Agriculture in the Age of Globalization

This paper aims at analyzing the asymmetries in the process of globalization and its differentiated outcomes on (i) developed and less developed countries, and (ii) on LDC agriculture. The consequences of these asymmetries are reflected in the dramatic changes in world agricultural trade an unprecedented growth of agricultural trade in real terms and a dramatic change in its composition which is increasingly moving away from bulk commodities towards high-value, processed consumer-ready agricultural goods. The impacts of these changes on LDC agriculture have been quite differentiated, with most countries experiencing a worsening of their agricultural trade balance. This change of the LDC trade position is counterintuitive if we still think of agricultural trade as a comparative-advantage-based trade, i.e. based on cost competition. It seems instead that the change in the composition of agricultural trade is the epiphenomenon of a fundamental change in the rules of the game, which are increasingly based on the reputation of agricultural products and imply a quality-based competition. Unfortunately, the implications for LDC agriculture do not seem encouraging. The intrinsic poverty of these economies, with the implied burden in terms of missing assets to compete under the new rules of the game and some adverse globalization-induced changes in LDCs macro fundamentals, are crucial handicaps that work against the development of LDC agriculture. Furthermore, the underlying forces driving globalization (increasing returns to scale, research, development of new products, etc.) undermine the traditional role of agriculture as engine of growth. The analysis carried out in this paper represents one more piece of evidence that the effects of globalization are asymmetric and that development success requires selective and phased integration with world markets. Without the required investments in terms of infrastructure, institutions, human and social capital, LDC agriculture will hardly be able to claim the expected benefits of globalization.globalization, agriculture, LDCs, International Relations/Trade, O13, Q17,

The Distributive Impact of the Water Market in Chile: A Case Study in Limari Province, 1981- 1997

The introduction of a strong market-oriented economic policy after the 1973 golpe in Chile led to economic reforms during the 1980s, characterised by deregulation, decentralisation and privatisation of several economic sectors. The reform of the water sector took place as part of this trend. Its overall objective was to increase water-use efficiency, implementing a private management model based on the development of water markets. The model represents the most profound reform that has ever been carried out worldwide in this sector, due to its radical neo-liberal conception and to its duration (in force since 1981). Many studies have been carried out focusing mainly on the efficiency impact of the reform but no one on its distributive effects. This paper aims to fill this gap. The case study (Limarí Province, IV Region) examines the distributive impacts on the relevant population (in particular on the poor and the most vulnerable groups, like peasants) through the analysis of all water use rights transactions which have taken place in the area from 1981 to 1997, and the determinants of peasants' participation in water market, using survey data from a significant sample (2.4%) of peasant households in the area. The study shows that the distribution of water rights has worsened since 1981. Namely, peasants' share of water rights decreased significantly as time went on, both in aggregate and per capita terms, undermining their agricultural production potential and leading to a deterioration of their standards of living. Moreover, the share in water rights by the agricultural sector as a whole decreased, while that by non-agricultural sectors increased. The study shows also that peasants access water resources primarily through the claim of original rights and enter only marginally the water market, usually as sellers, showing a weak bargaining power. Their behaviour in the water market is determined by well identified social, economic and institutional variables, such as the age of the head of household, the educational level of the family, the participation in agricultural organisations, the managerial positions in water users' associations, the access to information in local water market, the access to credit and the crop mix

Distributive impacts of alternative agricultural policies: A SAM-based analysis for Italy

This paper assesses the distributive impacts of alternative agricultural policies in a SAM (social accounting matrix) framework. A SAM of the Italian economy has been properly modified in order to focus on agriculture. In doing so, a new method for disaggregating the institutional sectors and the production factors in a SAM framework has been proposed. Two types of analysis have been carried out: (i) a multiplier analysis, and (ii) an assessment of the distributive impacts of different sector policies. The main results can be summarised as follows: (i) ‘fully’ decoupled agricultural household income supporting schemes (transfers to agricultural households) are the most equitable interventions and determine a perfect targetVof the distributive effect on the relevant institutional sectors; (ii) ‘partially’ decoupled income supporting interventions, such as the ones implemented under the CAP before the Mid Term Review, are more effective than others (i.e., through multiplier effects) in indirectly generating positive impacts on the income of agricultural households; (iii) agricultural price support interventions show less desirable effects in terms of their distributive impacts: they are less effective as agricultural income-increasing policies and their distributive impacts are biased against poorer households both in agricultural and non-agricultural sectors.social accounting matrix (SAM), income distribution, Common Agricultural Policy

Agriculture and Income Distribution: Insights from a SAM of the Italian Economy

The paper presents the results of the first SAM analysis of the agricultural sector in Italy. A SAM of the Italian economy has been properly modified in order to focus the analysis on agriculture. Two type of analysis have been carried out: (i) a multiplier analysis, and (ii) an assessment of the distributive impacts of different agricultural policies. This paper proposes also a new method for disaggregating the institutional sectors and production factors in order to analyze income distribution within the economy, with special emphasis on the agricultural sector. Main results are: (i) "fully" decoupled income supporting schemes (transfers to agricultural households) are the most equitable interventions and determine a perfect targeting of the distributive effect on the relevant institutional sectors; (ii) "partially" decoupled income supporting interventions, as the ones implemented under the current CAP, are more effective than others in indirectly (i.e., through multiplier effects) generating positive impacts on the income of agricultural households; (iii) agricultural price support interventions show less desirable effects in terms of their distributive impacts: they are less effective as agricultural income-increasing policies and their distributive impacts are biased against poorer households both in agricultural and non-agricultural sectors.Social accounting matrix, agriculture, income distribution, Italy, Labor and Human Capital, R13, R15, Q18, E25,

Preferences, trust and willingness to pay for food information: An analysis of the Italian Market

Lack of consumer trust and communication strategies are probably the main determinants of information failure in modern food markets. This study attempts to tackle these aspects affecting the quality of food information by investigating questions related to what topics are more relevant to consumers, who should disseminate trustful food information, and how communication should be conveyed. Primary data were collected both through qualitative (in depth interviews and focus groups) and quantitative research. Quantitative research was conducted by means of a questionnaire administered in 2006-2007 to a sample of Italian respondents using both a web and a traditional mail survey. Reading preferences, willingness to pay and trust towards public and private sources conveying information through a hypothetical food magazine were assessed combining factor analysis, choice modelling and a criterion-based market segmentation. The study shows that reading preferences of Italian consumers can be summarized along three dimensions: agro-food system, enjoyment and wellness. Furthermore, willingness to pay for receiving food-related information is influenced by trust towards the type of publisher, which plays also a key role in market segmentation together with socio-demographic and economic variables such as gender, age, presence of children and income. Policy implications of these findings are discussed.food information, trust, preference heterogeneity, segmentation, Italy, Food Consumption/Nutrition/Food Safety, D12, D18, D89, Q18,

Segmenting the Italian coffee market: marketing opportunities for economic agents working along the international coffee chain

Globalization, either directly or indirectly (e.g. through structural adjustment reforms), has called for profound changes in the previously existing institutional order. Some changes adversely impacted the production and market environment of many coffee producers in developing countries resulting in more risky and less remunerative coffee transactions. This paper focuses on customization of a tropical commodity, fair-trade coffee, as an approach to mitigating the effects of worsened market conditions for small-scale coffee producers in less developed countries. fair-trade labeling is viewed as a form of “de-commodification” of coffee through product differentiation on ethical grounds. This is significant not only as a solution to the market failure caused by pervasive information asymmetries along the supply chain, but also as a means of revitalizing the agricultural-commodity-based trade of less developed countries (LDCs) that has been languishing under globalization. More specifically, fair-trade is an example of how the same strategy adopted by developed countries’ producers/ processors (i.e. the sequence product differentiation - institutional certification - advertisement) can be used by LDC producers to increase the reputation content of their outputs by transforming them from mere commodities into “decommodified” (i.e. customized and more reputed) goods. The resulting segmentation of the world coffee market makes possible to meet the demand by consumers with preference for this “(ethically) customized” coffee and to transfer a share of the accruing economic rents backward to the Fair-trade coffee producers in LDCs. It should however be stressed that this outcome cannot be taken for granted since investments are needed to promote the required institutional innovations. In Italy FTC is a niche market with very few private brands selling this product. However, an increase of FTC market share could be a big commercial opportunity for farmers in LDCs and other economic agents involved along the international coffee chain. Hence, this research explores consumers’ knowledge of labels promoting quality products, consumption coffee habits, brand loyalty, willingness to pay and market segmentation according to the heterogeneity of preferences for coffee products. The latter was assessed developing a D-efficient design where stimuli refinement was tested during two focus groups.fair-trade coffee, product decommodification, choice experiments, International Relations/Trade,

Costs and Benefits of Compliance for HACCP Regulation in the Italian Meat and Dairy Sector

Food Consumption/Nutrition/Food Safety,