Provision of an environmental output within a multi-output distance function approach

This paper redefines technical efficiency by incorporating provision of environmental goods as one of the outputs of the farm within a multi-outptut distance function framework. Permanent and rough grassland area are used as a proxy for the provision of environmental goods. The multi-output distance function approach is used to estimate technical efficiency. A Bayesian procedure involving the use of a Gibbs sampler is used to estimate the farm specific efficiency as well as the coefficients of the distance function. In addition, a number of explanatory variables for the efficiency were introduced in the analysis and posterior distributions of those were obtained. The methodology is applied to panel data on 215 dairy farms in England and Wales from the Defra Farm Business Survey. Results show that both farm efficiency rankings and determinants of inefficiency change when provision of environmental outputs by farms is incorporated in the efficiency analysis, which may have important political implications.Technical efficiency, environmental good, multi-output

Integrating spatial dependence into stochastic frontier analysis

An approach to incorporate spatial dependence into Stochastic Frontier analysis is developed and applied to a sample of 215 dairy farms in England and Wales. A number of alternative specifications for the spatial weight matrix are used to analyse the effect of these on the estimation of spatial dependence. Estimation is conducted using a Bayesian approach and results indicate that spatial dependence is present when explaining technical inefficiency.Spatial dependence, technical efficiency, Bayesian, spatial weight matrix

Economic valuation of an offshore wind farm in Greece: the role of individual’s base-state influences and beliefs in the value formation process

The increased concern for the impacts of climate change on the environment, along with the growing industry of renewable energy sources, and especially wind power, has made the valuation of environmental services and goods of great significance. Offshore wind energy is being exploited exponentially and its importance for renewable energy generation is increasing. We apply a double-bound dichotomous Contingent Valuation Method analysis in order to both a) estimating the Willingness to Pay (WTP) of Greek residents for green electricity produced by offshore wind farm located between the islands of Tinos and Andros and b) identifying factors behind respondents’ WTP including individual’s behaviour toward environment and individual’s views on climate change and renewable energy. A total of 141 respondents participated in the questionnaire. Results show that the respondents are willing to pay on average 20€ every two months through their electricity bill in return for carbon-free electricity and water saving from the wind farm. Respondents’ environmental consciousness and their perception towards climate change and renewable energy have a positive effect on their WTP

Adoption of GMHT Crops: Coexistence Policy Consequences in the European Union

Agricultural and Food Policy, Crop Production/Industries,

Improving productivity and water use efficiency: a case study of farms in England

The idea of Sustainable Intensification comes as a response to the challenge of avoiding resources such as land, water and energy being overexploited while increasing food production for an increasing demand from a growing global population. Sustainable Intensification means that farmers need to simultaneously increase yields and sustainably use limited natural resources, such as water. Within the agricultural sector water has a number of uses including irrigation, spraying, drinking for livestock and washing (vegetables, livestock buildings). In order to achieve Sustainable Intensification measures are needed that enable policy makers and managers to inform them about the relative performance of farms as well as of possible ways to improve such performance. We provide a benchmarking tool to assess water use (relative) efficiency at a farm level, suggest pathways to improve farm level productivity by identifying best practices for reducing excessive use of water for irrigation. Data Envelopment Analysis techniques including analysis of returns to scale were used to evaluate any excess in agricultural water use of 66 Horticulture Farms based on different River Basin Catchments across England. We found that farms in the sample can reduce on average water requirements by 35% to achieve the same output (Gross Margin) when compared to their peers on the frontier. In addition, 47% of the farms operate under increasing returns to scale, indicating that farms will need to develop economies of scale to achieve input cost savings. Regarding the adoption of specific water use efficiency management practices, we found that the use of a decision support tool, recycling water and the installation of trickle/drip/spray lines irrigation system has a positive impact on water use efficiency at a farm level whereas the use of other irrigation systems such as the overhead irrigation system was found to have a negative effect on water use efficiency

The impact of secondary pests on Bacillus thuringiensis (Bt) crops

The intensification of agriculture and the development of synthetic insecticides enabled worldwide grain production to more than double in the last third of the 20th century. However, the heavy dependence and, in some cases, overuse of insecticides has been responsible for negative environmental and ecological impacts across the globe, such as a reduction in biodiversity, insect resistance to pesticides, negative effects on nontarget species (e.g. natural enemies) and the development of secondary pests. The use of recombinant DNA technology to develop genetically engineered (GE) insect resistant crops could mitigate many of the negative side effects of pesticides. One such genetic alteration enables crops to express toxic crystalline (Cry) proteins from the soil bacteria Bacillus thuringiensis (Bt). Despite the widespread adoption of Bt crops, there are still a range of unanswered questions concerning longer term agro-ecosystem interactions. For instance, insect species that are not susceptible to the expressed toxin can develop into secondary pests and cause significant damage to the crop. Here we review the main causes surrounding secondary pest dynamics in Bt crops and the impact of such outbreaks. Regardless of the causes, if non-susceptible secondary pest populations exceed economic thresholds, insecticide spraying could become the immediate solution at farmers’ disposal, and the sustainable use of this genetic modification technology may be in jeopardy. Based on the literature, recommendations for future research are outlined that will help to improve the knowledge of the possible longterm ecological trophic interactions of employing this technology

Measuring sustainable intensification: combining composite indicators and efficiency analysis to account for positive externalities in cereal production

We combine the use of a stochastic frontier analysis framework and composite indicators for farm provision of environmental goods to obtain a farm level composite indicator reflecting sustainable intensification. The novel sustainable intensification composite indicator that is developed accounts for multidimensional market and non-market outputs, namely the economic performance of cereal farms (i.e. market production value) and the associated positive environmental impacts of production (e.g. positive environmental externalities). The composite indicator integrates three different indicators for the provision of environmental goods into a stochastic frontier analysis: a) agri-environmental payments; b) the ratio of rough grassland and permanent pasture area to total utilised agricultural area; and c) land use diversity, as measured by the Shannon Index. We apply this approach to a panel of data for 106 cereal farms in England and Wales during the period 2010–2012. Results indicate that farm rankings on the indicator vary substantially depending on the weight given to the different environmental aspects/indicators, suggesting that single indicators of the provision of environmental goods may not provide a true reflection of the environmental performance of farms. We illustrate a simple approach that captures the aspects of sustainable intensification of farms in a much more holistic way, i.e. by producing a distribution of sustainable intensification scores for each farm reflecting different weightings of evaluation criteria. To reduce the dimensionality of this distribution farms are classified into four distinct groups according to the shape of this distribution, with some farms found to perform well under all combinations of weights for evaluation criteria, while others always perform poorly. This distribution-based analysis provides a greater depth of information than traditional approaches based on the generation of a single sustainable intensification score

Testing for bubbles in agriculture commodity markets

A number of tests and dating algorithms have been developed and used to identify rapid increases in prices followed by a collapse, also known as explosive bubbles (Phillips, Wu and Yu, 2011; Phillips, Shi and Yu, 2012; Gilbert, 2009; Gutierrez, forthcoming). Previous analysis on agriculture commodities by Gilbert (2009) and Gutierrez (forthcoming) applied the tests developed by Phillips, Wu and Yu (2011) and focused on four agricultural commodities. In contrast, we apply the more recent generalized sup augmented Dickey-Fuller (GSADF) test for explosive bubbles (Phillips, Shi and Yu, 2012) to monthly time-series for food, beverages, agricultural raw material, cereals, dairy, meat, oils and sugar indices and a total of 28 agricultural commodities between 1980-2012. We found price bubbles occurred for some commodities within food markets

Provision of an environmental output within a multi-output distance function approach

This paper redefines technical efficiency by incorporating provision of environmental goods as one of the outputs of the farm within a multi-outptut distance function framework. Permanent and rough grassland area are used as a proxy for the provision of environmental goods. The multi-output distance function approach is used to estimate technical efficiency. A Bayesian procedure involving the use of a Gibbs sampler is used to estimate the farm specific efficiency as well as the coefficients of the distance function. In addition, a number of explanatory variables for the efficiency were introduced in the analysis and posterior distributions of those were obtained. The methodology is applied to panel data on 215 dairy farms in England and Wales from the Defra Farm Business Survey. Results show that both farm efficiency rankings and determinants of inefficiency change when provision of environmental outputs by farms is incorporated in the efficiency analysis, which may have important political implications

Provision of an environmental output within a multi-output distance function approach

This paper redefines technical efficiency by incorporating provision of environmental goods as one of the outputs of the farm within a multi-outptut distance function framework. Permanent and rough grassland area are used as a proxy for the provision of environmental goods. The multi-output distance function approach is used to estimate technical efficiency. A Bayesian procedure involving the use of a Gibbs sampler is used to estimate the farm specific efficiency as well as the coefficients of the distance function. In addition, a number of explanatory variables for the efficiency were introduced in the analysis and posterior distributions of those were obtained. The methodology is applied to panel data on 215 dairy farms in England and Wales from the Defra Farm Business Survey. Results show that both farm efficiency rankings and determinants of inefficiency change when provision of environmental outputs by farms is incorporated in the efficiency analysis, which may have important political implications