German Exports on the Rise: Domestic Demand Should Follow

German exports suffered a sharp decline during the international economic and financial crisis. But recently a strong turnaround has taken place. Macroeconomic stimulus measures in numerous countries have likely contributed to this export recovery. Germany's manufacturers are at the forefront of the resurgence in exports. The mechanical engineering, chemicals, and automotive industries in particular have realized remarkable export surpluses. Germany's current account surplus has risen considerably over the last ten years. As a result, Germany has cemented its position as a net creditor and investor in the international financial market. The challenge now is to link the strength of Germany's exporting industries to the domestic demand. In doing so, long-term and stable growth for the overall economy could be reached. In short, Germany must overcome the dichotomy between its strong export economy and weak domestic demand. One strategy for strengthening domestic demand could be to relax the policy of wage restraint pursued in the years prior to the crisis.Trade, Open Economy Macroeconomics, International Relations

The Strategic Use of Private Quality Standards in Food Supply Chains

This paper highlights the strategic role retailers private quality standards play in food supply chains. Considering two symmetric downstream firms that are exclusively supplied by a finite number of upstream firms and letting the upstream firms decide which retailer to supply, we show that there exist two asymmetric equilibria in the downstream firms quality requirements. The asymmetry is driven by both an increase in the retailers buyer power and the retailers competition for suppliers. The use of private quality standards induces a decrease in social welfare, which can be softened by the implementation of a public minimum quality standard.Private Quality Standards, Vertical Relations, Buyer Power, Food Supply Chain, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Food Consumption/Nutrition/Food Safety, Industrial Organization,

CGE-based methods to measure the impact of trade liberalization on poverty

It is heavily discussed whether trade liberalization is good or bad for the poor in a given (developing) country. The answer depends on a wide variety of factors, such as the type of trade barrier removed, the economic and institutional environment in the country, and the characteristics of the poor in that country (Winters 2002; Winters et al. 2004). In addition, the results can also be driven by the specific method used to measure the impact of the trade-policy reform on poverty. For an informed discussion, it is, therefore, important to understand the corresponding empirical methods at hand. Most generally, empirical studies on trade impacts can be divided into ex-post and ex-ante analyses. Whereas ex-post studies focus on the effects of trade policies that have already been implemented, ex-ante analyses simulate the effects of potential future (and actual) trade policies (Piermartini and Teh 2005). In other words, ex-post studies have both pre- and post-reform data at their disposal, while ex-ante studies rely exclusively on pre-liberalization data. Ex-post analyses have the advantage of being grounded on real-world observations; however, their difficulty lies in applying appropriate statistical methods to separate the impact of a given trade-policy reform from any other shock affecting the economy in the observation period (Hertel and Reimer 2005; Piermartini and Teh 2005). This identification problem is absent in ex-ante studies, conducting counterfactual analyses, as they allow to explicitly and exclusively simulate the trade-policy shock (Hertel and Reimer 2005). However, simulation studies encounter yet other challenges, namely to verify the assumptions concerning the model specification (e.g., parameters and functional forms) and, thus, to ensure the quality of the results (Piermartini and Teh 2005; Winters et al. 2004). Their strength, in turn, is to reveal possible orders of magnitude of a policy impact, to identify relative winners and losers, and to give insights into the quantitative importance of the mechanisms behind the effects of a given trade-policy reform on poverty (Winters 2003; Winters et al. 2004; Bourguignon et al. 1991). While examples of ex-post methods to analyze the effects of trade liberalization on poverty can be found in Winters et al. (2004), this Roundup gives an overview of some basic ex-ante methods available to quantify and evaluate the impact of a trade-policy reform - or, more generally, a macro-economic shock - on the distribution of household income for poverty (and inequality) analysis, i.e. on the micro-economic level. The methods considered here center all around so-called computable general equilibrium (CGE) models. On the one hand, they include the standard CGE approach with (one or) several representative households; on the other hand, they cover macro-micro simulations, subdivided into the top-down approach, the top-down/bottom-up approach, and the integrated approach. For each method, the Roundup provides a brief description, some applications, and a critical assessment

Climate protection through biochar in German agriculture: Potentials and costs

In recent years, there has been much discussion about biochar - a carbonaceous product made of biomass - as a promising technique for mitigating climate change. In particular, this method has the potential to remove carbon dioxide from the atmosphere for the long term by incorporating biochar into the soil while enhancing soil fertility at the same time. A research project conducted by DIW Berlin calculated the greenhouse gas mitigation potential and possible costs of using biochar in German agriculture. According to this study, approximately one percent of the greenhouse gas reduction target for 2030 could be met using biochar, but largely at a cost of over 100 euros per tonne of CO2. Ultimately, however, biochar's potential for reducing greenhouse gas emissions is limited by the availability of biomass. The possible agricultural benefits of biochar in the form of enhanced soil fertility could improve the greenhouse gas reduction potential and costs. This may be of particular relevance in tropical and subtropical regions

Quality Standards for Fruits and Vegetables: Help or Hindrance for Rural Development?

Horticulture has developed into one of the most dynamic agricultural sectors in the world. The cultivation of fruits and vegetables has significant potential for increasing agricultural income and reducing rural poverty, particularly in developing and emerging countries. However, it appears that the growing consolidation in the retail sector has shifted power relations along the value-added chain away from producers to retailers. In addition, food retailers rely more and more on their own quality standards. The growing significance of such private standards could help to guarantee the functioning of markets and, ultimately, market access. Yet, it could also increase bilateral dependencies and the risk that producers further up the supply chain are exploited. In turn, this could hinder market access, particularly for small-scale farmers. Public standards offer a reasonable alternative: they create transparency and equal rules for all market participants.Private Standards, Minimum Quality Standards, Rural Development, High-Value Crops

Klimaschutz durch Biokohle in der deutschen Landwirtschaft: Potentiale und Kosten

Seit einigen Jahren wird Biokohle - ein kohlenstoffreiches Produkt aus Biomasse - als eine viel versprechende Klimaschutzoption diskutiert. Insbesondere besteht die Möglichkeit, der Atmosphäre langfristig Kohlenstoffdioxid zu entziehen, indem Biokohle in den Boden eingearbeitet wird. Gleichzeitig könnte dadurch die Bodenfruchtbarkeit erhöht werden. Im Rahmen eines Forschungsprojekts wurden am DIW Berlin mögliche Potentiale und Kosten der Treibhausgasvermeidung durch einen Einsatz von Biokohle in der deutschen Landwirtschaft berechnet. Demnach könnte durch Biokohle ungefähr ein Prozent des für 2030 angestrebten Treibhausgasreduktionsziels erreicht werden, dies jedoch größtenteils zu Kosten von über hundert Euro pro Tonne CO2. Dabei sind die Potentiale zur Treibhausgasvermeidung durch die Verfügbarkeit der Biomasse beschränkt. Der mögliche landwirtschaftliche Zusatznutzen der Biokohle in Form von erhöhter Bodenfruchtbarkeit könnte ihre Treibhausgasvermeidungspotentiale und -kosten verbessern. Dies dürfte in tropischen und subtropischen Regionen besonders relevant sein.In recent years, there has been much discussion about biochar - a carbonaceous product of heating biomass - as a promising technique for mitigating climate change. In particular, this method has the potential to remove carbon dioxide from the atmosphere in the long term by incorporating biochar into the soil while enhancing soil fertility at the same time. A research project conducted by DIW Berlin calculates the greenhouse gas mitigation potential and possible costs of using biochar in German agriculture. According to this study, approximately one percent of the greenhouse gas reduction target for 2030 could be met using biochar, but largely at a cost of over a hundred euros per tonne of CO2. With this technique, however, the potential for reducing greenhouse gas emissions is limited by the availability of biomass. The possible agricultural benefits of biochar in the form of enhanced soil fertility could improve the greenhouse gas reduction potential and costs. This may be of particular relevance in tropical and subtropical regions

The Strategic Use of Private Quality Standards in Food Supply Chains

This paper highlights the strategic role that private quality standards play in food supply chains. Considering two symmetric retailers that are exclusively supplied by a finite number of producers and endogenizing the producers' delivery choice, we show that there exist two asymmetric equilibria in the retailers' quality requirements. The asymmetry is driven by both the retailers.incentive to raise their buyer power and the retailers' competition for suppliers. We find that the use of private quality standards is detrimental to social welfare. A public minimum quality standard can remedy this unfavorable welfare outcome.Private quality standards, vertical relations, buyer power, food supply chain

Technical Greenhouse-Gas mitigation potentials of biochar soil incorporation in Germany

Biochar is a carbon-rich solid obtained from the heating of biomass in the (near) absence of oxygen in a process called pyrolysis. Its deployment in soils is increasingly discussed as a promising means to sequester carbon in soils and, thus, to help mitigate climate change. For a wide range of feedstocks and scenarios and against the baseline of conventional feedstock management, we calculate the technical greenhouse-gas mitigation potentials of slow-pyrolysis biochar in 2015, 2030 and 2050 when the biochar is incorporated into agricultural soils in Germany and when the by-products from biochar production - pyrolysis oils and gases - are used as renewable sources of energy. Covering the greenhouse gases carbon dioxide, methane and nitrous oxide, our analysis reveals that biochar allows for an annual technical greenhouse-gas mitigation potential in Germany in the range of 2.8-10.2 million tonnes of carbon-dioxide equivalents by 2030 and 2.9-10.6 million tonnes of carbon-dioxide equivalents by 2050. This corresponds to approximately 0.4-1.5% and 0.3-1.1% of the respective German greenhouse-gas reduction targets in 2030 and 2050

Global food security

According to the current report on the Millennium Development Goals (UN 2015), the share of undernourished people living in the developing world has fallen from 23.3% in 1990-1992 to 12.9% in 2014-2016 (projection). Despite this progress towards global food security, about 795 million people worldwide (or 780 million people in developing regions) will remain undernourished in 2014-2016 (UN 2015). Put differently, more than 10% of the world population still suffers from chronic hunger (FAO et al. 2015). Moreover, globally, one in seven children under age five are projected to be underweight in 2015 and one in four were stunted in 2013, i.e. had inadequate height for their age (UN 2015) - not only causing current hardship and pain but also leading to adverse long-term effects (see Lehmann-Uschner 2015). Against this background, global food security will feature prominently in the emerging post-2015 development agenda, such as the Sustainable Development Goals (UN 2015). Food security is defined as a status in which "all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life" (FAO 1996: Paragraph 1). The main challenges to global food security in the medium- to long-term range from a growing world population to more resource-intensive diets, bioenergy generation and climate change. Already today, these developments account at least partly for the current rise in agricultural commodity prices. In addition to the fight against poverty, proposed solutions to meet the challenges include a sustainable intensification of agricultural production, reductions in yield losses and food wastes, open trade regimes, emission-saving agricultural practices and shifts in consumer preferences towards more sustainable demand patterns

The Strategic Use of Private Quality Standards in Food Supply Chains

Agribusiness,