emerging biofuels outlook of effects on u s grain oilseed and livestock markets projections of u s ethanol production and its impacts on planted acreage crop prices livestock production and prices trade and retail food costs are presented under the assumption that current tax credits and trade policies are maintained the projections were made using a multi product multi country deterministic partial equilibrium model the impacts of higher oil prices a drought combined with an ethanol mandate and removal of land from the conservation reserve program crp relative to baseline projections are also presented the results indicate that expanded u s ethanol production will cause long run crop prices to increase in response to higher feed costs livestock farmgate prices will increase enough to cover the feed cost increases retail meat egg and dairy prices will also increase if oil prices are permanently 10 per barrel higher than assumed in the baseline projections u s ethanol will expand significantly the magnitude of the expansion will depend on the future makeup of the u s automobile fleet if sufficient demand for e 85 from flex fuel vehicles is available corn based ethanol production is projected to increase to over 30 billion gallons per year with the higher oil prices the direct effect of higher feed costs is that u s food prices would increase by a minimum of 1 1 over baseline levels results of a model of a 1988 type drought combined with a large mandate for continued ethanol production show sharply higher crop prices a drop in livestock production and higher food prices corn exports would drop significantly and feed costs would rise wheat feed use would rise sharply taking additional land out of the crp would lower crop prices in the short run but because long run corn prices are determined by ethanol prices and not by corn acreage the long run impacts on commodity prices and food prices of a smaller crp are modest cellulosic ethanol from switchgrass and biodiesel from soybeans do not become economically viable in the corn belt under any of the scenarios this is so because high energy costs that increase the prices of biodiesel and switchgrass ethanol also increase the price of corn based ethanol so long as producers can choose between soybeans for biodiesel switchgrass for ethanol and corn for ethanol they will choose to grow corn cellulosic ethanol from corn stover does not enter into any scenario because of the high cost of collecting and transporting corn stover over the large distances required to supply a commercial sized ethanol facility

household demand in rural china a two stage les aids model a complete demand system of chinese rural households is estimated using a two stage les aids model and pooled provincial and time series data from 1982 to 1990 for commodity groups food clothing fuel housing and other commodities demand is price inelastic housing and other commodities are luxury goods while clothing and food are necessities within the food group price elasticities range from 0 005 to 0 63 expenditure elasticities are lower for grains and higher for meat tobacco and alcohol the results imply a gap between food demand and supply growth therefore china will face pressure to import food

central bank design abstract starting with a blank slate how could one design the institutions of a central bank for the united states this paper explores the question of how to design a central bank drawing on the relevant economic literature and historical experiences while staying free from concerns about how the fed got to be what it is today or the short term political constraints it has faced at various times the goal is to provide an opinionated overview that puts forward the trade offs associated with different choices and identifies areas where there are clear messages about optimal central bank design

impact of modern agricultural technologies on smallholder welfare evidence from tanzania and ethiopia this paper evaluates the potential impact of adoption of improved legume technologies on rural household welfare measured by consumption expenditure in rural ethiopia and tanzania the study utilizes cross sectional farm household level data collected in 2008 from a randomly selected sample of 1313 households 700 in ethiopia and 613 in tanzania the causal impact of technology adoption is estimated by utilizing endogenous switching regression this helps us estimate the true welfare effect of technology adoption by controlling for the role of selection problem on production and adoption decisions our analysis reveals that adoption of improved agricultural technologies has a significant positive impact consumption expenditure in per adult equivalent terms in rural ethiopia and tanzania this confirms the potential role of technology adoption in improving rural household welfare as higher consumption expenditure from improved technologies translate into lower poverty higher food security and greater ability to withstand risk an analysis of the determinants of adoption highlighted inadequate local supply of seed access to information and perception about the new cultivars as key constraints for technology adoption

removal of u s ethanol domestic and trade distortions impact on u s and brazilian ethanol markets we analyze the impact of trade liberalization and removal of the federal tax credit in the united states on u s and brazilian ethanol markets using a multi market international ethanol model calibrated on 2005 market data and policies the removal of trade distortions induces a 23 2 percent increase in the price of world ethanol on average between 2006 and 2015 relative to the baseline the u s domestic ethanol price decreases by 14 1 percent which results in a 7 5 percent decline in production and a 3 2 percent increase in consumption the lower domestic price leads to a 2 5 percent rise in the share of fuel ethanol in gasoline consumption u s net ethanol imports increase by 192 8 percent brazil responds to the higher world ethanol price by increasing its production by 8 8 percent on average total ethanol consumption in brazil decreases by 3 2 percent and net exports increase by 61 9 percent relative to the baseline the higher ethanol price leads to a 4 7 percent increase in the share of sugarcane used in ethanol production the removal of trade distortions and 51 per gallon tax credit to refiners blending ethanol induces a 22 5 percent increase in the world ethanol price

inflation and welfare in a monetary economy it is in everyone s private interest to try to get someone else to hold non interest bearing cash and reserves but someone has to hold it all so these efforts must simply cancel out all of us spend several hours per year in this effort and employ thousands of talented and highly trained people to help us these person hours are simply thrown away wasted on a task that should not have to be performed at all

the impact of oil prices on bioenergy emissions and land use we evaluate how alternative future oil prices will influence the penetration of biofuels energy production greenhouse gas ghg emissions land use and other outcomes our analysis employs a global economy wide model and simulates alternative oil prices out to 2050 with and without a price on ghg emissions in one case considered based on estimates of available resources technological progress and energy demand the reference oil price rises to 124 by 2050 other cases separately consider constant reference oil prices of 50 75 and 100 which are targeted by adjusting the quantity of oil resources in our simulations higher oil prices lead to more biofuel production more land being used for bioenergy crops and fewer ghg emissions reducing oil resources to simulate higher oil prices has a strong income effect so decreased food demand under higher oil prices results in an increase in land allocated to natural forests we also find that introducing a carbon price reduces the differences in oil use and ghg emissions across oil price cases

technological change rediscovering the engine of productivity growth in china s rural economy abstract this paper focuses on measuring the relative importance of the role of technology versus that of institutional innovation in china s rural economy a six equation rice sector model explaining provincial level technology adoption yield and factor demand are econometrically estimated using data from china s 13 rice growing provinces for the period 1975 1990 growth decomposition analysis identifies technology adoption as the most important determinant of rice yield growth during 1978 1984 accounting for nearly 40 percent the change institutional reform accounted for 35 percent of the growth in 1985 1990 technology accounts for all of the increase in rice yields the study demonstrates earlier studies may have over estimated the impact of decollectivization

biofuels tax policies and oil prices in france insights from a dynamic cge model abstract the 2009 renewable energies directive red has set up ambitious targets concerning biofuel consumption in the european union by 2020 nevertheless budgetary constraints and growing concerns about the environmental integrity of first generation biofuels have imposed a phasing out of the fiscal instruments to promote them focusing on france this paper combines an exogenous increase in oil prices and tax policies on fossil fuels the objective is to determine the efficiency of an alternative incentive scheme for biodiesel consumption based on a higher price of the fossil fuel substitute policy simulations are implemented through a dynamic computable general equilibrium cge model calibrated on 2009 french data the results show that the 10 biodiesel mandate set by the red would not be achieved even if the fixed taxes on diesel reach the same level as those on gasoline although integrating the rise in oil prices into the fiscal framework improves the biodiesel penetration rate it remains below the target moreover we find that the effects of biofuel consumption are limited to the biofuel chain sectors in other agricultural sectors the substitution effect of biodiesel with diesel is partially offset by the pricing effect induced by higher energy production costs

oil prices and the global economy a general equilibrium analysis a global computable general equilibrium model is used to analyze the economic impacts of rising oil prices with endogenously determined availability of biofuels to mitigate those impacts the negative effects on the global economy are comparable to those found in other studies but the impacts are unevenly distributed across countries regions or sectors the agricultural sectors of high income countries which are relatively energy intensive will suffer more from a rising oil prices than that in lower income countries whereas the reverse is true for the impacts across manufacturing sectors the impacts are especially strong for oil importers with relatively energy intensive manufacturing and trade such as india and china while the availability of biofuels does mitigate some of the negative impacts of rising oil prices the benefit is small because capacity of biofuels to economically substitute for fossil fuels on a large scale remains limited

when does a central bank s balance sheet require fiscal support abstract using a simple general equilibrium model we argue that it would be appropriate for a central bank with a large balance sheet composed of long duration nominal assets to have access to and be willing to ask for support for its balance sheet by the fiscal authority otherwise its ability to control inflation may be at risk this need for balance sheet support a within government transaction is distinct from the need for fiscal backing of inflation policy that arises even in models where the central bank s balance sheet is merged with that of the rest of the government

food energy nexus in europe price volatility approach abstract the literature on food biofuel price volatility spillovers is growing published articles so far have widely ignored nonlinearities and the influence of exogenous variables on volatility patterns this article allows for these issues when characterizing eu biodiesel industry price dynamics while brazilian and us ethanol markets have been thoroughly investigated less attention has been paid to eu biodiesel markets pure eu biodiesel and rapeseed oil prices are the object of our research two different methods are applied to model these data a parametric approach and long et al s 2011 semiparametric approach empirical results suggest significant asymmetries in volatility spillovers between pure biodiesel and rapeseed oil prices rapeseed stock levels and euro dollar exchange rates are found to play a significant role in reducing food and biofuel price volatilities

the economic effects of the eu biofuel target in this paper we use the cge model dart to assess the economic impacts and optimality of different aspects of the eu climate package a special focus is placed on the 10 biofuel target in the eu in particular we analyze the development in the biofuel sectors the effects on agricultural production and prices and finally overall welfare implications one of the main findings is that the eu emission targets alone lead to only minor increases in biofuel production additional subsidies are necessary to reach the 10 biofuel target this in turn increases european agricultural prices by up to 7 compared to a cost effective scenario in which the eu 20 emission reduction target is reached additional welfare losses occur due to separated carbon markets and the renewable quotas the biofuel target has relatively small negative or even positive welfare effects in some scenarios

production functions for climate policy modeling an empirical analysis abstract quantitative models for climate policy modeling differ in the production structure used and in the sizes of the elasticities of substitution the empirical foundation for both is generally lacking this paper estimates the parameters of 2 level ces production functions with capital labour and energy as inputs and is the first to systematically compare all nesting structures using industry level data from 12 oecd countries we find that the nesting structure where capital and labour are combined first fits the data best but for most countries and industries we cannot reject that all three inputs can be put into one single nest these two nesting structures are used by most climate models however while several climate policy models use a cobb douglas function for part of the production function we reject elasticities equal to one in favour of considerably smaller values finally we find evidence for factor specific technological change with lower elasticities and with factor specific technological change some climate policy models may find a bigger effect of endogenous technological change on mitigating the costs of climate policy

comment on when does a central bank s balance sheet require fiscal support by marco del negro and christopher a sims abstract a central bank is insolvent if its plans imply a ponzi scheme on reserves so the price level becomes infinity if the central bank enjoys fiscal support in the form of a dividend rule that pays out net income every period including when it is negative it can never become insolvent independently of the fiscal authority otherwise this note distinguishes between intertemporal insolvency rule insolvency and period insolvency while period and rule solvency depend on analyzing dividend rules and sources of risk to net income evaluating intertemporal solvency requires overcoming the difficult challenge of measuring the present value of seignorage

another look at long run money demand abstract this paper investigates the long run demand for m1 in the postwar united states previous studies based on data ending in the late 1980s are inconclusive about the parameters of postwar money demand this paper obtains precise estimates of these parameters by extending the data through 1996 the income elasticity of money demand is approximately 0 5 and the interest semi elasticity is approximately 0 05 these parameters are significantly smaller in absolute value than the corresponding parameters for the prewar period a caveat is that the analysis assumes there is no trend in money demand resulting from technological change

china s food economy to the twenty first century supply demand and trade this paper accounts for the structural changes now taking place in china and suggests that china is not likely to become either an enormous importer or exporter of grain ultimately though china s grain balances will depend on decisions made by chinese policymakers rather than natural resource constraints p v this abstract was borrowed from another version of this item

removing distortions in the u s ethanol market what does it imply for the united states and brazil we analyze the impact of trade liberalization and removal of the federal tax credit in the united states on ethanol markets using a multimarket international ethanol model we find that u s trade barriers have been effective in protecting the ethanol industry under current policy there is separability of the u s ethanol market from world markets with trade liberalization the ethanol market deepens making it less susceptible to price volatility the effect of trade liberalization extends beyond ethanol markets affecting agricultural markets the results show that the impact of removal of the tax credit overrides the impact of the tariff removal copyright 2008 oxford university press

prohibition of factor market exchanges and technological choice in chinese agriculture this article constructs a model of technological choice in an economy where market exchanges in land and labour are prohibited empirical data on demand for tractors tractor usage and chemical fertilisers in china are employed to test several hypotheses derived from the theoretical model the theory implies that the impact of relative factor scarcity on the pattern of technological choice in such an economy is similar to that in a market economy as postulated by the hicks ruttan hayami binswanger hypothesis of induced technological change the empirical evidence is found to be consistent with the implications of the model

the impact of china s economic reforms on agricultural productivity growth this paper presents a method for assessing the relative importance of price increases and strengthened individual incentives due to the introduction of the responsibility system for the post 1978 increase in china s agricultural productivity data on post 1978 chinese agricultural performance suggest that a little over three quarters of the measured productivity increase is due to payment system changes and the remainder to price increases we also use our method to calculate incentive indices giving an estimate of the fraction of their marginal product that peasants received under the pre 1978 regime

the household responsibility system reform and the adoption of hybrid rice in china abstract this paper studies the diffusion of hybrid rice before and after the recent institutional change from the collective team system to the household based farming system in rural china a simple model which treats the adoption of hybrid rice as a portfolio selection problem is presented the model is tested against time series cross county data collected from hunan province in south china the empirical evidence suggests that 1 adoption behavior in the collective system was not consistent with the predictions of the theoretical model this evidence indicates the existence of administrative intervention in influencing production decisions in the collective system 2 there was a significant change in the structure of the adoption function following the transition from the collective system to the household based system and 3 adoption behavior in the household system is consistent with the predictions of the theoretical model

irrigation agricultural performance and poverty reduction in china the overall goal of our paper is to understand the impact that irrigation in china has had on grain production and incomes in general and income and poverty alleviation in poor areas in particular the paper seeks to meet three objectives first we describe the relationship among irrigation status yields and household crop revenue second we seek to understand the magnitude and nature of the effect that irrigation has on yields and crop revenue finally we seek to understand the impact that irrigation has on incomes in poor areas our analysis shows that irrigation contributes to increases in yields for almost all crops and in income for farmers in all areas the importance of crop income in poor areas and the strong relationship between crop revenue and irrigation provides evidence of the importance of irrigation in past and future poverty alleviation in china we also show that in the majority of the villages that invested in new irrigation returns are positive even after accounting for increases in capital and production costs 2005 elsevier ltd all rights reserved

what drives china s new agricultural subsidies summary china s agricultural policy has undergone a fundamental transformation in the four decades since the introduction of market reforms in 1978 and now involves a wide array of policy instruments that range from output and input subsidies to public infrastructure expenditures this article analyzes the political economic determinants of china s agricultural subsidy changes using producer subsidy equivalents pses drawn from annual data from 1984 to 2015 on 16 agricultural commodity sectors that include multiple policy instruments empirical results indicate that national factors such as high rates of economic growth and a lower share of agriculture in the economy have been the primary drivers of increases in pses and that larger more geographically concentrated agricultural sectors are more likely to be subsidized at a higher pse rate finally china s joining the world trade organization in december 2001 led to significant increases in pses that were not already explained by internal national or commodity specific factors in essence china s agricultural subsidy programs and levels increasingly resemble those of developed countries primarily as a result of economic transformation and the ability to structure agricultural policies within the wto rules moreover this article predicts that agricultural subsidies will trend slightly upward in the next decade and that the strongest opportunities to export to china will be in animal products or grains that are utilized for feed or processed foods where the levels of subsidies are predicted to increase but remain lower than for traditional food crops

research productivity and output growth in chinese agriculture recent attempts to quantify the sources of growth in chinese agriculture have attributed an exceptionally large share of this growth to the contemporary institutional and market reforms within china to analyze this important issue we use a newly constructed panel data set that includes an agricultural research or stock of knowledge variable our results suggest that while still a significant source of growth the direct growth promoting consequence of institutional change and market reforms have been overstated by these earlier studies research induced technical change accounts for a significant share 20 of the growth in agricultural output since 1965

the economic costs of food self sufficiency in china abstract despite the surge in agricultural output since the late 1970s a comparison of china s resource endowments with those of its trading partners suggests that with continued rapid income growth food imports will again expand unless relative domestic prices are raised quantitative analysis of price policies which would achieve self sufficiency in the 1990s indicates net economic costs ranging between 2 3 of gnp annually these results are however particularly sensitive to the relatively undocumented changes taking place in the dependence of china s rapidly growing livestock sector on feed grains

demand for cereal grains in asia the effect of urbanization abstract this paper analyzes the effects of urbanization on demand for cereal grains rice wheat and coarse grains in nine asian countries a complete demand system almost ideal demand system in linear form is estimated in two stages based on aggregate time series data from 1960 to 1988 in the high income countries i e japan and south korea urbanization was observed to significantly reduce demand for cereal grains in the lower income countries demand for cereal grains either increased or remained the same with urbanization among cereal grains urbanization has had negative effects on demand for rice and coarse grains but consistently positive effects on demand for wheat only japan and thailand among the countries studied have negative income elasticities of demand for total cereal grains and for rice in particular hence rice remains a necessity and a normal good in most asian countries previous estimates of income elasticities of rice based on time series aggregate data tend to be lower than those based on cross section household level data when urbanization is explicitly specified in the demand model the estimates of income elasticities from time series data turn out to be consistent with those from cross section data

separability in farm household economics an experiment with linear programming abstract the assumption of separability between farm household production and consumption facilitates analysis but entails several important restrictions the implications of assuming separability are discussed here in relation to the modelling of a representative tongan farm household econometric estimation of household demand is coupled with a linear programming lp model of farm household production when analysing consumer demand separable farm household economics is undoubtedly preferable to ignoring the production consumption linkages entirely however the restrictions which must be imposed on the production side of the separable model are such that a realistic lp solution is unlikely to be obtained this is likely to be a major deterrent to adopting the separable approach for studies in which the main focus is on production rather than consumption

the indirect land use impacts of united states biofuel policies the importance of acreage yield and bilateral trade responses recent work has highlighted agricultural land conversion as a significant debit in the greenhouse gas accounting of ethanol as an alternative fuel this work has at the same time sparked considerable debate on the role of crop yield growth as a means of avoiding rapid land conversion we examine the agricultural land use impacts of mandate driven ethanol demand increases in the united states in a formal economic equilibrium framework which allows us to examine the importance of yield price relationships we find that the standard assumption of trend yield growth is likely restrictive for analysis of equilibrium response to significant demand increases for fuel feedstocks furthermore we identify both the acreage response and bilateral trade specification of a multi country model as important sources of variability in terms of parametric uncertainty in predicting global land use change from the biofuels boom

the mystique surrounding the central bank s balance sheet applied to the european crisis abstract a central bank s resource constraint bounds the dividends it can distribute by the present value of seignorage which is a modest share of gdp this is in spite of the mystique behind a central bank s balance sheet moreover the statutes of the federal reserve or the ecb make it difficult for it to redistribute resources across regions in a simple model of sovereign default where multiple equilibria arise if debt repudiation lowers fiscal surpluses the central bank may help to select one equilibrium the central bank s main lever over fundamentals is to raise inflation but otherwise the balance sheet gives it little leeway

input substitution and the distribution of surplus gains from lower u s beef processing costs the impact on consumers and input suppliers of allowing substitution between farm and nonfarm inputs in food processing is a controversial issue freebairn davis and edwards 1982 assumed that no substitution between these inputs was possible and concluded that the distribution of surplus gains between producers and consumers is independent of the source of supply shift alston and scobie pointed out that this conclusion depends on the assumption of no input substitution once input substitution is possible farmers can no longer be indifferent about the supply shift since their share of total surplus gains is greater for shifts in farm supply than for marketing input supply furthermore as the degree of input substitution increases the farmers share of surplus gains from a downward shift in the supply of marketing inputs decreases freebairn davis and edwards 1983 replied that while we tend to agree with alston and scobie that the elasticity of substitution in the case of pork is likely to be nonzero we doubt that it is very large and at this stage no satisfactory estimate is available p 357 in this study we obtain a lower bound estimate of the elasticity of substitution and show

the impact of rising ethanol production on the brazilian market for basic food commodities an econometric assessment the controversial debate on the impacts of rising biofuel production on food commodity markets is of great policy relevance in brazil this paper contributes to the discussion by applying panel data regression models with fixed effects using ols our dataset comprises annual production harvested area data for sugar ethanol and five other staple commodities ranging from 1981 to 2009 for 24 brazilian states our results indicate that rising ethanol production exerts statistically significant positive impacts on sugarcane negative impacts on rice beans and soybeans acreage but no statistically significant effect on the areas for corn and manioc the negative impacts on commodities acreage have implications for the associated prices ceteris paribus rising ethanol production puts some upward pressure on the prices for rice beans and soybeans however the economic implication of these direct land use effects is attenuated due to the moderate scale of any effect

rural reforms and agricultural growth in china this paper employs province level panel data to assess the contributions of decollectivization price adjustments and other reforms to china s agricultural growth in the reform period decollectivization is found to improve total factor productivity and to account for about half of the output growth during 1978 84 the adjustment in state procurement prices also contributed positively to output growth its impact came mainly from the responses in input use the effect of other market related reforms on productivity and output growth was very small reasons for slowdown in agricultural growth after 1984 are also analyzed copyright 1992 by american economic association

china s past and future role in the grain trade china s grain production consumption and trade are key factors in the world grain market in the 1960s china emerged as a major wheat importer and observers expect this situation to continue mainly because china has 20 of the world s population but only 7 of the earth s arable land in the early 1980s china was the second largest importer of wheat in the world ranking behind the ussr china s wheat imports then dropped off sharply in the mid 1980s but rose again in the late 1980s and this trade behavior created much uncertainty surrounding its future role in the grain trade the purpose of this article is to analyze china s historical role in the world grain markets to study the impact of the 1979 economic reforms on china s grain production consumption and trade 2 and to evaluate the probable participation of china in the grain trade in future years china is so large that regional differences in climate level of development and growth rates in grain production are substantial because of this regional heterogeneity this article attempts a disaggregated analysis of china s grain economy

trade policy biotechnology and grain self sufficiency in china abstract over the past 20 years the growth of china s agricultural economy has been extraordinary however it seems unlikely that china will maintain self sufficiency in grains by 2005 without substantial intervention we develop a cge model to assess the options available to chinese policy makers we compare the welfare effects of import tariffs and domestic support and explore the potential of biotechnology as a means to achieve self sufficiency through improvements in agricultural productivity our results indicate that the price interventions that would be required to maintain china s desired self sufficiency ratios are considerable and are unlikely to be compatible with wto accession the productivity improvements required are also significant and likely beyond the current potential of biotechnology

producing biofuels in low income countries an integrated environmental and economic assessment for tanzania this paper jointly evaluates the greenhouse gas emissions and economic impacts from producing biofuels in tanzania sequentially linked models capture natural resource constraints emissions from land use change economywide growth linkages and household poverty results indicate that there are economic incentives to convert unused lands to sugarcane ethanol production but only grasslands not forests have a reasonable carbon payback period there are also strong socioeconomic reasons to involve smallholders in feedstock production in order to reduce rural poverty especially since our results indicate that biofuels have little effect on food production yet smallholders require more land than large scale plantations and so face more binding natural resource and emissions constraints overall environmental constraints alter the socioeconomically optimal biofuel strategy for tanzania by limiting potential poverty reduction unlike previous studies our integrated assessment suggests that a mixed farming system with greater emphasis on large scale plantations is more appropriate for producing sugarcane ethanol in tanzania

impact of eliminating government interventions on china s rice sector abstract china s economy has undergone fundamental changes since 1978 agriculture industry and services are being transformed into market economies marketing and domestic trade have also been reformed to take into account regional comparative advantages the government however still controls input supply and output procurement to some extent china is currently negotiating with the gatt in regard to gaining membership conditions for china s reentering the gatt are to eliminate the government interventions on domestic production and consumption and international trade this may affect china s comparative advantages in international markets and therefore may result in changes in the structure of imports and exports will china continue to export rice or will it start to import rice under free trade and if china continues to export how much will china export this paper attempts to model the potential effects of eliminating all government interventions on china s rice sector we construct a rice industry model to facilitate our analysis the model has three components i e supply demand and price linkages the estimated results are consistent with theory and are evaluated using several techniques results from model validation indicate that both static and dynamic models are reasonable and can be used to simulate effects of various government policies simulations are conducted to project china s rice economy to the year 2000 two scenarios are compared 1 continued current policy and 2 elimination of all government interventions eliminating all government interventions would increase production stocks and exports domestic consumption would decline due to the higher domestic prices from eliminating government subsidies on rice consumption china would export more than 1 6 million metric tonnes of milled rice if there were no government interventions in the year 2000

food self sufficiency comparative advantage and agricultural trade a policy analysis matrix for chinese agriculture revised china s rapid economic growth and gradual transition toward a market economy have brought about significant changes in production and consumption patterns and trade behavior in agriculture in this study the authors assess the comparative advantage and protection of china s major agricultural crops using a modified policy analysis matrix ipami and data from 1996 to 1998 results strongly suggest that china has a comparative advantage in labor intensive crops and a disadvantage in land intensive crops

the time series properties of aggregate consumption implications for the costs of fluctuations the properties of the stochastic process followed by aggregate consumption affect the estimates of the costs of fluctuations this paper pursues two approaches to modeling consumption dynamics and measuring how much society dislikes fluctuations one statistical and one economic the statistical approach estimates the properties of consumption and calculates the costs of having consumption fluctuating around its mean growth the paper finds that persistence is a crucial determinant of the costs and that the high persistence in the data severely distorts conventional measures it shows how to compute valid estimates and confidence intervals the economic approach uses a calibrated model of optimal consumption and measures the costs of eliminating income shocks this uncovers a further cost of uncertainty through its impact on precautionary savings and investment the two approaches lead to costs of fluctuations that are higher than the common wisdom between 0 5 and 5 of per capita consumption jel e32 e21 e60

agricultural research and urban poverty the case of china abstract this paper develops a framework to measure the impact of agricultural research on urban poverty increased investments in agricultural r d can lower food prices by increasing food production and lower food prices benefit the urban poor because they often spend more than 60 of their income on food application of the framework to china shows that these food price effects are large and that the benefits for the urban poor have been about as large as the benefits for the rural poor

inter and intra seasonal crop acreage response to international food prices and implications of volatility understanding how producers make decisions to allot acreage among crops and how decisions about land use are affected by changes in prices and their volatility is fundamental for predicting the supply of staple crops and hence assessing the global food supply situation this study makes estimations of monthly i e seasonal versus annual global acreage response models for the world s principal staple food crops wheat corn soybeans and rice primary emphasis is given to the magnitude and speed of the allocation process estimation of intra annual acreage elasticity is crucial for expected food supply and for input demand especially in the light of the recent short term volatility in food prices the econometric results indicate that global crop acreage responds to crop prices and price risks input costs as well as a time trend depending on respective crop short run elasticities are about 0 05 to 0 40 price volatility tends to reduce acreage for some of the crops comparison of the annual and the monthly acreage response elasticities suggests that acreage adjusts seasonally around the globe to new information and expectations given the seasonality of agriculture time is of an essence for acreage response the analysis indicates that acreage allocation is more sensitive to prices in the northern hemisphere spring than in winter and the response varies across months

disentangling the effects of fair trade on the quality of malian cotton the increasing importance of premium segments and private labels raise skepticism about the ability of fair trade to help smallholders compete in high value added markets using panel data collected in mali this paper contributes to the debate by estimating the impact of fairtrade certification on the quality of malian cotton controlling for the nonrandom certification of producers results show a significant impact on the quality of cotton produced by both certified and geographically close noncertified growers via spillover effects the analysis suggests that contract farming enforced by third parties and demonstration effects foster the adoption of innovative agricultural practices

oil price biofuels and food supply abstract the price of oil could play a significant role in influencing the expansion of biofuels but this issue has yet to be fully investigated in the literature using a global computable general equilibrium cge model this study analyzes the impact of oil price on biofuel expansion and subsequently on food supply the study shows that a 65 increase in oil price in 2020 from the 2009 level would increase the global biofuel penetration to 5 4 in 2020 from 2 4 in 2009 if oil prices rise 150 from their 2009 levels by 2020 the resulting penetration of biofuels would be 9 which is higher than that would be caused by current mandates and targets introduced in more than forty countries around the world the study also shows that aggregate agricultural output drops due to an oil price increase but the drop is small in major biofuel producing countries as the expansion of biofuels would partially offset the negative impacts of the oil price increase on agricultural outputs an increase in oil price would reduce global food supply through direct impacts as well as through the diversion of food commodities and cropland towards the production of biofuels

land allocation effects of the global ethanol surge predictions from the international fapri model we quantify the emergence of biofuel markets and its impact on world agriculture using the multimarket multicommodity international fapri model the model incorporates trade offs between biofuel feed and food production and consumption and international feedback effects of the emergence through world prices and trade we shock the model with exogenous changes in ethanol demand first in the united states then in brazil and other countries and compute shock multipliers for land allocation decisions for important crops and countries the brazilian ethanol expansion using sugarcane has fewer consequences on existing arable land allocation than the u s ethanol expansion does using corn feedstock

public investment and china s long term food security under wto abstract as the world s most populous nation china has taken various measures to increase grain production output in the past several decades however many of the policy interventions to promote grain production are not in conformity with wto rules and also lead to misallocation of resources and loss of production efficiency while adequately steady growth of grain output may still be a policy goal for the world s most populous nation with continuous population growth and economic development it is crucial that the country moves away from many of its past measures and explores alternative policy tools to strengthen domestic grain production by using agricultural research and irrigation as a proxy this paper examines the effects of public investment in irrigation and agricultural research on the output increase of grain production in china in a crop specific manner the research finds that increasing public investment in agricultural research will bring about higher output in a cost effective manner increasing public investment in agricultural r d etc should be considered with high priority in the future to be utilized as a policy tool to enhance long term food security

rural chinese food consumption the case of guangdong chinese consumer behavior is analyzed based on rural guangdong household survey data for most food items own price elasticities estimated with an aids model are inelastic commodity substitution due to relative price changes is small except in the case of grain commodities most responsive to expenditure changes are meats poultry fruits sweets and durable goods

impacts of ethanol policy on corn prices a review and meta analysis of recent evidence abstract the literature on the impacts of biofuels on agricultural commodity prices is characterized by contradictory findings we review studies published between 2007 and 2014 that estimate the effects of u s corn ethanol policy on corn prices and find estimates ranging from nil to over 80 such divergent results make it difficult to assess the merits of alternative biofuel policies to bring more clarity to the issue and facilitate comparisons across studies we assemble a database of over 150 medium to long run estimates of the effect of corn ethanol production on corn prices from 29 published studies we first normalize corn price impacts by the change in corn ethanol volume to control for the large differences in ethanol quantities across scenarios we then conduct a meta analysis to identify the factors that drive the remaining variation in corn price impacts across studies in addition to ethanol volumes we find that modeling framework projection year inclusion of ethanol co products and biofuel production from other feedstocks explain much of the differences in price effects the results indicate that a one billion gallon expansion of the us corn ethanol mandate in the year 2015 would lead to a three to four percent increase in corn prices with smaller price changes projected in future years

biofuel production and its impact on food security in low and middle income countries implications for the post 2015 sustainable development goals abstract the post 2015 sustainable development goals sdgs aim to strengthen the achievements of the millennium development goals mdgs there are 17 sdgs the first two tackle ending poverty and hunger as well as food insecurity under nutrition and sustainable agriculture to address these goals requires eradicating chronic hunger this paper examines challenges associated with biofuel production and how they relate to sdgs and their targets we mainly focus on challenges associated with biofuel production not adequately addressed in the sdgs it draws from a range of peer reviewed and grey literature to advance the understanding of how biofuel production will impact the post 2015 development agenda the findings suggest that increasing use of food crops to produce biofuels in the united states european union japan and brazil has been one important element in explaining the steady rise in staple food prices since 2000 while this is a potential threat to food and nutrition security in low and middle income countries biofuel production also offers significant opportunities in low income countries there are several challenges to the development and harnessing of biofuels these include 1 the interaction between biofuel production and climate change 2 biofuel production and foreignisation of land 3 food wastage 4 poor governance and limited production capacity 5 biofuel production within a weak and fragmented policy framework 6 biofuel production land tenure and socio economic impacts 7 biofuel production and conflicts and 8 biofuel production and deforestation for the post 2015 sustainable development agenda to have an impact strong actions are required to protect rural communities as well as nurture the biofuels industry this should be matched by commensurate investments in food and nutrition security and transparent public private partnerships this calls for strong and pro poor policies on feedstock farming processing and trading such policies must address the rhetoric of stakeholder participation in land use management

the impacts of biofuel targets on land use change and food supply a global cge assessment this study analyzes the long term impacts of large scale expansion of biofuels on land use change food supply and prices and the overall economy in various countries or regions using a global computable general equilibrium model augmented by a land use module and detailed representation of biofuel sectors the study finds that an expansion of global biofuel production to meet currently articulated or even higher national targets in various countries for biofuel use would reduce gross domestic product at the global level however the gross domestic product impacts are mixed across countries or regions the expansion of biofuels would cause significant land re allocation with notable decreases in forest and pasture lands in a few countries the results also suggest that the expansion of biofuels would cause a reduction in food supply although the magnitude of the impact on food supply at the global level is not as large as perceived earlier it would be significant in developing countries like india and those in sub saharan africa agricultural commodities such as sugar corn and oil seeds which serve as the main biofuel feedstocks would experience significant increases in their prices in 2020 compared with the prices at baseline due to the expansion of biofuels to meet the existing targets

reconciling chinese meat production and consumption data with more than one fifth of the world s population and only 7 of the world s arable land china has the potential to become a major importer of land intensive products such as feed grains this development would be of particular interest to the united states and canada which together have more than 17 of the world s arable land but only 5 of the world s population 1 per capita private consumption in china has been increasing at an average annual rate of 6 8 over the past decade given the low average income level in china consumption of feedgrain intensive products such as meat dairy products and alcohol can be expected to increase with continued income growth these factors take on greater significance given the fact that china has applied to join the world trade organization and trade liberalization may soon occur use of grain intensive products should increase if china liberalizes its agricultural markets and china should eventually reverse the current trade situation and begin to import large quantities of feed grains and meats the combination of these observations has stimulated interest in china s agricultural data and the research and policy prescriptions based on these data are greatly affected by the data s quality to understand why this is important consider the following examples official chinese and u s data show that per capita pork consumption in china is about 5 kilograms per person greater than it is in the united states 2 if this is true then it might be argued that chinese pork consumption is reaching a saturation level alternatively one might argue that the enormous increase in per capita pork consumption in the past several years implies a large expenditure elasticity any attempt to use this expenditure elasticity for projection of future meat demand in conjunction with strong growth in projected per capita income would imply a large percentage increase in consumption from a base that is already very high because feed grain consumption is directly dependent on livestock

rising wages mechanization and the substitution between capital and labor evidence from small scale farm system in china this article aims to investigate major factors that led to the observed pace of mechanization and the substitution between labor and machines in rural china we used commodity wise province level panel data for more than a quarter of a century from 1984 to 2012 the analysis demonstrated a dramatic increase in real agricultural wages in recent years especially after 2003 in contrast to a relatively stable real machine price the relative price of machines against agricultural labor has declined in an accelerating way which contributed to the observed rapid introduction of machines the elasticity of substitution between labor and machines was large in some commodities which contributed to a fast substitution of labor by machines

investment in u s agriculture resource adjustment problems in u s agriculture are motivated against the background of the farm problem the adjustment cost hypothesis is invoked to specify and estimate consistently a system of dynamic investment demand and output supply equations by utilizing recent advances in dynamic duality theory the investment demand equations assume the form of a multivariate flexible accelerator results indicate that labor capital services and land exhibited quasi fixity while intermediate materials were a variable factor this can be construed as a form of asset fixity within aggregate u s agriculture the univariate flexible accelerator hypothesis is rejected

compounding food and income insecurity in yemen challenges from climate change this paper provides a model based assessment of local and global climate change impacts for the case of yemen focusing on agricultural production household incomes and food security global climate change is mainly transmitted through rising world food prices our simulation results suggest that climate change induced price increases for food will raise agricultural gdp while decreasing real household incomes and food security rural non farm households are hit hardest as they tend to be net food consumers with high food budget shares but farm households also experience real income losses given that many of them are net buyers of food the impacts of local climate change are less clear given the ambiguous predictions of global climate models gcms with respect to future rainfall patterns in yemen local climate change impacts manifest itself in long term yield changes which differ between two alternative climate scenarios considered under the mir scenario agricultural gdp is somewhat higher than with perfect mitigation and rural incomes rise due to higher yields and lower prices for sorghum and millet under the csi scenario positive and negative yield changes cancel each other out as a result agricultural gdp and household incomes hardly change compared to perfect mitigation

hybrid rice innovation in china a study of market demand induced technological innovation in a centrally planned economy this paper uses the innovation of hybrid rice in china as a case study to test the validity of the griliches schmookler hypothesis of market demand induced technological innovation in a centrally planned economy the empirical evidence indicates that the size of rice acreage in a province is the major factor in determining the amount of resource allocation for rice research and the adoption intensity of hybrid rice in that province this evidence is consistent with the implication of the griliches schmookler hypothesis copyright 1992 by mit press

livestock in china commodity specific total factor productivity decomposition using new panel data studies of total factor productivity tfp in livestock production are rare but when available provide useful information especially in the context of developing countries such as china where livestock is becoming more important in the domestic agricultural economy we estimate tfp for four major livestock products in china employing the stochastic frontier approach and decompose productivity growth into its technical efficiency te and technical progress components efforts are made to adjust and augment the available livestock statistics the results show that growth in tfp and its components varied between the 1980s and the 1990s as well as over production structures while there is evidence of considerable technical innovation in china s livestock sector te improvement has been relatively slow

middle income classes and food crises the new food feed competition famine was averted the novelty was that a 3 shortfall in grain production led to a 250 price increase this specific manifestation of the food crisis was the result of the congruence of an old force population pressure with new ones the income explosion and income inequality in a world in which the economic distance between the rich and the poor grows ever greater even minor food shortages are likely to assume major proportions the agricultural price instability that will ensue represents a major threat to the food security of less developed countries examination of the ingredients of modern food crises can help explain some of the new ramifications of the age old problem of world hunger the three elements that are reflected in the food demand situation are population incomes and prices to avoid needless complexity i will reserve my examination of prices to the end population and incomes deserve more detailed analysis

the impact of biofuel growth on agriculture why is the range of estimates so wide the rapid expansion of biofuel production has generated considerable interest within the body of empirical economic literature that has sought to understand the impact of biofuel growth on the global food economy while the consensus within the literature is that biofuel emergence is likely to have some effect on future world agricultural market there is a considerable range in the estimated size of the impact despite the importance of this topic to policy makers there has been no study that has tried to reconcile the differences among various outlook studies this paper undertakes an in depth review of some key outlook studies which quantify the impacts of biofuels on agricultural commodities and which are based on either general equilibrium ge or partial equilibrium pe modeling approaches we attempt to reconcile the systematic differences in the estimated impacts of biofuel production growth on the prospective prices and production of three major feedstock commodities maize sugar cane and oilseeds across these studies despite the fact that all models predict positive impacts on prices and production there are large differences among the studies our findings point to a number of key assumptions and structural differences that seem to jointly drive the variations we observe across these studies the differences among the pe models are mainly due to differences in the design of scenarios the presence or absence of biofuel trade and the structural way in which agricultural and energy market linkages are modeled the differences among the ge models are likely to be driven by model assumptions on agricultural land supply the inclusion of the byproducts and assumptions on crude oil prices and the elasticity of substitution between petroleum and biofuels