Heterogeneous and conditional returns from DT maize for farmers in Southern Africa

This paper assesses the relative advantage of drought-tolerant (DT) maize, conditional on drought severity, using an unbalanced panel of 4 years of on-farm yield trials and high-resolution precipitation data (10-day measurements at a 0.05° resolution) in Malawi, Zambia, Mozambique and Zimbabwe. Under rain-fed conditions, DT maize yield exceeds that of other varieties: 7 per cent higher yields on average and 15 per cent higher yields under moderate drought stress. While this contrasts with higher estimates measured in controlled trials, it nonetheless represents an economically significant advantage. This study further measures heterogeneity in the relative advantage conditional using conditional quantile analysis.

Is the local wheat market a ‘market for lemons’? Certifying the supply of individual wheat farmers in Ethiopia

Bulking and mixing of smallholder supply dilutes incentives to supply high quality. We introduce wheat ‘grading and certification shops’ in Ethiopia and use an auction design to gauge willingness-to-pay (WTP) for certification. Bids correlate positively with wheat quality, and ex ante notification of the opportunity of certification improves wheat quality. These findings suggest that local wheat markets resemble a ‘market for lemons’, crippled by asymmetric information. However, aggregate WTP for grading and certification services does not re-coup the sum of fixed, flow and variable costs associated with running a single certification shop.

African trade of mangoes to OECD countries: disentangling the effects of compliance with maximum residue limits on production, export supply and import demand

This article theoretically and empirically disentangles the effects of maximum residue limits (MRLs) for pesticides on production, export supply and import demand. We adopt a modelling approach based on the costs and benefits associated with food safety standards and use our theoretical framework to assess the empirical net effects of MRLs for pesticides on African mango production and trade with Organisation for Economic Co-operation and Development (OECD) member countries. On the one hand, we theoretically highlight that for a given production technology and a level of elasticity of production costs with respect to the MRL gap, producers will likely (probability and quantity) produce standard-compliant products if they are able to completely pass through the standard-compliance costs to the unit price they receive from exporters; otherwise, they will exit standard-compliant products market. On the other hand, we theoretically show that the net effects of the MRL gap on bilateral trade can be positive, zero or negative depending on the effects of consumers’ perceived quality (positive), trade costs (negative) and standard-compliant production cost (negative). We use a cross-sectional data set for 12 African countries that produced and exported MRL-compliant mangoes to 31 OECD countries in 2016. On the one hand, we find that the net effect of MRLs is positive for the level of standard-compliant mango production and negative for the probability of producing. On the other hand, they are positive in mango trade between African and OECD member countries. Our results highlight that the tightening or imposition of strict MRLs for pesticides in developed countries may be trade promoting, while they severely impede production in African countries.

Measuring the synchronisation of agricultural prices: co-movement of cycles in pig and cattle prices in Brazil, Chile and Uruguay

Simultaneous spikes in global prices of many agricultural commodities in recent years have induced an interest in quantifying the degree of synchronisation of these movements. We suggest a conceptual framework explaining why temporally varying price synchronisation may happen and propose the concordance index for the empirical measurement of the incidence, symmetry and permanence of synchronisation. We establish that the index generates insights into time series dynamics which are complementary to those obtained from cointegration analysis. We illustrate the approach with an application for the co-movement in cyclical components of pig and cattle prices in three Latin American countries. The findings reveal moderate synchronisation levels which show asymmetric instabilities.

A meta-analysis of the capitalisation of CAP direct payments into land prices

The impact of the European Union common agricultural policy direct payments on land prices has received substantial attention in recent years, leading to heterogeneous evidence of capitalisation for both coupled and decoupled payments. In this paper, we provide an extensive review of the empirical works addressing this issue econometrically and compare their results through a Bayesian meta-regression model, focussing on the impact of decoupling and its implementation schemes. We find that the introduction of decoupled payments increased the capitalisation rate, although the extent of this increment hinges on the implementation scheme adopted by the member state.

Early exit from business, performance and neighbours’ influence: a study of farmers in France

This article investigates the effects of economic performance and neighbours’ characteristics on farmers’ exit behaviour before retirement age. Using a unique set of social security data describing all French farmers under 50 over the years 2004–2017, we explore how these effects depend on farmers’ characteristics and how they stand relative to their neighbours. Our probit estimations reveal that younger farmers and farmers operating smaller farms are more sensitive to their own and neighbours’ performance than other farmers. Allowing for an asymmetric comparison effect between farmers and their neighbours, we uncover a nonlinear influence of own and neighbours’ profit and size.