NEW NATIONAL CENTER FOR VALUE-ADDED AGRICULTURE

Farm Management,

A MODEL OF PESTICIDE RESISTANCE AS A COMMON PROPERTY AND EXHAUSTIBLE RESOURCE

A dynamic farm production model analyzes the interaction between the externalities caused by pest mobility and the development of pesticide resistance, a nonrenewable resource, in the context of agricultural biotechnologies. The model measures the effect of farmers' myopic behavior and the impact of pest mobility on the path of resistance.biotechnology, common property resource, European Corn Borer, externalities, pesticide resistance, intertemporal optimization, Research and Development/Tech Change/Emerging Technologies,

OPTIMAL PESTICIDE USAGE WITH RESISTANCE AND ENDOGENOUS TECHNOLOGICAL CHANGE

This paper develops a model analyzing the first best policy for a social planner when pesticide use causes resistance, the level of pest infestation is heterogeneous among farmers, and the development of a backstop technology is an endogenous and uncertain process which depends on the cumulative amount of R&D effort.Crop Production/Industries,

OPTIMAL DESIGN OF A VOLUNTARY GREEN PAYMENT PROGRAM UNDER ASYMMETRIC INFORMATION

Green payment programs, where the government pays farmers directly for environmental benefits, are an alternative to the current method of achieving environmental benefits which restricts farming practices in exchange for deficiency payments. This article presents a voluntary green payment program using the principles of mechanism design under asymmetric information. Information asymmetry arises because the government knows only the distribution of farmersÂ’' production situations, rather than farm-specific information. The program is demonstrated with irrigated corn production in the Oklahoma high plains. A green payment program can reduce budget costs and pollution, while increasing the net social value of corn production.Environmental Economics and Policy,

MANAGING PEST RESISTANCE: THE POTENTIAL OF CROP ROTATIONS AND SHREDDING

The current debate over resistance management plans mandated by the Environmental Protection Agency for transgenic crops ignores management practices that are complementary to refuge schemes. A dynamic production model is developed that measures the costs and benefits of crop rotation and shredding in terms of delaying resistance to Bt corn.biotechnology, common property resource, crop rotation, European Corn Borer, externalities, insecticide resistance, integrated pest management, intertemporal optimization, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,

Reputations, Market Structure, and the Choice of Quality Assurance Systems in the Food Industry

Many food traits desired by consumers are costly to provide and difficult to verify. A complicating factor is that delivered quality can only be affected stochastically by producers and imperfectly observed by consumers. Markets for these goods will emerge only if supplying firms can be trusted. We develop a repeated purchases model to explore how quality discoverability, market structure, nature of reputations, market premiums, and discount factors drive firm choice about the stringency of quality assurance systems designed to gain consumer trust. Reputation protection is key incentive for firms to invest in high-quality goods and quality assurance systems.

Reputations, Market Structure, and the Choice of Quality Assurance Systems in the Food Industry

A repeated-purchases model is developed to explore the fundamental economic factors that lie behind the choice of different quality assurance systems and their associated degrees of stringency by firms. Differences in the quality discoverability of a sought-after attribute, market structure, attractiveness of a market, nature of reputations, and the value placed in the future are among the factors contributing to the implementation of widely diverse systems across participants in different markets. Close attention is paid to the role of reputations in providing the incentives for firms to deliver high-quality goods. We model three different scenarios - monopoly, duopoly with firm-specific reputations, and duopoly with industry-wide reputations - and compare the resulting welfare of processors and their customers. We also provide a rationale for the branding efforts of many firms to distinguish their products along the supply chain.quality assurance, reputations, repeated purchases, product quality, supply chain, value-added agriculture, imperfect information, Marketing,

U.S. Farm Policy and the WTO: How Do They Match Up?

The debate over a new farm bill has focused on how to spend an additional $73.5 billion in funding for the agricultural budget over ten years. The House of Representatives, the Senate Agriculture Committee, and Senators Cochran and Roberts (supported by the Bush Administration) have each proposed a structure for the next farm bill. A critical question becomes whether these proposals conflict with U.S. commitments to limit subsidies under the World Trade Organization (WTO) agreement. This paper explores this issue and concludes with a discussion of the future direction of U.S. farm subsidies and new WTO agreements.agricultural policy, domestic support, trade commitments, WTO, Agricultural and Food Policy, International Relations/Trade,

COMMODITY POLICY, PRICE INCENTIVES, AND THE GROWTH IN PER-ACRE YIELDS

We estimate the influence of policy-induced price changes and of technology supply on North Carolina flue-cured tobacco yields. The decline in land rent and effective output price that accompanied a 1965 policy change from acreage allotments to poundage quotas caused a 12 percent decrease in yields. Farmer yields were more responsive to yield-increasing technologies under acreage allotments than under poundage quotas. Annual yield growth was 0.5 percent under poundage quotas and 4.32 percent under acreage allotments. The growth rate decline is attributable to changes in relative prices and to a slowdown in the supply of available technologies.Commodity policy, Endogenous yield growth, Flue-cured tobacco, Technical change, Agricultural and Food Policy, Demand and Price Analysis, Research and Development/Tech Change/Emerging Technologies,

MOVING FROM UNIFORM TO VARIABLE FERTILIZER RATES ON IOWA CORN: EFFECTS ON RATES AND RETURNS

This study develops a model based on the yield potential of various soil types in 12 Iowa counties to estimate the potential value of switching from uniform to variable fertilizer rates. Results indicate modest increases in the gross returns over fertilizer costs, ranging from $7.43 to$1.52 per acre. The net profitability of variable-rate technology (VRT) is sensitive to the per acre costs of moving to a VRT program. Under the assumptions of the model, applying variable rates would increase yield by 0.05 to 0.5 bushels per acre, and would reduce fertilizer costs by $1.19 to$6.83 per acre.Crop Production/Industries,