Consequences of BSE disease outbreaks in the Canadian beef industry

This study examines farm to wholesale prices spreads to measure the impact of the BSE disease outbreak on the Canadian beef industry. The study uses structure break tests developed by Gregory and Hansen (1996) and Hansen (1992) examine possible breaks within co integrating relationships. The study finds evidence that the industry began realignment as a result of the UK BSE disease outbreak, and the Canadian BSE disease outbreak was simply the largest realignment of the process beginning with the UK disease outbreak. However, the only statistically significant break was the BSE disease outbreak itself in May 2003. Stability was not restored until the border was reopened in 2005. Specific results indicated that the processing sector exploited the border closure in May 2003 to enhance its market power and that the system returned to a competitive one after the border re-opened in July 2005.Beef industry, price transmission, BSE, market power, parameter instability, cointegration with structural break, Agribusiness, Agricultural and Food Policy, Agricultural Finance, GA, IN,

Efficiency and Heterogeneity in Czech Food Processing Industry

Agribusiness,

BSE Disease Outbreaks, Structural Change and Market Power in the Canadian Beef Industry

This study examines farm to wholesale prices spreads to measure the impact of the Bovine Spongiform Encephalopathy (BSE) disease outbreak on the Canadian beef industry. The study uses structure break tests developed by Gregory and Hansen (1996) and Hansen (1992) examine possible breaks within cointegrating relationships. The study finds evidence that the industry began a realignment as a result of the UK BSE disease outbreak, and the Canadian BSE disease outbreak was simply the largest realignment of the process beginning with the UK disease outbreak. However, the only statistically significant break was the BSE disease outbreak itself in May 2003. Stability was not restored until the border was reopened in 2005. Specific results indicated that the processing sector exploited the border closure in May 2003 to enhance its market power and that the system returned to a competitive one after the border re-opened in July 2005.BSE, market power, Canada, beef industry, Agribusiness, Industrial Organization, International Relations/Trade,

Agriculture in the Face of Changing Markets, Institutions and Policies: Challenges and Strategies

Since the late 1980s, agriculture in Central and Eastern European Countries (CEECs) has been under considerable adjustment pressure due to changing political, economic and institutional environments. These changes have been linked to the transition process, as well as the ongoing integration into the European Union and the world market. Reduced subsidies, increased environmental and food quality demands, as well as structural changes in the supply, processing and food retailing sector call for major structural adjustments and the improvement of farmersâ managerial abilities. Though such changes always carry significant threats to farms, they also offer new opportunities for the farms' entrepreneurial engagement. Upcoming changes in the agricultural environment and their possible consequences for farm structures across Europe are thus still timely subjects. The objective of the IAMO Forum 2006 is to contribute to the success of agriculture in the CEECs, as well as their neighboring countries, in todayâs increasingly competitive environment. Concrete questions the conference focuses on are: What are the most suitable farm organizations, cooperative arrangements and contractual forms? How to improve efficiency and productivity? Where do market niches lie and what are the new product demands? This book contains 33 invited and selected contributions. These papers will be presented at the IAMO Forum 2006 in order to offer a platform for scientists, practitioners and policy-makers to discuss challenges and potential strategies at the farm, value chain, rural society and policy levels in order to cope with the upcoming challenges. IAMO Forum 2006, as well as this book, would not have been possible without the engagement of many people and institutions. We thank the authors of the submitted abstracts and papers, as well as the referees, for their evaluation of the abstracts from which the papers were selected. In particular, we would like to express our thanks to OLIVER JUNGKLAUS, GABRIELE MEWES, KLAUS REINSBERG and ANGELA SCHOLZ, who significantly contributed to the organization of the Forum. Furthermore, our thanks goes to SILKE SCHARF for her work on the layout and editing support of this book, and to JIM CURTISS, JAMIE BULLOCH, and DÃNALL Ã MEARÃIN for their English proof-reading. As experience from previous years documents, the course of the IAMO Forum continues to profit from the support and engagement of the IAMO administration, which we gratefully acknowledge. Last but not least, we are very grateful to the Robert Bosch Foundation, the Federal Ministry of Nutrition, Agriculture and Consumer Protection (BMELV), the German Research Foundation (DFG), the Haniel Foundation and the Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO) for their respective financial support.Agribusiness, Community/Rural/Urban Development, Farm Management, Industrial Organization, International Development, Labor and Human Capital, Land Economics/Use, Productivity Analysis,

The Institutional Support of Agricultural Loans and its Role in Czech Agriculture

The paper deals with the analysis of the institutional support of agricultural loans and its role in Czech agriculture based on the dynamic optimal model. The dynamic optimization problem is solved by the Lagrange method. The application of the theoretical model shows that the lower is the interest rate paid by the farmer the lower is the optimal consumption and consequently the farmer is willing to employ higher part of the capital in the production. Thus, the initial capital is more effectively employed. The time series analysis shows that the SGAFF's activities significantly support the farmer's investments. In spite of the problems in the setting of the SGAFF's policy, the role of the SGAFF in financing of agricultural activities can be regarded to be positive in the analyzed period

Technological change in the Czech food processing industry: What did we experience in the last decade?

The paper examines the contribution of technological change to changes in technical efficiency and TFP (Total Factor Productivity). The results show that the technological change did not contribute significantly to the development of efficiency in all analyzed sector. However, the distribution of technical change suggests that the gap between the best and worst food processing companies increased within the analyzed period. On the other hand, the technological change was an important factor determining the TFP increase in all sectors

INVESTMENT, CREDIT CONSTRAINTS AND PUBLIC POLICY IN A NEOCLASSICAL ADJUSTMENT COST FRAMEWORK

This paper deals with the analysis of the impact of credit rationing on the farmer’s economic equilibrium and the analysis of different policy scenarios in a derived neoclassical adjustment cost framework. The theoretical model is an optimal dynamic investment model, in which the upper bound on investment is introduced. The limit of the investment enables to analyse the consequence of the occurrence of credit rationing on farmer’s capital accumulation, investment and supply. The method of optimal control is used to solve the optimization problem. The results show that the occurrence of credit rationing may significantly determine a farmer’s economic equilibrium. Then the analysis of defined policy scenarios suggests that a loan guarantee efficiently solves the problem of the occurrence of external credit rationing. Interest rate subsidy may produce overinvestment and, thus, increases the probability of occurrence of the crowding-out effect, especially in the group of non-credit constraint farmers. Moreover, as far as the cost of agricultural policy is concerned, other agricultural support tools are less effective. The numerical application shows that the farmer’s economic equilibrium is mostly sensitive to the initial bound on investment, the parameter of the cost function, the price, the level of technology and the discount rate. Finally, if the uncertainty is introduced, then the level of investment spending and capital accumulation is lower

The Institutional Support of Agricultural Loans and its Role in Czech Agriculture

The paper deals with the analysis of the institutional support of agricultural loans and its role in Czech agriculture based on the dynamic optimal model. The dynamic optimization problem is solved by the Lagrange method. The application of the theoretical model shows that the lower is the interest rate paid by the farmer the lower is the optimal consumption and consequently the farmer is willing to employ higher part of the capital in the production. Thus, the initial capital is more effectively employed. The time series analysis shows that the SGAFFs activities significantly support the farmers investments. In spite of the problems in the setting of the SGAFFs policy, the role of the SGAFF in financing of agricultural activities can be regarded to be positive in the analyzed period.SGAFF (Supporting and Guarantee Agricultural and Forestry Fund), dynamic optimization, agricultural output, investments., Agricultural Finance,

Heterogeneity in Technology and Efficiency – Specifics of the Food Processing Industry in the Visegrád Countries

The paper analyses the food processing industry in Visegrád countries. In particular, it deals with the analysis of heterogeneity in technology and efficiency. The introduced theoretical framework allows to capture inter- and intrasectoral differences in technology as well as the country specifics. The results show that both intersectoral heterogeneity and heterogeneity among firms are an important characteristic of EU food processing industry. Moreover, the country specific effects were pronounced for Czech, Hungarian and Polish dairy sector, Czech feedstuff sector, Polish, Hungarian and Slovak slaughtering sector. Moreover, we found that on average the food processing companies highly exploit their production possibilities. However, some food processing companies are falling behind. This holds for Slaughtering and Dairy sector in all Visegrád countries