The potential for new donkey farming systems to supply the growing demand for hides

The demand for donkey hides for ejiao, a Traditional Chinese Medicine, has resulted in rapidly increasing prices for donkey hides and donkeys. This has put pressure on donkey populations globally and has implications for donkey welfare and the livelihoods of those who rely on donkeys as working animals. The aim of the research was to explore the feasibility of setting up new donkey farming systems to supply the rising demand for ejiao using a system dynamics model of donkey production. Results show that the size of the initial female breeding herd, reproductive performance, age of reproduction, percentage of female births and average breeding life of donkeys are key variables affecting the time to build up the donkey population to supply the demand for hides, which will be at least ten to fifteen years. The implications of this are: (i) prices for donkey hides will continue to increase, (ii) companies producing ejiao will use other ingredients, (iii) China will continue to source donkey hides from around the world, and (iv) there will be continued theft and illegal trade of donkeys and concerns for rural households reliant on donkeys for their livelihoods and adverse impacts on donkey welfare

Agricultural and Rural Household Income Statistics

Farm Management,

Why economic valuation does not value the environment: climate policy as collective endeavour

Economics takes an individualistic approach to human behaviour. This is reflected in the use of “contingent valuation” surveys to conduct cost benefit analysis for economic policy evaluation. An individual’s valuation of a policy is assumed to be unaffected by the burdens it places on others. We report a survey experiment to test this supposition in the context of climate change policy. Willingness to pay for climate change mitigation was higher when richer individuals were to bear higher costs than when, as is usual, no explicit information was provided about cost distribution. This result is inconsistent with the usual interpretation of contingent valuation data. It also suggests that the data may be biased indicators of policy acceptance. Additional survey questions suggest that a collective mode of reasoning is common

Community projects: an experimental analysis of a fair implementation process

We define and experimentally test a public provision mechanism that meets three basic ethical requirements and allows community members to influence, via monetary bids, which of several projects is implemented. For each project, participants are assigned personal values, which can be positive or negative. We provide either public or private information about personal values. This produces two distinct public provision games, which are experimentally implemented and analyzed for various projects. In spite of the complex experimental task, participants do not rely on bidding their own personal values as an obvious simple heuristic whose general acceptance would result in fair and efficient outcomes. Rather, they rely on strategic underbidding. Although underbidding is affected by projects’ characteristics, the provision mechanism mostly leads to the implementation of the most efficient project

An analysis of the role of financialisation, China and stockholding in agricultural commodity price movements

A wide range of commodity prices experienced a large peak in 2007/08, including many agricultural commodities. Since then agricultural commodity prices have remained at relatively high levels compared to the recent past and several agricultural commodities (e.g. maize and sugar) have experienced further, although smaller peaks. Studies of the recent commodity price movements have focused on financialisation, China, low stocks and biofuels. This thesis explores the role of three of these factors in agricultural commodity price formation, namely, financialisation, China and stockholding. Biofuels were analysed in work for my previous employer. The second chapter uses Granger-causality methods to assess whether index investor positions influence agricultural futures prices. Four extensions are explored that might overcome the limitations of Granger-causality tests in this context. Firstly, the analysis is extended to less liquid markets. Liquid markets tend to be relatively efficient and for those markets the semi-strong form of the Efficient Market Hypothesis suggests that prices should not be forecastable as new information is swiftly impounded in prices. Even if index investment had price impact finding Granger-causality based on weekly data would be surprising. In less liquid markets prices are likely to adjust more slowly to new information. Three further extensions are examined: long-horizon tests, using relative returns instead of returns and an index of positions instead of positions in individual markets. The analysis supports the conclusion that no impacts are discernible for liquid markets. However, Granger-causality is established in the less liquid soybean oil and livestock markets. Thus, there is clear evidence that index investment has been a factor influencing the level of grains and livestock prices in illiquid markets over the five years 2006-11.These results lead to the conjecture that index investment does also have price impact in liquid markets but that market efficiency prevents the detection of this impact using Granger-causality tests. Chapter 3 investigates the potential impacts of changes in Chinese stockholding and self-sufficiency policies on world wheat prices. Whether or not the decrease in world grain stocks around the middle of the 2000s has had a significant impact on world prices in the last decade is controversial. Since most of the decrease in stocks was due to decreases in China, the main issue is the role that China has played on world markets. So far most studies that address this question have relied on informal arguments rather than formal modelling of the stocks-trade-price relationships. More recently the impact of possible changes to China’s self-sufficiency policy on world markets has become the focus of attention. Trade and other grains policies are closely linked. Any impact of changes in grain policy in China will be transmitted to the world market through changing trade patterns. The model shows that a move away from autarky reduces stock levels in China and in the rest of the world resulting in lower global stock levels. In the two scenarios where China imports but does not export global stocks decline by 23 and 32 per cent, respectively, compared to autarky. In the two free trade scenarios, global stocks reduce by 38 and 44 per cent, respectively, compared to autarky. These reductions in stock levels when a country moves from autarky to trading with the rest of the world do not lead to an increase in price variation and, more importantly for policy-makers, do not lead to increases in extreme price movements. In the free trade scenarios, extreme price movements are even reduced despite much lower stock levels. Chapter 4 introduces a new approach to testing the competitive storage model which has been the main workhorse of the analysis of the role of storage in commodity price formation over the last decades. The relationship between storage and prices is complex. Stock levels depend on current prices and expected future prices. At the same time, the current prices and the futures expected price depend on the level of stocks carried forward from the current period to future periods. The main approach to testing the competitive storage model has been the comparison of the characteristics of the predicted price series with actual commodity price series. In this study a different approach is taken. A relatively simple model is taken to the experimental laboratory. Participants in the experiment are asked to make storage decisions within a competitive storage model framework. Participants’ behaviour in the experiment deviated from the behaviour predicted by the competitive storage model in a number of ways. The predicted relationship between the amount of wheat available and storage is non-linear in the model but is linear in the experiment. In addition, storage is more sensitive to “wheat” in storage than “wheat” harvested when the model suggests that the effect of wheat in storage and wheat from harvest should the same. Furthermore, average storage tends below the optimal level and storage does not vary as much as predicted by the competitive storage model. The resulting price series tend to be more variable than would be the case if stockholders behaved according to the competitive storage model

Are stockholders rational? An experimental approach to testing the competitive storage model

The competitive storage model has been the main workhorse of the analysis of the role of storage in commodity price formation since Gustafson proposed his model in 1958. The main approach to testing the competitive storage model has been the comparison of the characteristics of the predicted prices series with actual commodity price series. This paper introduces a new approach to testing the competitive storage model. A relatively simple model is taken to the experimental laboratory. Participants in the experiment are asked make storage decisions within a competitive storage model framework. Their behaviour and the resulting price series are compared to the model assumptions and predictions. The experiment will be run at the University of Trento in April 2014

An Experimental Approach to Testing the Competitive Storage Model

A new approach to testing the competitive storage model is introduced. A relatively simple model is taken to the experimental laboratory. Market outcomes in the experiment deviate from the predictions of the competitive storage model in a number of ways. Average storage and the variability of storage are below the levels predicted by the competitive storage model. The resulting price series, therefore, tend to be more variable than would be the case if stockholders behaved according to the competitive storage model. In addition, the predicted relationship between availability and storage is non-linear but is linear in the experiment

Demand for donkey hides and implications for global donkey populations

Since antiquity donkey products have been attributed medicinal, rejuvenating and beautifying properties. In China medicinal and rejuvenating effects have been attributed to a gelatin, called ejiao, produced from donkey hides. In this paper, we analyse the demand for and supply of donkey hides. Ejiao has a long tradition in Traditional Chinese Medicine but it used to be a product reserved for the elite in Chinese society. A number of drivers have substantially increased the demand for ejiao over the last three decades. Economic development has made ejiao affordable for a much larger section of the Chinese population and it is now one of the most widely used products in Traditional Chinese Medicine. Over the last few years, the Chinese government has put policies in place to increase the use of Traditional Chinese Medicine, leading to a further increase in demand for ejiao. We conclude, therefore, that overall demand for ejiao is likely to continue to increase. We analyse the supply of donkey hides in China and globally. The rapid economic development in China has not only led to an increase in demand for ejiao but also to a rapid decrease in the domestic supply of donkeys. We use systems dynamics modelling to assess the potential of donkey farming in China in the medium and longer term. Our modelling exercise shows that even under very optimistic assumptions, current attempts to increase donkey farming in China will not meet the demand in the short term but has potential in the medium to longer term. Thus, international trade in donkey hides is likely to continue to play an important role, at least in the short term and a number of countries have given permission for donkey slaughter houses to be built. We use the systems dynamics model to assess the potential of countries to sustainably supply donkey hides over the next decade. The model shows that trade can contribute to the supply of donkey hides but it will be not possible to meet the current demand. Thus prices are likely to continue to increase. We conclude that there is currently a shortfall in supply of donkey hides that cannot be met either within China or from other countries. For this reason, fake ejiao products and illegal activities are likely to continue to characterise the donkey hide and ejiao markets

The Importance of Moral Intensity: An Application to Ethical Food Issues

In this study we analyse moral decision making in a food related setting. Jones (1991) argues that ethical issues vary in their perceived moral intensity, where moral intensity is “the extent of issuerelated moral imperative in a situation”. According to Jones, moral intensity is an issue-related construct that is made up of six main components: magnitude of consequences, social consensus, probability of effect, temporal immediacy, proximity and concentration of effect. The moral intensity of an issue affects all stages of moral decision making. We measure the relative importance of different dimensions of moral intensity in a food related setting. We carry out a survey to investigate the impact of varying components of moral intensity in two setting where a food producer sells potentially harmful products. The aim is to measure how changes in these dimensions impact on individuals’ assessment of these dimensions as well as two stages in the ethical decision process.. We find a complexity of issues relating to how people consider morality in food production and consumption and the importance of the specific context to moral decision making