Ricardo\u27s Theory of Profit and the Third Edition of the \u3cem\u3ePrinciples\u3c/em\u3e

David Ricardo\u27s “On Machinery” chapter continues to interest theorists and historians of economic thought (Blaug 1958, Hollander 1979, Kurz 1984, Samuelson, 1988, 1989, Morishima 1989, Negishi 1990). Yet the addition of the chapter to the third edition of Ricardo\u27s Principles of Political Economy and Taxation arguably overturns much of the view for which Ricardo is so well known (Davis 1989). In the added chapter Ricardo allows, contrary to his original view in the first two editions, that the introduction of machinery is indeed injurious to the class of laborers. More interestingly, because machinery substitutes for labor, wages cannot rise and profits are no longer threatened by rising rents. Effectively the contest between capitalists and landlords of the first two editions of the Principles is replaced in the final edition by one between capitalists and laborers. However, not only does the “On Machinery“ chapter substantially change the distributional argument customarily attributed to the Principles, but it also permits an examination of Ricardo\u27s thinking about distribution in two distinct, but related frameworks. The discussion here compares the distributional analysis in the first two editions with that of the third to explain the general nature of the Ricardo\u27s theory of profit. It does so by providing a novel interpretation of Ricardo\u27s characterization of profit as a residual, and by emphasizing the historical context in which distribution occurred in the beginning of the nineteenth century

Production Effects of Agri-environmental Policy Measures: Reconciling Trade and Environmental Objectives

In addition to generating commodity outputs, agricultural production activities affect water, air, and soil quality, influence eco-systems and biodiversity, and shape rural landscapes. Many of these environmental effects exhibit the characteristics of negative or positive externalities or public goods, for which private markets do not exist or are poorly functioning. OECD countries implement a variety of agri-environmental policy measures with the aim of addressing the environmental effects associated with agricultural production. Policy measures include regulations and taxes to contain or prevent environmental harm, information and training programmes to promote environmentally friendly farming practices, and payments that remunerate farmers for environmental services they provide. Over the past 10-15 years, the scope and complexity of agri environmental policies has increased, not least because of growing concerns of society for the state of the environment. In parallel to the rising importance of agri- environmental considerations, agricultural trade policy reforms, in particular through policy changes following the Uruguay Round Agreement on Agriculture, have gradually opened domestic agricultural markets to international competition. Trade barriers, export subsidies, and domestic support have been bound and are being scaled down. In this context of greater international interdependence, there are two related policy debates on the possible impact of environmental standards, programmes, and payments on agricultural production and trade. The first is concerned with the impact of differences of agri-environmental regulations among countries on agricultural production costs and farm competitiveness, and the second with the issue whether and to what extent domestic agri-environmental policies influence international trade. The two policy debates do not have the same prominence in all OECD countries, and in some countries the underlying issues are seen to be of no relevance at all. Yet, the discussions have the potential to influence negotiations on agricultural trade and the environment at the international level. This paper examines several related questions: What are the effects of agri environmental policy measures on agricultural trade? To what extent do agri environmental regulations influence farming costs and international competitiveness? Would an international harmonisation of agri environmental policies increase welfare? Which characteristics might policy measures have to possess in order to be considered minimally trade distorting?Trade and environment, regulations, payments, competitiveness, harmonisation, WTO green box

The Farm Business Environment and New Generation Cooperatives as an Innovation Strategy

Agribusiness,

Agroindustrialization through institutional innovation

Some small-holders are able to generate reliable and substantial income flows through small-scale dairy production for the local market; for others, a set of unique transactions costs hinders participation. Cooperative selling institutions are potential catalysts for mitigating these costs, stimulating entry into the market, and precipitating growth in rural communities. Trends in cooperative organization in East-African dairy are evaluated. Empirical work focuses on alternative techniques for effecting participation among a representative sample of peri-urban milk producers in the Ethiopian highlands. The techniques considered are a modern production practice (cross-bred cow use), a traditional production practice (indigenous-cow use), three intellectual-capital-forming variables (experience, education, extension), and the provision of infrastructure (as measured by time to transport milk to market). A Tobit analysis of marketable surplus generates precise estimates of non-participants' ‘distances' to market and their reservation levels of the covariates—measures of the inputs necessary to sustain and enhance the market. Policy implications focus on the availability of cross-bred stock and the level of market infrastructure, both of which have marked effects on participation, the velocity of transactions in the local community and, inevitably, the social returns to agroindustrialization.Dairy farming Ethiopia. ,Collective farms Ethiopia. ,

CREDIT MARKET CONSTRAINTS AND PROFITABILITY IN TUNISIAN AGRICULTURE

This work investigates the link between constraints in agricultural credit markets and farm profitability in a developing country setting. Using data from rural Tunisia in a switching econometric model, this work directly estimates both the determinants of credit constraints and their effects on farm profits. Policy implications are down from the significant differences in estimated profit functions of constrained and unconstrained farmers.Community/Rural/Urban Development, Financial Economics,

POLICY DIRECTIONS TO MITIGATE WATER-SUPPLY RISK IN IRRIGATED AGRICULTURE: A FEDERAL PERSPECTIVE

Water reallocation to meet mandated flow requirements and trust responsibilities, established in Federal law and water authority, can result in large uncompensated losses to irrigated agriculture. This paper discusses the nature and potential cost of water-supply interruptions due to Federal actions, and provides a comparative assessment of alternative risk-mitigation measures.Resource /Energy Economics and Policy,

INSTITUTIONAL CONSIDERATIONS IN TARGETING SOIL CONSERVATION EFFORTS

This paper will outline an approach to targeting soil conservation efforts that rests upon an analysis of physical, economic, and institutional parameters. Within this context, the literature on the relationship between soil erosion and some common arrangements of land ownership and control will be examined to provide insights useful in the formulation of public policy and to suggest further opportunities for research.Land Economics/Use,

Who Gains and Who Loses in the Game of Groundwater Markets in Water-scarce Regions

The rights to groundwater belong to the landowner. Therefore, access to this resource is privy to well-to-do farmers and is beyond the reach of resource-poor farmers. The only option left with them is water markets. The present study has aimed at understanding the operations of groundwater markets in fragile conditions and has identified the losers and gainers in the game of water markets in the long-run. It has been found that water markets mitigate inequalities in accessibility to groundwater resource in the short-run. But, faster and excessive use of groundwater may increase inequity among the farming community in the long-run. In water-scarce regions, water markets function on the principles of profit maximization. The different strategies are adopted to make groundwater available for sale. The water markets operate under monopsonic conditions. The terms and conditions of groundwater markets, i.e. kind or cash, vary differently across the regions. The study has suggested that water rights should be redefined and nationalization of groundwater resource is the only alternative for its sustainable management. To restrict the overexploitation of aquifers, water trading should be allowed in a limited manner. Programmes for recharging aquifer should be initiated on a large scale. A community-based action is required for the efficient use of water resources in water-scarce conditions through effective institutional arrangement.Resource /Energy Economics and Policy,

An Economic Assessment along the Jatropha-based Biodiesel Value Chain In India

The Government of India had launched the National Biofuel Mission in the year 2003 as an initiative to limit the country’s dependence on crude oil imports. An integral part of this mission is the Biodiesel Blending program and Jatropha, a tree-borne biodiesel yielding crop, is the cornerstone of the program. This study has been specifically designed to carry out economic assessment of the upcoming jatropha-based biodiesel value chain in the country. The study, based on primary data collected from three major jatropha growing states, has observed that jatropha cultivation is an economically viable proposition in the long-run as indicated by favourable values of net present value, internal rate of return and benefit cost ratio. Nevertheless, initial government support till attaining break even point is crucial to sustain the interest of the farmers. The jatropha seed processing industry has been found to be viable if operated at sufficient economies of scale, which in turn is determined by the level of backward integration with the seed market and a forward integration with biodiesel distribution channels. However, the existing biodiesel value chain in India lacks this integration and is characterized by under-developed seed markets, sub-optimal processing infrastructure and ill-defined biodiesel distribution channels. The involvement of corporate players to participate in processing and distribution activities has further delayed the program to take off. The study has cautioned that unless proactive orientation of all the stakeholders is ensured, the program may fail to meet its objectives, at least in the medium-term.Agricultural and Food Policy,

STRATEGIES FOR SMALLHOLDERS IN DEVELOPING COUNTRIES: COMMERCIALISATION, DIVERSIFICATION AND EXIT

This paper proposes a strategic framework for policies to assist smallholders in developing countries. It describes the inevitable features of structural change in the agricultural and rural economy, the associated pressures that these changes place on smallholders, and the consequent need for policies to facilitate rather than impede adjustment. A key premise of the framework is that, for the majority of smallholders, the long term (i.e. inter-generational)future lies outside the sector. Hence, long-term policies need to make a distinction between those who potentially have a competitive future in the sector and those who do not. In either case, many of the necessary policies will not be agriculture-specific, so it is important that agricultural policies are framed in a broader economy-wide framework. In addition, a clear distinction needs to be made between short-term policies to reduce poverty and food insecurity and long-term policies to stimulate development. This is because there are intertemporal trade-offs (as well as complementarities) between policies that are likely to be effective in the short-run, and those promising most impact over the long-term. The paper discusses the role of different agricultural and non-agricultural policies in providing the appropriate policy mix in countries at different stages of development.smallholders, rural development, agricultural policy, structural change, Agricultural and Food Policy, Community/Rural/Urban Development, International Development, O20, Q18, R23,