Transaction Costs and Institutional Innovations in Agricultural Labor Contracts

This paper develops and econometrically tests a model of labor contractual choice in developing countries, focusing on the choice between directly hiring labor on a spot market versus reliance on labor contractors. The theoretical model examines the role of market prices and factor endowments on contract choice and the role of labor contracting as an institutional innovation to reduce transactions costs associated with the use of hired labor. Econometric results confirm hypotheses that contracting becomes more profitable as farm size and collateral ownership increase, as family size decreases, and with tightening of the casual labor market.Labor and Human Capital,

The Potential for Mobile Markets to Improve Food Access and Affordability: A Market Basket Analysis

Food Consumption/Nutrition/Food Safety,

DIFFUSION OF BT COTTON AND INSECTICIDE USE

This study estimated a dynamic logistic model to explain the diffusion Bt cotton in the United States. Regional differences in the speed and extent of Bt cotton adoption were explained by differences in availability of Bt seed adapted to local conditions, potential seed supplier profits, and economic variables affecting grower gains from adoption. The study also estimated the impact of Bt cotton on insecticide use, controlling for differences in pest infestations and prices and correcting for the endogeneity of the Bt adoption decision. Bt cotton significantly reduced insecticide applications to control target pests cotton bollworm, tobacco budworm, and pink bollworm. Bt cotton has led to an overall reduction in these applications per total US cotton acres, ranging from 0.5 in 1996 to 1.8 in 2003. Reductions in applications per infested acres ranged from 0.67 to 2.3.Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,

The U.S. Dairy Industry in the 20th and 21st Century

At the beginning of the 20th Century, the U.S. dairy industry was comprised of millions of small-scale operations producing for their own or for very local consumption. By the end of the 20th Century, the industry was dominated by large-scale producers marketing products via large cooperatives. Improvements in transportation, advances in animal breeding and feeding technologies, and scale economies have allowed the industry to be more competitive on global markets, where there is now active international trade in dairy products. Major government programs to support dairy farm income date back to Depression-era problems facing the industry. Federal programs to support dairy income led to recurring problems of overproduction. Programs initially instituted to protect dairy producers from oligopsony power of purchasers now have more questionable effects given industry concentration. Increased market concentration has led to ongoing antitrust scrutiny of the industry, while geographic concentration of production has raised concerns over water and air pollution. At the outset of the 21st Century, increased productivity has made the dairy industry less reliant on government programs and more reliant on global markets. Yet the industry faces many challenges: greater scrutiny over greenhouse gas emissions, secular declines in milk prices and U.S. per capita milk consumption, reduced viability of small-scale operations, and the rise of plant-based milk substitutes. Still, dairies and dairy products remain an important part of U.S. agriculture and U.S. household food consumption

AIR POLLUTION AND FARM-LEVEL CROP YIELDS: AN EMPIRICAL ANALYSIS OF CORN AND SOYBEANS

While many studies have estimated the impacts of air pollution on crop yields on experimental plots, few have estimated these impacts under actual farm production conditions. This study econometrically estimates the impact of air pollution on corn and soybean yields, controlling for weather, soil quality and management practices, using farm-level data for the eastern United States. Ozone pollution was found to reduce yields for both crops. The mean elasticity of yield with respect to ozone exposure was -0.19 for corn and -0.54 for soybeans. The benefits of ozone standards to protect crops, measured in terms of crop revenues, range from $17 to$82 million depending on the stringency of the standard. Over 85 percent of the revenue gains are captured by three states: Maryland, North Carolina, and Virginia.Crop Production/Industries, Environmental Economics and Policy,

A Preliminary Analysis of the Benefits of Introducing Apomixis into Rice

The objective of this research is to undertake an ex ante economic analysis of basic scientific research that aims to identify the gene(s) that control apomictic reproduction, with the ultimate aim of transferring the characteristic into commercially important crops. This paper reports very preliminary results, using the introduction of apomixis into rice as a case study. Apomixis is a natural, asexual method of plant reproduction resulting in offspring that are genetically identical to the mother plant. Apomixis promises to revolutionize plant breeding by providing a system for crop improvement that allows any desired variety, including hybrids, to breed true. This ability will make both breeding and seed production more efficient. It offers the opportunity for plant breeders to more readily develop varieties that are specifically adapted to local conditions, using, and thus conserving, greater genetic diversity. Apomixis will also allow resource-poor farmers to replant the seed they produce from locally bred varieties year after year, a strategy not possible with today's commercial hybrid varieties. Global changes in aggregate welfare, resource allocation, production and price levels are calculated using the global economy-wide computable general equilibrium model known as GTAP. Preliminary modeling results suggest that the overall welfare gains associated apomictic rice could be substantial.Agribusiness, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Institutional and Behavioral Economics, Land Economics/Use, Production Economics, Research Methods/ Statistical Methods,

BIORATIONAL INSECTICIDE ADOPTION AND CONVENTIONAL INSECTICIDE USE: A SIMULTANEOUS, LIMITED DEPENDENT VARIABLE MODEL

Using data reporting section-level pesticide use for all of Arizona, this study estimates how early-season adoption of new biorational insecticides reduced subsequent broad-spectrum insecticide applications in cotton. The two-stage econometric model accounts for the endogeneity and censoring of the adoption intensity variable. One biorational application substituted for 3.66 broad-spectrum applications.Crop Production/Industries,

Adoption of Best Management Practices to Control Weed Resistance By Cotton, Corn, and Soybean Growers

This study examined adoption of ten best management practices (BMPs) to control weed resistance to herbicides. Using data from a survey of 1,205 U.S. cotton, corn, and soybean growers, count data models were estimated to explain the total number of practices frequently adopted. Ordered probit regressions were used to explain the frequency of individual BMP adoption. Growers practicing a greater number of BMPs frequently (a) had more education, but less farming experience; (b) grew cotton, (c) expected higher yields relative to the county average; and (d) farmed in counties with a lower coefficient of variation (CV) for yield of their primary crop. Yield expectations and variability were significant predictors of the frequency of adoption of individual BMPs. Most growers frequently adopted the same seven BMPs. Extension efforts may be more effective if they target a minority of growers and the three practices with low adoption rates. Counties with a high yield CV would be areas to look for low BMP adoption.weeds, herbicide, resistance management, corn, cotton, soybeans, adoption, Crop Production/Industries, Farm Management, Production Economics, Research and Development/Tech Change/Emerging Technologies, Q12, Q16,

Valuing the Roundup Ready® Soybean Weed Management Program

This study examines soybean grower adoption of the Roundup Ready® (RR) weed management program with and without a residual herbicide application, and grower concerns regarding weed resistance to herbicides using telephone survey data from of 357 growers in 2007. It also estimates the pecuniary and non-pecuniary benefits enjoyed by growers from their RR program. The results indicate that soybean growers planned to treat 29 percent of their RR acres with a residual herbicide in 2008. More than half (53%) of the growers survey were concerned about weed resistance. The estimated expected benefit of the RR program in 2008 was $10.17 per acre, which translates into about$727 million with 75.7 million acres of soybean in the U.S. in 2008. The estimated value per acre of the RR program with and without a residual was $8.78 and$12.83. The estimates also suggest that if growers were not using residual herbicides with the RR program, their benefits would be 28.4% lower. Alternatively, if all growers were required to use residual herbicides on their RR acres, the value of the RR program would be 46% lower. Simply increasing grower weed resistance concerns could increase residual herbicide use on RR acres by up to 7%. The same increase in residual herbicide use could be accomplished by decreasing the cost of residual herbicide applications on RR acres by $0.81 per acre.Roundup Ready, Soybean, Glyphosate, Weed Resistance, Benefits, Crop Production/Industries, Demand and Price Analysis, Farm Management, Research and Development/Tech Change/Emerging Technologies,

Positive Analysis of Invasive Species Control as a Dynamic Spatial Process

This paper models control of invasive buffelgrass (Pennisetum ciliare), a fire-prone African bunchgrass spreading rapidly across the southern Arizona desert as a spatial dynamic process. Buffelgrass spreads over a gridded landscape. Weed carrying capacity, treatment costs, and damages vary over grid cells. Damage from buffelgrass depends on its spatial distribution in relation to valued resources. We conduct positive analysis of recommended heuristic strategies for buffelgrass control, evaluating their ability to prevent weed establishment and to reduce damage indices over time. The high dimensionality of the problem makes full dynamic optimization intractable. However, two heuristic strategies – potential damage weighting and consecutive year treatment – perform well in terms of percent damage reduction relative to no treatment and to static optimization. Results also suggest specific recommendations for deployment of rapid rapid-response teams to prevent invasions in new areas. The long-run population size and spatial distribution of buffelgrass is sensitive to priority weights for protection of different resources. Land managers with different priorities may pursue quite different control strategies, which may pose a challenge for coordinating control across jurisdictions.invasive species, integer programming, Crop Production/Industries, Environmental Economics and Policy, Q57, Q58,