small open economy like Canada's is important. In addition, we discuss some of the research and data needs that have become salient during the current inflationary episode.

Growth in agricultural total factor productivity (TFP), which explains most of the long-term growth in U.S. agricultural output, may be slowing. The Economic Research Service (ERS) of the USDA is confident that current levels of below-average growth will eventually regain the long-term trend line. Others disagree, arguing instead that due to declining public expenditures on agricultural research, TFP growth experienced a downward and seemingly permanent structural shift about 30 years ago. In this paper, I argue that neither perspective is accurate since agricultural TFP is best modeled as a random walk with drift and thus not governed by a deterministic trend line. When I use a first difference model to accommodate the unit root, I do not find a structural break in the rate of drift. However, I acknowledge that this finding may not be general because I show that my test for a structural break has low power. To add theoretical relevance, I develop a simple model of stochastic innovation and farm technology adoption, and then use simulation results from my model to explain why a random walk for agricultural TFP is a theoretically sound proposition.

While carbon offsets in agriculture can play a role in addressing climate change, they are not a perfect substitute for direct emission reductions. As shown in this paper through various arguments and case studies, climate policies in Canada have avoided the use of offsets to be sold in carbon markets, preferring instead to incentivize adoption of best management practices (BMPs) that provide environmental benefits along with climate mitigation benefits. We argue that this is a preferred policy option due to the perils and pitfalls inherent in the measurement and monitoring required to identify offset credits. While an appropriate approach might be to penalize Canadian farmers for any emissions their activities cause, this may do more harm than good. Canadian agricultural production is highly efficient and technologically advanced; therefore, reductions in Canada's contribution to the global food supply will result in less-efficient production occurring elsewhere (i.e., leakage) that increases global greenhouse gas emissions.

This study investigates the ex-ante effects of the front-of-package (FoP) nutrition labeling for food products high in saturated fat, sugar, and/or sodium, which is a new regulation recently announced by Health Canada to combat obesity. The Canadian food industry has until January 1, 2026, to comply with the new regulations. To examine the ex-ante effects of this policy, an incentivized experiment is conducted in a lab that replicates a grocery store. The results at the product level indicate a significant decrease in the probability of choosing a product with a “high in” label compared to those without “high in” labels. Basket-level results demonstrate that FoP labeling is significantly associated with a lower quantity share and dollar value share of products high in one of the mentioned nutrients selected in a grocery basket, as well as fewer grams of sugar and sodium in a grocery basket. Furthermore, the study reveals that individuals with higher educational attainment, a risk-averse nature, and a lower level of self-reported nutrition knowledge tend to react more to the labeling. The insights from eye-tracking data further support these results, revealing that product choices are deterred by a fixation on “high in” labels. This study contributes to an improved understanding of the pathway in which labeling schemes influence food choices.

Recent Canadian preferential trade agreements (PTAs) include increased market access for imports of supply-managed products (dairy and poultry). Such agreements are typically expected to create trade flows and increase supply of relatively low-priced products in Canada. Industry groups representing Canadian producers and processors of supply-managed products negotiated to receive approximately C$5 billion in payments from the federal government as compensation for the prospects of facing more international competition and reduced domestic sales. We discuss partial-equilibrium simulation models that are commonly used by academics and governments to project market effects of new trade agreements, and conceptually illustrate how different assumptions about import supply conditions generate different projected market outcomes. We focus on the quota fill rates of new access commitments—most studies, including those used to inform government policies on compensation payments, assume imports increase in an amount equal to new commitments. This is often not the case, including with recent Canadian trade agreements. We apply a conceptual framework to Canada's supply-management industry by re-simulating a quantitative model of the Canadian dairy industry with updated information on implementation and quota fill rates. Projected market effects of trade agreements under the assumption of full import quotas are markedly different from projections that account for unfilled quotas. We discuss the political economy and welfare implications of compensation payments in light of our analysis.

Credence attributes such as environmental impact, origin, fairness/unfairness, and food safety/health are not available with certainty prior to or at the time of the consumer purchase decision. This creates a problem of imperfect or asymmetric information, leading to suboptimal supply and demand for products with these desirable attributes. Using a representative sample of 2001 Canadian consumers, we adopt, within an attribute-based decision-making framework, the asymptotically efficient double-bounded stated preference approach, to estimate Canadian consumers' willingness to pay for origin, fairness, environmental impact, and food safety attributes associated with pork chops and fresh apples. We find that, on average, consumers are willing to pay significantly more for pork chops and fresh apples that are farmers-advantaged, sourced from their own province, grown or raised under a production system designed to be environmentally sustainable, and chemical-free. However, these findings differ significantly by the province of origin, gender, age, and income of the respondents, as well as by product type and attributes being valued.

Reducing land fragmentation can theoretically curb cropland abandonment, thus ensuring food security. However, few studies have quantified this relationship using large-scale survey data at the household level. This study adopts a two-way fixed-effects (TWFE) model to examine the effect of land fragmentation on cropland abandonment using nationally representative panel data from the China Rural Household Panel Survey (CRHPS). The panel data set contains 15,138 households across 29 provinces in 2017 and 2019. We find that land fragmentation has a significant and positive relationship with cropland abandonment. The mechanism analysis reveals that this relationship is due to high labor costs and difficulties in renting out the fragmented land. The heterogeneity analysis indicates that farmers with poor human capital and those living in non-plain areas are at a higher risk of abandoning their cropland due to land fragmentation. Furthermore, the association between land fragmentation and cropland abandonment tends to vary across different land rent-in scenarios. For instance, an increase in the number of plots in the case of land rent-in is not necessarily associated with cropland abandonment. These findings are conducive to correcting the underestimation of the role of land fragmentation in cropland abandonment, and their implications may be extended to various countries.

In Tables 3 and 4 and Appendix Table A1, A2, and A3 we have removed the co-headers row that indicates Annual and Monthly. This row is not meant to be there for these tables. We have now removed the row, and the updated table is as follows: https://doi.org/10.1111/cjag.12299

The author apologizes for this error.

Sequestering carbon in forest ecosystems is important for mitigating climate change. A major policy concern is whether forests should be left unharvested to avoid carbon dioxide (CO₂) emissions and store carbon, or harvested to take advantage of potential carbon storage in post-harvest wood product sinks and removal of CO₂ from the atmosphere by new growth. The issue is addressed in this paper by examining carbon rotation ages that consider commercial timber as well as carbon values. A discrete-time optimal rotation age model is developed that employs data on carbon fluxes stored in both living and dead biomass as opposed to carbon as a function of timber growth. Carbon is allocated to several ecosystem and post-harvest product pools that decay over time at different rates. In addition, the timing of carbon fluxes is taken into account by weighting future carbon fluxes as less important than current ones. Using simple formulae for determining optimal rotation ages, we find that: (1) Reducing the price of timber while increasing the price of carbon will increase rotation age, perhaps to infinity (stand remains unharvested). (2) An increase in the rate used to discount physical carbon generally reduces the rotation age, but not in all cases. (3) As a corollary, an increase in the price of carbon increases or reduces rotation age depending on the weight chosen to discount future carbon fluxes. (4) Site characteristics and the mix of species on the site affect conclusions (2) and (3). (5) A large variety of carbon offset credits from forestry activities could be justified, which makes it difficult to accept any.