American Journal of Agricultural Economics最新文献

A warming climate expands the frost-free season, plausibly allowing for increased cropping intensity in temperate regions. This paper assesses the potential of multiple cropping to offset the projected negative effects of climate change on agricultural yields in the United States. We use cross-sectional variation in observed land cover, soil characteristics, and climate to estimate farmers' propensity to double-crop winter wheat with soybeans. Our estimates imply that under current economic conditions, a 3°C warming would result in an increase of 2.1 percentage points in the share of current soybean area double cropped, primarily driven by expansions in cooler regions. A fixed-effects panel model of county yields further indicates that yields of double-cropped soybeans are about 12% lower than those of single-cropped soybeans. Accounting for changes in cropping intensity and attendant effects on soybean yields, we project that at current prices, a 3°C warming would induce a shift in cropping intensity that increases revenue from soy systems by 1.3% overall, offsetting only a small fraction of the revenue impacts of predicted yield declines.

Nitrate pollution from agricultural production is a major threat to water resources worldwide. This study quantifies the consequences of groundwater nitrate pollution for the drinking water supply sector by estimating the effect of groundwater nitrate pollution on the costs of water utilities. In doing so, we contribute to the estimation of the external costs of agricultural nonpoint pollution associated with drinking water supply. Empirical evidence is based on fixed effects regressions using large panel data sets on water supply companies and groundwater sampling sites in Germany. Local nitrate pollution at the abstraction plant is approximated using spatial interpolation. Our findings reveal that water suppliers incur substantial costs through groundwater nitrate pollution in terms of increased treatment and total costs. The estimated cost elasticities range from 0.048 to 0.052 for treatment costs and up to 0.019 for total costs. For an average firm, these estimates imply annual increases in treatment and total costs of €39,000 and €116,000, respectively, for a 10 milligrams per liter increase in groundwater nitrate concentrations.

I examine the degree to which markets for cannabis are integrated using semiparametric models of spatial price linkages among US states. US attitudes toward the use of cannabis have evolved and, at the same time, laws restricting its use have been eliminated in many states. Cannabis presents the case of a unique commodity for which any interstate trade is explicitly illegal. A voluminous empirical literature has examined spatial arbitrage, trade, and market integration. Most of these studies utilize linear time series regression models. More recent work has considered increasingly more nonlinear models of market integration. I utilize fully nonlinear semiparametric generalized additive models to evaluate the spatial integration of US cannabis markets. The results confirm important nonlinearities in price relationships. Nonlinear price transmission elasticities are derived from the nonparametric modeling results. The results suggest that California cannabis markets are largely integrated with states across the nation. I find that California, which is a leading cannabis exporter, plays a price leadership role. Production of cannabis in California far exceeds the amount that can be legally grown and sold, and much of this cannabis is exported to other states. Colorado, a second primary cannabis market, generally operates in isolation from cannabis markets in other states. The likely mechanism integrating cannabis markets is the thriving trade in illegal cannabis, which has long preceded recent state-level legislative actions that have legalized cannabis use.

Seed innovation is one major factor for improving agricultural productivity. For some self-pollinated varieties, such as wheat, farmers have the option to buy certified seed from seed dealers or to use their own farm-saved seed. Historically, farmers could use farm-saved seeds for free, which led to reduced incentives to innovate for private breeding companies. In recent decades, several countries have established different royalty systems for farm-saved seeds to favor research investment. We developed a theoretical model to compare these different systems. We compared six stylized systems by analyzing their impact on incentives to innovate, as well as production efficiencies at both the seed and agricultural production levels. Our findings indicate that royalty systems allowing for a certain proportion of farm-saved seeds result in improved welfare. The systems that lead to the highest total welfare levels are those in which the royalty level on farm-saved seeds is regulated. This includes systems where the royalty is either directly defined by a regulator (as in the French or UK systems) or imposed to match the royalty level of the certified seeds (as in the Australian system). The Australian system performs better under high research costs. Conversely, under low research costs, the best system is either the French or the UK system, depending on the relative cost of producing farm-saved seeds versus certified seeds. In conclusion, it is possible to design efficient royalty systems to create and produce innovation, in a context where farmers can self-produce this innovation.

Greater adoption of renewable energy technologies by households is a key component of decarbonization and energy transition goals. Although existing literature has examined how sociodemographic characteristics, “green” preferences, and peer effects impact adoption of new energy technology, the role of behavioral preferences has not been adequately studied. In this paper, we examine the effect of two types of behavioral preferences, namely the degree of risk tolerance (risk preference) and attitude toward delayed reward (time preference) on the contract decision to lease or own a solar photovoltaic (PV) system. We develop a theoretical framework to show that the effect of risk and time preferences on the relative utilities from the two contracts is monotonic: Lower risk aversion and lower discount rate (more patience) imply a higher chance of solar PV ownership. To test these predictions empirically, we first estimate preference parameters (risk aversion and discount rate) from laboratory data collected from solar PV adopters. We then combine the parameter estimates with data on actual solar PV contract choice to examine the relationship between solar PV adopters' time and risk preferences and their lease-versus-own choice. Our regression results confirm that less risk averse individuals have a higher tendency to choose the ownership option, whereas more patient individuals are (weakly) more likely to own their solar PV systems. These findings contribute to a greater understanding of the role of behavioral factors in household decisions related to energy technologies.

Reducing animal-based food production would not only reduce agricultural greenhouse gas emissions but also free land that could sequester carbon. We examine the efficiency of a subsidy to cattle farmers for setting aside land for natural ecosystem regeneration. We develop a partial equilibrium model of the cattle sector that integrates land use, greenhouse gas emissions, and animal feeding. We compare the subsidy to alternative policies: a meat tax and a standard on animal feeding. We identify the conditions under which the subsidy is the best alternative to these other second-best policies. The efficiency of the subsidy lies in its effects on both the extensive margin (reduced quantity of meat) and the intensive margin (production intensification, which reduces both the emission and land-use intensities of meat). An empirical application to France, where spontaneous regeneration corresponds mostly to forest regrowth, shows that the subsidy dominates the other alternative policies considered for a wide range of parameter values but is sensitive to carbon leakage when the economy is open to trade.

Nonreciprocal trade preference (NRTP) programs have proliferated in recent decades as a means to facilitate export-led growth for beneficiary countries. However, evidence on the efficacy of NRTPs in promoting agricultural exports from preference beneficiaries to preference donors has been mixed. We investigate the impacts of NRTPs on such trade in a structural gravity setting for 23 major agricultural commodities prominent in the export baskets of developing countries. Based on estimates from a commodity-level gravity model and the structural foundation of the gravity framework, we quantify the trade impacts of NRTP programs in a counterfactual simulation analysis. Our results show that NRTPs were responsible for around $833 million in elevated annual exports (a 1.7% increase) from NRTP beneficiary countries to donor countries as of 2018, and we document considerable heterogeneity in the countries and commodities that undergo the largest impacts. Our findings thus highlight the evolving role of trade policy as a facilitator of export-driven growth and suggest that NRTP programs are often limited in their capacity to promote agricultural trade.

It is not clear, a priori, whether a centralized or decentralized institutional arrangement is better at providing public goods. This study investigates how decentralization of regulatory authority affects public good provision, focusing on food safety. Using a natural experiment that transfers food safety regulatory authority over the food processing and manufacturing sector from provincial to city-level governments, we find a 51% decrease in the average number of food safety incidents within cities that experienced the decentralization reform. Decentralization reduces food safety incidents by rectifying information asymmetry in food safety regulations and by increasing local food safety laws and regulations. Additional analyses show that decentralization primarily improves the food safety of larger and more experienced firms, and it has not harmed the total revenue of large-scale food processing and manufacturing firms. Our study demonstrates the importance of information available to regulatory authorities in food safety regulation and highlights the role of local information in the decentralized provision of public goods.

Farmers make production decisions despite future output price uncertainty. As a result, farmers' expectation of future output price is an important determinant of investment and the supply of commodities. However, our understanding of the process by which farmers form their expectations is still limited. This study uses direct measures of farmers' financial condition expectations collected through the Purdue University–CME Group Ag Economy Barometer to measure the effect of surprise information on farmers' short- and long-term expectations. The effect is identified using an event study framework previously used to examine the impact of market information on commodity futures markets. Using ordered logistic regressions and variation between professional and United States Department of Agriculture forecasts of corn ending stocks, we demonstrate that farmers' short-term expectations of the financial condition of the broader agricultural economy is altered by surprise information. This study provides a novel step toward understanding the process by which farmers incorporate new information in their price expectations. For example, our findings suggest that farmers perceive short-term corn market information surprises will affect the U.S. agricultural sector to a greater degree than their farm. Additionally, farmers do not perceive that short-term corn market information surprises will carry long-term implications.

This paper examines the responses of chicken producers to public disclosure of quality information (or categorization) regarding Salmonella in chicken carcasses. Producers exert effort to attain better categorization and shirk when failing to meet the thresholds required for better categorization. Public disclosure reduces this shirking effect. However, some producers shirk even under public disclosure when the threshold for disclosure is too stringent. The results suggest that the most effective quality disclosure policies would either disclose continuous (noncategorical) information or impose fines or other sanctions on producers attaining the poorest quality.