ON MODELING SYSTEMS OF CROP ACREAGE DEMANDS

This article presents an alternative approach to the specification of systems of crop acreage responses. Derived demands for acreages of individual crops are specified as conditional on total crop acreage, and related separability and dynamic specifications help to reduce the effects of multicollinearity in the system. A simple econometric model of crop acreage demands for Western Canada illustrates the methodology.Crop Production/Industries,

OPEN REGIONALISM IN APEC: IMPACTS ON U.S. AGRICULTURE AND TRADE

APEC's "open regionalism" calls for free-trade in APEC but with benefits also accruing to non-APEC members. This study shows that "open regionalism" provides strong incentives for non-APEC economies to also liberalize their policies to maintain competitiveness. Inclusion of agriculture is critical to total U.S. welfare gains because of current high protection rates in East Asia.Institutional and Behavioral Economics, International Relations/Trade,

Supply Chains and Rural Development in the Asia Pacific Region

Rapid income growth and urbanization are having profound impacts on the food system, food producers and rural areas in the developing Asia Pacific economies. Meeting the challenge of rural development will depend on better integrating rural areas with fast-growing urban areas where the composition of food demand is changing and the logistics of supply are growing more complex. Possible government options include investment in transportation infrastructure—roads, railroads and waterway—and providing rural communities and small-scale producers the tools they need to better adapt to the rapid spread of modern supermarkets and their supply chains.Community/Rural/Urban Development,

Dynamic Econometric Models of Manitoba Crop Production and Hypothetical Production Impacts for CAIS

This study analyzes the impact of the Canadian Agriculture Income Stabilization (CAIS)program. The study begins with a specification of dynamic crop production that decomposes static short run crop acreage allocation decisions and dynamic crop yield affects. The modelling framework accommodates risk aversion, price uncertainty, and applies recent aggregation theory to aggregate weather data. Using this framework an analytical model of the impacts of CAIS on crop production is developed. Hypothetical impacts of are simulated using an aggregate Manitoba data set. The results show that CAIS has a substantial impact on the shadow prices of both inputs and outputs. These shadow price effects resulted in a 4 percent increase in long run wheat and barley yields and a 2 percent increase for canola. CAIS has a small impact on nominal wealth but the impacts depend on the properties of producers’ risk preferences. With constant relative risk aversion there is a wealth effect which in turn affects production decisions.Canada, CAIS, risk, crop, production, Agricultural and Food Policy, International Relations/Trade, Production Economics, Risk and Uncertainty,

Farmland consolidation and fragmentation in Upper East Tennessee

Forty percent of farm operators in the 12-county Upper East Tennessee region have expanded their farmland base at one time or another. Consolidation of small farm units into larger ones has been an important adjustment strategy that the nation\u27s farmers have used to maintain or improve their farm income. The gains from this strategy are not clear in Upper East Tennessee. In the region, those farmers who have expanded their land base own an average of 93 acres, more than twice the holdings of farmers who have not expanded. Nevertheless, 93 acres is substantially below the state average of more than 120 acres for all farms. Although net and gross farm incomes generated on expanded farms were significantly higher than on the non expansion farms, the difference does not appear to be very important. In 1974, average gross farm income for the expansion group was $7,354 while that for the non-expansion group was$3,342. Neither income is representative of a very large operation. In 1975, 25 percent of farm operators in the region expanded their land resources by renting in part of the land that they used. Another 4 percent were tenants who rented in all of the land that they farmed. This represents a continuing trend toward more rental and less ownership of farmland. Still, the majority of the region\u27s farmers own all the land which they farm. In most farm areas in the United States, the process of farmland consolidation has led to increases in the average farm size which is characteristic of an area. The average farm size in Upper East Tennessee is presently about 60 acres and has not changed appreciably in the last 25 years. Increases in the number of small part-time and hobby farms have been off-set by decreases in the number of small full-time farms. Likewise the consolidation of medium sized farms into larger ones has been off-set by the processes of farm fragmentation. Evidence from this study indicate that farmers in Upper East Tennessee have been unable to pursue successfully a strategy of farmland consolidation because land has been relatively scarce in both a physical and economic sense. The region is traversed by four mountain ranges and has proportionately less Class I-III land than the state as a whole. Furthermore, non farm growth in the region has been substantial. Popu-lation density and growth in land area devoted to urban and built-up uses are both above the state average. The price of farmland in the region has increased by a factor of five since the 1940\u27s to a current average of $718 per acre. Industrial and urban growth since the 1950 s are responsible for this surge. Industry has not only affected farmland price by competing for it directly, but it has provided jobs for many of the farmers. Forty-nine percent of the region\u27s farmers were employed full-time off the farm in 1975. Secure off-farm income has made the operator less dependent on farm income and more likely to view land as a speculative as well as a productive asset