PRODUCTION VS. CONSUMPTION AND THE CARBON CONTENT OF TRADE – A WORLDWIDE ANALYSIS FOR AGRICULTURE

Environmental Economics and Policy, Resource /Energy Economics and Policy,

IMPACT OF PRODUCTIVITY GROWTH IN CROPS AND LIVESTOCK ON WORLD FOOD TRADE PATTERNS

World food trade patterns have changed in the last 40 years with the share of world trade comprised of bulk commodities falling, and the share of world food trade comprised of processed commodities rising. These changes have been driven by a combination of supply and demand forces. On the demand side, world demand for livestock products and more highly processed food products has been rising more rapidly than that for bulk products. This increasing demand can either be met from domestic production or from foreign production in the latter case resulting in increased international trade. The extent to which the increased demand can be met from domestic production depends importantly on the rate of productivity growth in the various components of the farm and food sector. This is why the relative rates of productivity growth in crops and livestock is also believed to be an important factor in determining the changing composition of trade. This study seeks to understand to what extent productivity growth in crops and livestock has affected world food trade patterns. We do so by first estimating total factor productivity growth in crops and livestock over the past four decades. The results show that productivity growth in crops has been larger in developed countries. However, non-ruminant productivity growth in developing countries has been larger. By incorporating these estimates into a back-casting exercise with the GTAP general equilibrium model, we hope to understand how these differential productivity growth rates have influenced the composition of world food trade.International Relations/Trade,

Biofuels Potential in Latin America and the Caribbean: Quantitative Considerations and Policy Implications for the Agricultural Sector

Rising oil prices has led to increased interest to replace domestic demand for liquid fuels for transport (petrol and diesel) with biofuel production (ethanol and biodiesel). One of the pioneers in biofuel production is Brazil, which since the 1970s has established a government program that promotes the production and consumption of ethanol. Currently, Brazil is the leading producer of ethanol in the world and has started also programs for biodiesel production based on soybeans, oil palm and other crops. Other countries in Latin America and the Caribbean have also expressed interest in biofuel production, and have started programs, and in some cases the legislation that promotes biofuel production. However, most of the analysis of biofuel crops has been focused in the major countries such as Brazil and Argentina. As most countries in the region embark in biofuel projects and establish national policies on biofuels, there is a need for a roadmap that looks into the technical considerations that biofuel production will require. Most government policies are driven by politics, and in some cases such as the discussion of food production versus biofuel production, there should be technical analysis of increased production of biofuels. For those reasons, this study offers the first complete assessment of the potential of biofuels in Latin America and the Caribbean for 28 countries in the region, based on 12 agricultural and forestry crops. We first identify the biofuel production potential based on current surplus production, as a catalyst of biofuel production in the region. We then estimate the land requirements based on a 5% replacement of domestic liquid fuel demand, and the suitable available area in each country for such replacement. We also project biofuel production and available land area needed to meet food and nutrition targets for countries in the region to 2025. The results of this study show that the crops with the largest potential in Latin America and the Caribbean are sugar canes and cassava. Based on current production levels the conversion of sugar cane into bioethanol could surpass the 5% mix in more than half of the domestic markets of the countries surveyed. For biodiesel, countries with current surplus production that could be transformed to biodiesel and exceed the 5% mix include Argentina, Bolivia, Paraguay, Costa Rica and Honduras. For land, Latin America, particularly South America may have enough suitable land for production of biofuels, specially sugar cane, soybeans and oil palm, the main crops identified in this study. As for food supply and security and the future production of biofuels to 2025, we find that for major food exporters, there is enough land for both food and energy crop production. However, there are some smaller countries, especially in Central America and the Caribbean that may have to decide whether to import food and produce energy from crops. In term of the effect on prices, we find that increased biofuel production may have important price effects the effect may depend we analyze energy crops, traditional crops or byproducts of biofuel production. Finally, in terms of the impact on agricultural structure and land ownership, the most significant structural changes consist in a higher concentration in production and tenure as well as the establishment of new kind of actors and norms. Policies and institutions should be established that enables small producers to take advantage of increased biofuel production, so they can benefit in terms of employment, income, as means for poverty reduction in rural areas of Latin America and the Caribbean.Biofuels, land availability, price effect, agricultural structure, Latin America, Caribbean, Resource /Energy Economics and Policy, Q42, Q48, Q11, Q15,

Domestic Support Policies for Agriculture in Ecuador and the U.S.-Andean Countries Free Trade Agreement: An Applied General Equilibrium Assessment

For the past two years the United States and Colombia, Peru and Ecuador have being negotiating a Free Trade Agreement (FTA). One of the main concerns of Ecuador's farmers is the asymmetry that exists between U.S. and Ecuador agricultural sectors. U.S. agriculture is highly subsidized in products such as rice, corn, and soybeans, products that represent an important export and subsistence products for Ecuadorian farmers. To reduce any negative effect that the FTA may have, Ecuador's government is studying land-based payments for rice, corn, soybeans and livestock producers. This program would offer direct initial support to farmers' income after the FTA enters in full effect. The objectives of this paper were twofold. First, estimate the effects on the Ecuadorian economy, and especially on Ecuador's agriculture of the FTA. And second, study the viability of the domestic support program for agriculture proposed by the Ecuadorian government, as well as some alternative domestic support policies. We use a modified version of the GTAP global general equilibrium model specific for agriculture support, called GTAP-AGR. The results show that trade liberalization will negatively affect all agricultural sectors in Ecuador, except for the exporting sectors (bananas, coffee, cocoa, and flowers). Government subsidies are estimated to disproportionally help rice and soybeans producers, but they will not be enough for corn and livestock producers. We conclude that government subsidies should be extended to other sector such as sugar cane and cotton.International Relations/Trade,

Agriculture Productivity Growth: Is the Current Trend on the Track to Poverty Reduction?

In this study we evaluate the effect of annual productivity growth in agriculture over the 1991-2001 period on poverty in eleven developing countries. We compare this with the optimal pattern of productivity growth of comparable cost with the sole goal of maximizing poverty reduction. This comparison reveals that regional agricultural development is a viable option in the fight for poverty reduction.Food Security and Poverty,

DEVELOPMENT OF A STOCHASTIC MODEL TO EVALUATE PLANT GROWERS' ENTERPRISE BUDGETS

Increased domestic concentration and international competition in the floricultural industry are forcing growers to improve resource management efficiency. Cost management and cost accounting methods are becoming key tools as growers attempt to reduce costs. These tools allow growers to allocate costs for each crop, increasing their greenhouse planning abilities. Growers have a relative high degree of risk due to potential crop and market failure. Individual growers have different tolerance for risk and risk bearing capacity. Growers need a cost accounting system that incorporates production and market risk, a system that allows them to make informed business decisions. The research reported in this paper developed a greenhouse budgeting model that incorporated risk to allow growers to compare production costs for flowers with different genetics and production technologies. This enables greenhouse growers to make production management decisions that incorporate production and market risk. The model gives growers the option of imputing their own production data to evaluate how various yield and price assumptions influence income and expense projections, and ultimately, profit. The model allows growers to compare total production cost and revenue varying grower type, production time, geographical location, operation size, and cost structure. The model evaluates budgets for growers who market to mass-market retail operations or wholesale intermediaries who sell to merchandisers or flower shops distribution channels. The model was demonstrated with sample data to illustrate how incorporating risk analysis into a grower's greenhouse budget model effects resource allocation and production decisions as compare to a budget model that does not incorporate risk. Deterministic and stochastic models were used to demonstrate differences in production decisions under various assumptions. The stochastic model introduced prices and flowering characteristics variability. The @Risk software was used to generate the random number simulation of the stochastic model, and stochastic dominance analysis was used to rank the alternatives. The result for both the deterministic and stochastic models identified the same cultivar as most profitable. However, there were differences in crop profits levels and rankings for subsequent cultivars that could influence growers' production choice decisions. The grower's risk aversion level influenced his/her choice of the most profitable cultivars in the stochastic model. The model summarizes the sources of variability that affect cost and revenue. The model enables the grower to measure effects that change in productivity might have on profit. Growers can identify items in their budget that have a greater effect on profitability, and make adjustments. The model can be used to allocate cost across activities, so the grower would be able to measure the economic impact of an item on the budget.Crop Production/Industries,

Productivity Growth and Convergence in Crop, Ruminant and Non-Ruminant Production: Measurement and Forecasts

There is considerable interest in projections of future productivity growth in agriculture. Whether one is interested in the outlook for global commodity markets, future patterns of international trade, or the interactions between land use, deforestation and ecological diversity, the rate of productivity growth in agriculture is an essential input. Yet solid projections for this variable have proven elusive particularly on a global basis. This is due, in no small part, to the difficulty in measuring historical productivity growth. The purpose of this paper is to report the latest time series evidence on total factor productivity growth for crops, ruminants and non-ruminant livestock, on a global basis. We then follow with tests for convergence amongst regions, providing forecasts for farm productivity growth to the year 2040. The results suggest that most regions in the sample are likely to experience larger productivity gains in livestock than in crops. Within livestock, the non-ruminant sector is expected to continue to be more dynamic than the ruminant sector. Given the rapid rates of productivity growth observed recently, non-ruminant and crop productivity in developing countries may be converging to the productivity levels of developed countries. For ruminants, the results show that productivity levels may be diverging between developed and developing countries.Malmquist index, productivity, convergence, projections, crops, livestock, Productivity Analysis, D24, O13, O47, Q10,

Medición de los rendimientos a escala y daños a escala en la evaluación natural y managerial del sector agrícola de América Latina y el Caribe, utilizando DEA

Este trabajo analiza la eficiencia unificada bajo tres enfoques natural disposability, managerial disposability, y bajo los dos anteriores juntos natural y managerial disposability. Además analiza los tipos de Rendimientos a Escala (RTS) y los Daños a Escala (DTS), en el sector agrícola de América Latina y El Caribe (ALC) durante el año 2012. Las diferentes medidas se estiman utilizando la técnica matemática no paramétrica Análisis de Envolvente de Datos (DEA), para la evaluación medioambiental, que permite descomponer el desempeño agrícola en medidas de eficiencia. Para ello, se utilizan las ocho variables convencionales de la agricultura: la alimentación animal, consumo de fertilizantes, reserva de capital-cultivo, reserva de capital-ganado, población económicamente activa, la tierra agrícola, valor de la producción agrícola y emisiones agrícolas. Los resultados obtenidos indican una mayor eficiencia bajo natural disposability en los países evaluados. Bajo este enfoque, la mayoría de los países presentan RTS constantes y RTS decrecientes, mientras bajo managerial disposability tienden a DTS constantes y DTS crecientesMinisterio de Economia y Competitividad TIN2013-46801-C4-1-rMinisterio de Economia y Competitividad P11-TIC-8052Junta de Andalucía P11-TIC-7124Junta de Andalucía SEJ-13

Evaluación del desempeño medioambiental del sector agrícola de América Latina y el Caribe bajo el supuesto de eficiencia natural y gerencial, utilizando DEA

This study uses the Data Envelopment Analysis to measure the agricultural environmental performance under the assumption of natural and managerial disposability, but also evaluates the Returns to Scale and Damages to Scale in Latin America and the Caribbean during 2012. Seven agricultural variables are analyzed: animal feed, fertilizers, capital stock, labor, land, value of the gross agricultural production and agricultural emissions (CO2eq). The results found that the Bahamas, Brazil, Chile, Costa Rica and Mexico attained the maximum efficiency level in all efficiency measurements. These countries present the best performances compared with the other countries evaluatedEste estudio utiliza el Análisis de Envolventes de Datos para medir el desempeño medioambiental agrícola de América Latina y el Caribe; con suposición de natural y managerial disposability, y rendimientos a escala y daños a escala; durante 2012. Se utilizan siete variables: alimentación animal, fertilizantes, reserva de capital, mano de obra, tierra, valor de la producción agrícola y emisiones agrícolas (CO2eq). Los resultados muestran que las Bahamas, Brasil, Chile, Costa Rica y México alcanzaron el máximo nivel de eficiencia en todas las mediciones de eficiencia. Estos países presentan el mejor desempeño en comparación con el resto de países evaluadosJunta de Andalucía SEJ-132Ministerio de Economia y Competitividad TIN2013-46801-C4-1-rJunta de Andalucía P11-TIC-805

Evaluación del desempeño medioambiental de Sector Agrícola de América Latina y el Caribe utilizando el DEA e Índice de Malmquist

El análisis de la productividad agrícola y su evaluación supone una importante base para elaborar políticas destinadas al desarrollo económico, para garantizar la seguridad alimentaria y mejorar la renta de los agricultores. La literatura es amplia en este tema, si bien son pocos los trabajos que evalúan la eficiencia medioambiental de la agricultura, en particular para América Latina y el Caribe (ALC). Este enfoque es esencial para el diseño de las políticas económicas y ambientales de cualquier Estado y, en definitiva, para el desarrollo sostenible de este sector. Esta investigación utiliza el Análisis Envolvente de Datos para evaluar la eficiencia medioambiental de 25 países de ALC bajo dos conceptos: natural disposability y managerial disposability. Se incorpora al análisis el índice de Malmquist para determinar el grado de desplazamiento, el progreso tecnológico, y la frontera de eficiencia para el periodo de 2000-2012. La medición de este índice se utiliza considerando que existe un cruce entre las fronteras de eficiencias de los dos años consecutivos. Se han considerado seis variables inputs: alimentación animal, fertilizantes, mano de obra agrícola, reserva de capital-cultivo, reserva de capital-ganado y la tierra agrícola; y dos variables outputs: producción agrícola y las emisiones de CO2 equivalente agrícolas. Los resultados indican mayor eficiencia bajo el supuesto de natural disposability siempre por arriba de la eficiencia bajo managerial disposability, sin embargo, en ambas fronteras hay evidencia de mejoras en la productividad debido a los progresos tecnológicos en los países evaluadosMinisterio de Economia y Competitividad TIN2013-46801-C4-1-rMinisterio de Economia y Competitividad P11-TIC-8052Junta de Andalucía P11-TIC-7124Junta de Andalucía SEJ-13