Distribution Dynamics of Food Price Inflation Rates in EU: An Alternative Conditional Density Estimator Approach

Concepts and developments in the literature of economic growth and convergence have recently been adopted and used in the study of inflation rate convergence. This paper examines initially the existence of â-convergence, as mean reversion, of food price inflation rates in the European Union, using the stochastic convergence approach of panel data unit root tests. It examines also the existence of ó-convergence but in order capture sufficiently the evolving distributional dynamics, non-parametric econometric methods are implemented as well. An alternative conditional density estimator, proposed in the literature, is applied for this reason. This estimator is chosen as superior, not only to the restrictive discrete Markov chain approaches but also to the usual estimators of conditional densities using stochastic kernels. Monthly data on the EU harmonized consumer price indices of food and eleven specific food product subgroups are used, for the 15 older EU member states, covering the 1997-2009 period.Kernel density estimator, convergence, distribution dynamics, food price inflation

Assessing agricultural policy incentives for Greek organic agriculture: A Real options approach

The adoption of organic agriculture or livestock involves risk and uncertainty, and to overcome this, well designed schemes are required. Are the current support measures attractive for farmers who wish to convert to organic? At first, this study tries to assess the optimal investment trigger for a new comer into organic dairy sheep farming system and secondly, to evaluate the investment profitability of an existing organic farmer in his attempt to improve his farm. Results indicate that the framework of real options analysis is an appropriate form of analysis if the question of investment profitability is examined under risk and uncertainty and the role of economic subsidies offered to organic farmers is assessed.organic agriculture, dairy sheep farming, real options, agriculture policy, Agricultural and Food Policy, Farm Management, Land Economics/Use,

Assessing economic incentives for dairy sheep farmers: A real options approach

New policy measures have been introduced to transform Greece’s agriculture into a more modern and environmentally friendly agriculture. Adopting new technology and environmentally friendly production systems involves risk and uncertainty, which in turn stress the need for well designed policy schemes. This study attempts to examine the effects of income variability upon the decision to adopt new technology and environmentally friendly production systems by introducing the real options analysis to dairy sheep farming in Greece. The real options procedure revealed that the investment in new technology in dairy sheep farms under organic scheme is profitable. Attractive economic incentives that are offered by the applied agricultural policy to young farmers compensate for the risk and uncertainty of the activity.agricultural policy, organic sheep farming, real options, Livestock Production/Industries,

Policy implementations for organic agriculture: A real options approach

Organic farming has experienced a vast increase within the EU, despite the fact that it implies greater risk and uncertainty than that of conventional farming. This is the result of the increased environmental concern and the rising demand for quality food, which led to the implementation of the organic policy scheme. Nevertheless, the production of organic fruits, including cherries, is still limited in the EU. Farmers will adopt this alternative farming system only if the support provided by the existing policy regime out weights the increased risk and uncertainty. This study explores the effectiveness of the current policy measures for the production of organic cherries in Greece, using the real options methodology. The framework of real options analysis is an appropriate form of analysis so as to examine the investment’s profitability under risk and uncertainty and assess the economic incentives offered to organic farmers. The results indicate that the economic incentives provided by the existing policy regime, compensate for the risk and the uncertainty that farmers are undertaking. Furthermore, this study reveals that the profitability of the economic activity explored, lies mainly on the subsidies organic farmers receive.Keywords: organic agriculture, real options, agriculture policy, uncertainty, Agricultural and Food Policy, D81, Q14, Q18,

MODELLING ECONOMIC ALTERNATIVES FOR TOBACCO PRODUCERS: THE CASE OF SHEEP FARMING

After the introduction of the new tobacco regime, many regions in Greece, formerly specialized in tobacco cultivation, are now facing serious threats of economic and social decline. Sheep farming is considered by many analysts as a viable alternative to tobacco. This study analyses the financial performance of sheep production and the risk that producers are taking. Through a stochastic efficiency analysis with respect to a function we explore the economic viability of conventional and organic sheep farming; key factors determining the economic outcome of these activities are also investigated. Both organic and conventional sheep farming appear as viable alternatives. The viability of organic farming lies, mainly, in organic payments. Conventional farming generates a slightly lower but less uncertain net return.organic farming, dairy sheep, risk analysis, SERF, agricultural policy, Agricultural and Food Policy, Farm Management, Livestock Production/Industries, Risk and Uncertainty,

E conomic growth, regional cpnvergence and the role of agricultural sector: non parametric econometric approaches

The issue of economic convergence has been a major point of interest in the economicliterature of the last twenty years. Despite this fact, the relative literature is far fromthe adoption of one commonly accepted method of empirical research. However,more advanced methods have been recently developed to explore economicconvergence. These methods also offer the opportunity for a more efficientassessment of regional policy schemes.The main objective of this thesis is to explore in-depth the regional convergenceprocess in Greece and to reveal its special characteristics. To address this issue, weuse traditional statistics and econometrics as well as modern nonparametrictechniques. In this sense, static and dynamic econometric panel approaches areapplied as well as nonparametric techniques that describe the evolution of per capitaincome distribution. The second main objective of this research is the exploration ofthe role of the agricultural sector in the regional growth and convergence process inGreece. Finally, parallel to the aforementioned objectives, the issue of spatialdependence among the per capita income of Greek prefectures is also explored. Datacovers the period 2000-2008 and refers to the 51 Greek prefectures.Results indicate that the period 2000-2008 can be split up in two sub-periods, beforeand after 2004. While the first sub-period is characterized by intense convergencetrend, in the second sub-period a divergence trend appears. The application of thenonparametric approaches implicitly reveals the existing regional economicconvergence process, as well as the characteristics of the income distribution and itsevolution over time. Moreover, a negative relationship among regional economicgrowth and high dependency of the regional economy on agriculture is identified.However, agricultural productivity is positively correlated with income per capita.Additionally, results indicate the special role of the service sector, since highdependency of the regional economy in the service sector is positively related witheconomic growth. Thus, a restructuring of the agricultural sector with emphasis inactivities that are more productive and directly related with the service sector canencourage regional growth. Taking under consideration that this restructuring mainlyaffects poorer prefectures with high dependency on agriculture, it can also fosterregional economic convergence.Η μελέτη της οικονομικής σύγκλισης γνώρισε εντυπωσιακή άνθηση την τελευταίαεικοσαετία. Βέβαια, αδιαμφισβήτητο παραμένει το γεγονός ότι η σχετικήβιβλιογραφία απέχει από την καθιέρωση μιας γενικώς αποδεκτής μεθόδου ποσοτικήςδιερεύνησης των εννοιών σύγκλισης. Παρόλα αυτά, μέθοδοι περισσότεροικανοποιητικές αναπτύσσονται συνεχώς. Έτσι, μπορεί να αξιολογηθεί καλύτερα ηαποτελεσματικότητα περιφερειακών πολιτικών καθώς και η ακρίβεια θεωρητικώνπροβλέψεων.Βασικός σκοπός της παρούσας διατριβής είναι να διερευνήσει την ύπαρξηπεριφερειακής οικονομικής σύγκλισης στην Ελλάδα, να εκτιμήσει και να αξιολογήσειτα χαρακτηριστικά της. Η διερεύνηση γίνεται χρησιμοποιώντας τεχνικές που ανήκουντόσο στην παραδοσιακή στατιστική και οικονομετρία όσο και στη σύγχρονη μηπαραμετρική οικονομετρία. Ο δεύτερος βασικός στόχος της διατριβής είναι ηδιερεύνηση του ρόλου του γεωργικού τομέα στην περιφερειακή μεγέθυνση καισύγκλιση. Παράλληλα με τους δύο παραπάνω στόχους, διερευνάται και η ύπαρξηχωρικής συσχέτισης μεταξύ των κατά κεφαλήν εισοδημάτων των νομών της Ελλάδας.Τα δεδομένα που χρησιμοποιούνται αφορούν το κατά κεφαλήν εισόδημα των νομώντης Ελλάδας και την περίοδο 2000-2008.Τα αποτελέσματα δείχνουν ότι η περίοδος 2000-2008 μπορεί να χωριστεί σε δύουποπεριόδους, πριν και μετά το 2004. Κατά την πρώτη, παρατηρείται έντονη τάσηπεριφερειακής σύγκλισης, ενώ κατά τη δεύτερη παρατηρείται τάση απόκλισης. Ηεφαρμογή των μη παραμετρικών μεθοδολογιών αποκαλύπτει με πολύ μεγαλύτερηλεπτομέρεια τη διαδικασία περιφερειακής σύγκλισης, όπου υπάρχει, καθώς και ταιδιαίτερα χαρακτηριστικά της κατανομής του κατά κεφαλήν εισοδήματος και τηςδιαχρονικής της εξέλιξης. Αναφορικά με τον γεωργικό τομέα, παρατηρείται αρνητικήσχέση μεταξύ της εξάρτησης της οικονομίας από αυτόν και της οικονομικήςμεγέθυνσης. Παρόλα αυτά, διακρίνεται μία θετική σχέση μεταξύ του κατά κεφαλήνεισοδήματος και της αγροτικής παραγωγικότητας. Τα αποτελέσματα αναδεικνύουνεπίσης και την πολύ σημαντική επίδραση του τομέα των υπηρεσιών για την Ελλάδα,αφού η αυξημένη εξάρτηση μίας περιφερειακής οικονομίας από αυτόν συνδέεταιθετικά με το κατά κεφαλήν εισόδημα. Συνεπώς, μία αναδιάρθρωση του γεωργικούτομέα με έμφαση σε πιο παραγωγικές δραστηριότητες αλλά και σε δραστηριότητες που συνδέονται άμεσα με τον τομέα των υπηρεσιών μπορεί να ενισχύσει τηνπεριφερειακή ανάπτυξη. Με δεδομένο ότι η αναδιάρθρωση αυτή ευνοεί κυρίως τουςφτωχότερους νομούς με υψηλή «γεωργικότητα», μπορεί να συμβάλλει και στηνπεριφερειακή σύγκλιση

Assessing the Environmental Efficiency of Greek Dairy Sheep Farms: GHG Emissions and Mitigation Potential

One of the main ecological challenges that agricultural and especially livestock production systems face is the adoption of management practices that encourage the mitigation of greenhouse gas (GHG) emissions, while maintaining their production level. According to the relevant literature, the potential for GHG reduction lies mainly in greater efficiency in meat and dairy production, which suggests that the ecological modernization of livestock farms follows the efficiency/substitution pathway. This study aims to investigate the above assumption and explore the link between the technical efficiency (TE) and environmental efficiency (EE) of livestock farms using data envelopment analysis (DEA). The analysis focuses on dairy sheep farming, since the activity is important for the Greek rural economy while at the same time responsible for half of the country’s agricultural methane emissions. Results indicate that the correlation between technical and environmental efficiency of sheep farms is significant. Environmental efficiency is affected by farm size, specialization and production orientation. Feeding practices, like the ratio of concentrates to forage, also appear to have a positive effect on environmental efficiency. On the other hand, experienced farmers tend to have lower environmental efficiency, which may indicate their reluctance to adopt modern farming practices

Greenhouse Gas Emissions in Dairy Goat Farming Systems: Abatement Potential and Cost

Dairy goat farming is an important agricultural activity in the Mediterranean region. In Greece the activity offers occupation and income to thousands of families mainly located in mountainous and semi-mountainous areas of the country where it utilizes low productivity pastures and shrub lands. Furthermore, goats are more resilient to climate changes compared to other species, and are often characterized as ideal for keeping in drought areas. However, there is still limited evidence on total greenhouse gases (GHG) emitted from goat farms and their mitigation potential. In this context, this study aims to estimate GHG emissions of goat farms in Greece and explore their abatement options using an economic optimization model. Three case studies are explored i.e., an extensive, a semi-intensive and an intensive goat farm that correspond to the main goat production systems identified in Greece. The analysis aims to assess total GHGs as well as the impact of abatement on the structures, gross margins and labor inputs of the farms under investigation. The issue of the marginal abatement cost is also addressed. The results indicate that the extensive farm causes higher emissions/kg of milk produced (4.08 kg CO2-eq) compared to the semi-intensive and intensive farms (2.04 kg and 1.82 kg of CO2-equivelants, respectively). The results also emphasize the higher marginal abatement cost of the intensive farm. In all farm types, abatement is achieved primarily through the reduction of the livestock capital and secondarily by other appropriate farming practices, like substitution of purchased feed with homegrown feed

Distribution Dynamics of Food Price Inflation Rates in EU: An Alternative Conditional Density Estimator Approach

This paper examines the existence of convergence and distribution dynamics of food price inflation rates within the European Union. Differences in such specific price index inflation rates and changes in their regional distributions reflect largely differences and developments in market conditions and structures. Traditional measures and approaches to β-convergence and σ-convergence, fail to capture sufficiently the evolving distributional dynamics. The latter includes possible mobility prospects within distributions and potential formation of clubs. To deal with these issues, the paper adopts developments in the literature of non parametric econometric methods and employs an alternative conditional density estimator as well. Implementation of this estimator is superior, not only to the restrictive discrete Markov chain approaches, but also to the usual estimation of conditional densities using stochastic kernels. The adopted estimator has smaller integrated mean square error than the conventional estimators. Panel data analysis of β-convergence is conducted too, using panel unit root tests. Data used are the harmonized consumer price indices of food and eleven specific food product groups for 15 European countries, older member states of the EU. Extracted evidence based on the estimates is presented, analyzed, and conclusions are discussed