Properties of Flexible Functional Forms for Modeling Bilateral Export Supply and Import Demand in Multi-Country Agri-Food Models

This paper illustrates the opportunities of incorporating more advanced functional forms into multi-country trade policy models. It suggests the use of flexible forms such as the Symmetric Generalized McFadden Function (SGMF) or the Normalized Quadratic-Quadratic Expenditure System (NQQES). Particularly if issues namely trade in differentiated products, preferential trade and effects of standards and traceability on bilateral trade are considered the NQQES offers attractive properties since it allows estimating variety specific expenditure elasticities which might compensate for example increased certification costs. A second aim of the paper refers to the critique on the handling of model parameters in calibrated policy models. In general, employed elasticities violate the theoretical conditions. We describe the calibration procedure developed to obtain model parameters consistent with economic theory.bilateral trade modelling, flexible functions, calibration, International Relations/Trade, Research Methods/ Statistical Methods, B41, C61, F13, Q18, Q17,

EU Food Safety Standards, Traceability and Other Regulations: A Growing Trade Barrier to Developing Countries' Exports?

Food Consumption/Nutrition/Food Safety, International Relations/Trade,

Quantitative analysis of the impacts of Croatia's agricultural trade policy on the agri-food sector

Croatia recently signed several trade liberalisation agreements. The cornerstones of its trade policy are WTO membership, the Stabilisation and Association Agreement with the EU and Croatia's application of membership as well as bilateral free trade agreements within the Stability Pact for South Eastern Europe. The objective of this paper is to quantify the impact of Croatia's agricultural trade policy on the agri-food sector. For the analysis, a partial equilibrium model based on 1999/2000 data is used. Trade between Croatia and Bosnia and Herzegovina, Hungary, Slovenia, the EU-15 and the rest of the world is modelled for 12 product groups. Three liberalisation scenarios are analysed for the years 2002 and 2005. The scenarios differ with regard to the tariff changes. In general, the model results indicate that reciprocal trade liberalisation is welfare improving for Croatia. The increase in consumer welfare is larger than the decline in farmers' profits and the loss of governmental tariff revenues. In conclusion, the continuation of trade liberalisation is to be recommended. However, trade policy alone will not solve the existing problems of the agri-food sector, and transitional compensation measures could be considered to avoid unacceptable hardship. The benefits of trade liberalisation are primarily to be seen in an improved access to international markets, which probably enables Croatian food processors to realise economies of scale. In addition, internationally binding commitments such as trade agreements are likely to foster the internal and international political credibility and reduce political risks. -- G E R M A N V E R S I O N: In den letzten Jahren hat Kroatien mehrere Handelsabkommen unterzeichnet. Die Hauptelemente der kroatischen Handelspolitik sind die Mitgliedschaft in der WTO, das Stabilisierungsund Assoziierungsabkommen mit der EU und der Antrag auf EU-Mitgliedschaft sowie die bilateralen Freihandelsabkommen innerhalb des Stabilitätspaktes für Südosteuropa. Ziel des vorliegenden Beitrages ist es, die Auswirkungen dieser Agrarhandelspolitik auf den kroatischen Agrar- und Ernährungssektor zu quantifizieren. Für die Analyse wird ein partielles Gleichgewichtsmodell verwendet, das auf Daten der Jahre 1999/2000 basiert. Für 12 Produktgruppen wird Kroatiens Handel mit Bosnien und Herzegowina, Ungarn, Slowenien, der EU-15 und dem Rest der Welt modelliert. Für die Jahre 2002 und 2005 werden drei Liberalisierungsszenarien untersucht, die sich bezüglich der Zolländerungen unterscheiden. Insgesamt zeigen die Modellergebnisse, das eine wechselseitige Handelsliberalisierung wohlfahrtssteigernde Effekte für Kroatien hat. Der Anstieg der Konsumentenwohlfahrt übersteigt den Einkommensrückgang der Landwirte und den Verlust an staatlichen Zolleinnahmen. Daher ist eine Fortsetzung der Handelsliberalisierung empfehlenswert. Allerdings kann die Handelspolitik alleine die existierenden Probleme im Agrar- und Ernährungssektor Kroatiens nicht lösen. Um unerwünschteHärten zu vermeiden, könnten für eine Übergangsphase Kompensationsmaßnahmen in Betracht gezogen werden. Der Nutzen einer Handelsliberalisierung ist vor allem in einem verbesserten Zugang zu internationalen Märkten zu sehen. Dies ermöglicht es kroatischen Verarbeitern wahrscheinlich, Skaleneffekte zu realisieren. Außerdem erhöhen international bindende Verpflichtungen wie Handelsabkommen die interne und internationale politische Glaubwürdigkeit und tragen damit dazu bei, politische Risiken zu reduzieren.Croatia,trade liberalisation,agri-food sector,partial equilibrium analysis,Kroatien,Handelsliberalisierung,Agrar- und Ernährungssektor,partielle Gleichgewichtsanalyse

Seed selection strategies for information diffusion in social networks: An agent-based model applied to rural zambia

The successful adoption of innovations depends on the provision of adequate information to farmers. In rural areas of developing countries, farmers usually rely on their social networks as an information source. Hence, policy-makers and program-implementers can benefit from social diffusion processes to effectively dis-seminate information. This study aims to identify the set of farmers who initially obtain information (‘seeds’) that optimises diffusion through the network. It systematically evaluates different criteria for seed selection, number of seeds, and their interaction effects. An empirical Agent-Based Model adjusted to a case study in rural Zambia was applied to predict diffusion outcomes for varying seed sets ex ante. Simulations revealed that informing farmers with the most connections leads to highest diffusion speed and reach. Also targeting village heads and farmers with high betweenness centrality, who function as bridges connecting different parts of the network, enhances diffusion. An increased number of seeds improves reach, but the marginal effects of additional seeds decline. Interdependencies between seed set size and selection criteria highlight the importance of considering both seed selection criteria and seed set size for optimising seeding strategies to enhance information diffusion. © 2020, University of Surrey. All rights reserved

Exploring the effectiveness of serious games in strengthening smallholders’ motivation to plant different trees on farms: evidence from rural Rwanda

Addressing the global challenges of climate change and biodiversity loss requires the widespread adoption of sustainable agricultural practices such as agrofor-estry. In many Sub-Saharan African countries, however, agroforestry adoption rates remain low among small-scale farmers, with insufficient knowledge about the benefits being a major barrier. To close this knowledge gap and increase farmers’ motivation to plant different tree species on their farms, this study applies a Role-playing game (RPG) as an awareness-raising tool. 72 small-scale farmers from Rwanda played the RPG and participated in pre-and post-game surveys. A comparison of responses before and after playing demonstrates that the RPG increased farmers’ knowledge and attitude toward most tree-related benefits. Moreover, playing the game significantly strengthened farmers’ motivation to plant more tree species on their farms. The findings were supported by debriefing results, confirming that RPGs are an effective tool to raise farmers’ awareness and motivation on sustainable land use management

Value chain analysis methodologies in the context of environment and trade research

This paper gives an overview of different methodologies related to value chain analysis in the context of environment and trade research. Four major fields of methodologies are identified: Accounting of input-output flows, general computable equilibrium models, econometrics, and global commodity chain analysis. Accounting of flows includes different physical (e.g. life cycle assessment) and monetary (e.g. social accounting matrix) accounting frameworks providing the foundation for computable general equilibrium models. Econometric value chain analysis is widespread in the field of impact assessment of value chains. It can be applied to analyze the effects of standards (e.g. food, social, and environmental) as well as transaction costs on the income of households (micro level) or on trade volumes of countries (macro level). Global commodity chain analysis aims to identify and measure the balance of power between the participating actors

Economic impacts of power-to-liquid fuels in aviation: A general equilibrium analysis of production and utilization in Germany

The aviation industry faces an urgent need to adopt sustainable aviation fuels for significant decarbonization. Power-to-Liquid (PtL) fuel is considered a potential game changer, but questions remain about the wider economic impacts of introducing PtL fuel in the aviation sector. This paper examines the economic impacts of introducing PtL fuel blending quotas along with a price policy consisting of a kerosene tax and PtL fuel subsidies for the case of Germany. Based on a detailed supply chain analysis, we apply a social accounting matrix and a computable general equilibrium model to take into account both, the production and utilization perspectives of PtL jet fuel. Our results show that the influence of low blending quotas is mainly limited to the aviation sector, with a 10 % blending quota increasing consumer prices by 7.9 % and reducing aviation industry output by 3.1 %. When quota levels increase, however, the effects go beyond the air transport system. On inter-sectoral level, we identify three main patterns: First, industries that substantially contribute to the PtL fuel supply chain, such as metal products and electrical equipment, see increasing levels in both, domestic production, and imports. Second, aviation upstream industries like transport infrastructure and aircraft production see reduced domestic production and imports. Third, aviation downstream industries, such as delivery services and travel agencies, see substitution effects, where imports partly replace domestic output. Macroeconomic indicators are affected negatively by the quota scenarios, but the relative impact is low as the maximum decrease in the gross domestic product (GDP) does not exceed 0.35 %. PtL fuel production subsidies can largely mitigate the decrease in aviation demand but come at the cost of a stronger reduction in the GDP and government income. Moreover, the sensitivity analysis emphasizes that various assumptions and parameters, such as the cost projections of PtL fuel, import options, and elasticities of demand, affect the intensity of economic consequences. Our analysis implies the trade-offs of policymaking between sectoral and macroeconomic interests in the context of sustainable fuels. The main contribution of this study is the investigation of the broader economic effects resulting from the adoption of PtL fuels in aviation. In particular, the production as well as the utilization perspective are considered simultaneously in this study

Assessing natural resource management through integrated environmental and social-economic accounting: The case of a Namibian conservancy

Local natural resource management in its diverse manifestations holds core to its principles that the marginal and vulnerable households are empowered to manage valuable natural resources to improve social and economic equality and conserve biodiversity. Yet studies aiming to identify the impacts often show inconsistent results. Through constructing an integrated Environmental and Social Accounting Matrix (ESAM), we aim to assess how natural resources are used in different sectors and by different livelihoods, thus delivering different direct and indirect benefits to the community. The study was conducted in Namibia’s Sikunga Conservancy, which manages wildlife and fish resources in the Zambezi region. Our village-level ESAM shows an economic structure that strongly disadvantages remote households and identifies a small sector of the economy that benefits significantly from the use of natural resources. The ESAM approach is able to isolate undesirable socioeconomic developments such as unequal benefit sharing, which hinders community development. © 2016, © The Author(s) 2016

Die Nutzung von Naturkapital zur wirtschaftlichen Entwicklung Namibias : eine bioökonomische Gleichgewichtsanalyse am Beispiel Fisch

Die Klassifizierung maritimer Fischbestände als globale öffentliche Güter verpflichtet den Staat gegenüber der internationalen Staatengemeinschaft, die Verantwortung für die nachhaltige Nutzung der Naturressourcen innerhalb seiner Jurisdiktion zu übernehmen. Die effiziente Nutzung knapper biologischer Ressourcen impliziert die maximale und nachhaltige Abschöpfung von Ressourcenrenten. Die Arbeit quantifiziert die Ressourcenrenten der kommerziellen Fischerei in Namibia und erörtert Strategien einer nachhaltigen Entwicklung für das Land, welches gegenwärtig den letzten Rang auf der Skala der weltweiten Einkommensdisparität einnimmt. Hierzu wurde in Anlehnung an das UN System of Environmental and Economic Accounting (SEEA) eine Social Accounting Matrix (SAM) mit detaillierter Abbildung des Fischereisektors spezifiziert. Es wurde ein allgemeines Gleichgewichtsmodell entwickelt, das als Basis für wirtschaftsweite Analysen dient. Ein Schwerpunkt lag hier auf der Implementierung von flexiblen nicht-homothetischen Nachfragesystemen und der Ableitung theoretisch konsistenter Modellparameter. Parallel dazu wurden partiale bioökonomische Fischressourcen-Modelle erstellt. Bioökonomische Modelle eignen sich zur Analyse des Managements erneuerbarer Ressourcen. Spieltheoretische Analysen ergänzen den Methodenapparat. Es wurden mögliche Koalitionen für ein kooperatives Management von marinen Fischressourcen spieltheoretisch untersucht, um Empfehlungen für die Verhandlung von Nutzungsrechten abzuleiten. Sowohl die kommerzielle Fischerei als auch der Tourismussektor Namibias spiegeln die dualistische Struktur des Landes wieder. Beide Sektoren sind abhängig vom Naturkapital des Landes. Die Autorin geht der Frage nach, ob das vorhandene Naturkapital dazu beitragen kann, die soziale Disparität in Namibia nachhaltig zu verringern. Die Arbeit kommt zu dem Ergebnis, dass der Staat hohe Ressourcenrenten de facto wenigen etablierten Akteuren überlässt. Als Resultat fehlender Nachweispflichten können vertikal integrierte Unternehmen erzielte Renten kaschieren. Die Verhandlungen über Partnerschaftsabkommen sollten unter dem Aspekt der Abschöpfung einer maximalen Ressourcenrente, die allen Namibiern Nutzen stiftet, neu evaluiert werden. Spieltheoretische Analysen konnten das Potenzial für eine Win-Win Situation einer solchen Koalition asymmetrischer Spieler andeuten. Simulationen mit individuellen handelbaren Quoten (ITQs) zeigten die positiven Wohlfahrtseffekte von Nutzungsgebühren, da diese hohe private Diskontraten effizienter Unternehmen kompensieren und Quotenpreise eindämmen. Das Konzept des Community Based Natural Ressource Management (CBNRM) zeigt in Namibia erfolgversprechende Ansätze. Namibias Naturlandschaft bietet die Chance für eine breitere Aufstellung von CBNRM. Praktiker und Wissenschaftler favorisieren derzeit Hybrid-Governance Strukturen gegenüber staatlich kontrollierten Landmanagement Regimen. Ein diversifizierter naturbasierter Tourismus könnte auf die internationale Zahlungsbereitschaft für den Erhalt von Biodiversität treffen. Finanzmittel wären durch einen Transfer von Ressourcenrenten verfügbar. Mathematische Modelle sind wichtige Instrumente, um Verteilungswirkungen abzuschätzen. Darüber hinaus kann die Visualisierung in Form einer grünen SAM Entscheidungsträger ansprechen. Dieses Argument gilt auch für spieltheoretische Anwendungen. Die vorliegende Arbeit hat Schnittstellen erarbeitet, die spieltheoretische Überlegungen durch numerische Simulationen testen. Weiterer Forschungsbedarf besteht insbesondere bei der Verbesserung der methodischen Verknüpfung naturwissenschaftlicher Erkenntnisse mit ökonomischen Modellen.The use of natural capital for economic development in Namibia - a bioeconomic equilibrium analysis using the example of fisheries Marine fish resources are classified as global commons. Accordingly, national governments are committed to sustainably manage fish stocks living within the jurisdiction of their exclusive economic zone. Efficient use of scarce biological resources implies abstraction of maximum resource rents. The performed scientific work quantifies resource rents gained by commercial fisheries in Namibia and discusses strategies for sustainable development of the country that currently holds the lowest ranking in worldwide income disparity. For this purpose a hybrid social accounting matrix (SAM) is developed following the UN concept of integrated environmental and economic accounting (SEEA). On the basis of the created data framework the author developed an applied general equilibrium model with special focus on specifying flexible non-homothetic consumer and bilateral import demand systems. The author advanced a procedure for calibrating a set of parameters for the Normalized Quadratic-Quadratic Expenditure System (NQQES) that satisfy the requirements of economic theory. Parallel, partial bioeconomic fishery model are established for analyzing management regimes of renewable resources. The methodological concept is further supplemented by game theoretic applications. Recent research outcomes of coalition theory are tested with respect to evaluating the potential of cooperative management and to derive recommendations for negotiating the allocation of user rights. Until today the commercial fishery and the tourism sector respectively reflect the dualistic character of the country. Both sectors heavily depend on natural capital and its quality. The thesis is investigating whether existing natural resources, namely fish and wildlife might support development by simultaneously removing social injustice. It was found that in Namibia resource rents are still left to a few privileged established enterprises, and that the aim of black economic empowerment via reallocation of quotas is not reached. As a consequence of missing duties for financial record keeping and resulting transfer pricing enterprises can easily conceal realized profits. In addition the often outdated fishing fleet operates inefficiently. In terms of capturing maximum resource rents for the benefit of all Namibians, negotiations on economic partnership agreements with the EU should be reviewed. Game theoretic analysis indicates the potential of a win-win situation of a coalition between two asymmetric players. In case of establishing individual transferable quota regimes (ITQs), model simulations indicate the welfare improving effect of royalties. This is explained by the positive effect of user fees on controlling quota prices and countervailing high personal discount rates of cost efficient entrepreneurs, who are supposed to dissipate future revenues. In Namibia, the strategy of Community Based Natural Resource Management (CBNRM) reveals promising options. Namibia’s natural landscape provides the opportunity for an extension of CBNRM. The experience of academics as well as practitioners favor hybrid governance architecture opposed to land management regimes controlled by central government. Diversified nature-based tourism might fits in with the international willingness to pay for biodiversity conservation. Finance could be available by the transfer of resource rents. Mathematical planning tools are key instruments to assess impacts on the allocation of user rights and the distribution of benefits from natural capital. Furthermore, visualization via a green SAM might move decision-makers in the direction of sustainability. This argument also holds for game theoretic applications. More research is needed in the field of connecting different methods, particularly combining the models of natural science and economics