Browsing by Subject "Agricultural policy"

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An economic analysis of the implementation options of soil conservation policies
(2008) Schuler, Johannes; Dabbert, Stephan
The objective of this study is to analyze the economic and agricultural aspects of the implementation of soil conservation programmes and to suggest appropriate measure-instrument combinations for efficient soil conservation as a decision support for the implementation of soil conservation policies. Emphasis is given to the resource and institutional economics of soil conservation. In the empirical part, the efficiency of policy options is analysed using the example of a region in north-eastern Germany based on model calculations. After an introduction to the topic of soil functions and soil degradation definitions, the implementation concepts for soil protection measures at the international and national level are described. Based on the theoretical economic analysis of soils as a natural resource, the existing property rights, the public good characteristics of soils and the resulting externalities lead to the conclusion that market failure does exist. Therefore, the non-market coordination of soil use is justified. A cost-effectiveness analysis was derived based on the theory of ?safe-minimum-standard? for the appropriate assessment of the implementation options of soil conservation policies. A fuzzy-logic-based method, which is based on an expanded Universal Soil Loss Equation approach (USLE), was applied for the assessment of soil erosion risk in the sample region. The approach considers both the natural conditions and the characteristics of the cropping practice. The very detailed description of the cropping practices allowed for the specific assessment of erosion relevant effects. This, in combination with the high detail site descriptions provided this study with a very precise regional approach. The regional decision-support system MODAM (multi-objective decision support tool for agro-ecosystem management) was applied for the assessment of the economic and environmental impacts of different policy options. The policy scenarios examined include a CAP reform scenario with decoupled payments in accordance with the proposed conditions of the year 2013. This scenario was used as the reference scenario for the other possible scenarios of soil conservation policies. The three main scenarios for the policy options are 1) a non-spatially oriented, 2) a spatially-oriented incentive programmes for reduced tillage practices and 3) a regulation scenario that prohibits the cultivation of highly erosive crops (row crops) on erodible soils. The prohibition of row crops on highly erodible soils led both to lower on-farm costs and lower budget costs in comparison to the incentive programmes for reduced tillage. All three scenarios had comparable reduction in soil erosion. Based on the modeling results the ban on row crops on highly erodible sites is therefore the preferable option in terms of the cost-effectiveness ratio. The inclusion of transaction costs in this study helps expand the scope of policy analysis, for the total costs of a policy would be underestimated if only the budget costs for the direct payments to farmers were considered. Transaction costs understood as a cost for the (re-) definition and implementation of property rights can reach substantial amounts and reduce the total efficiency of a policy. The results of the qualitative analysis of the transaction costs of the study policy options also supported the option of row crop regulation on highly erodible soils. A model that serves as decision support for both the economic and agricultural aspects of soil conservation had been successfully developed in this study. Different policy options were analysed for a cost-effective solution of soil conservation programmes. Based on the final discussion on the involved transaction costs, the regulatory approach (a spatially-focussed ban on row crops) was shown to be the most cost-effective option with potentially lower transaction costs. The main criteria for a cost-effective policy design are high efficiency in both the agricultural measures (practices) and the spatial correlation between the programme area and the high erosion risk areas. Incentive programmes in combination with less effective agricultural practices showed a worse cost-benefit ratio for the sample area than the regulation approach, which is based on more effective agricultural practices.
Domestic support payments and trade distortions : the neglected issue in global general equilibrium modeling
(2016) Urban, Kirsten Gunver; Brockmeier, Martina
The domestic support payments provided to agricultural producers are frequently the subject of heated debate because they distort industry and trade structures causing efficiency losses and welfare redistribution. In recent years, high-income countries have initiated several reforms of their agricultural policies to decrease such distortions. These reforms are partly enforced by the requirements to reduce distorting domestic support, as agreed upon by the World Trade Organ-ization (WTO). A prominent example of such a heavily criticized policy is the agricultural sup-port of the Common Agricultural Policy (CAP) of the European Union (EU). In 2005, the EU introduced the Single Farm Payment (SFP), which is supposedly decoupled from production, to decrease the production stimulating effects of its CAP, and thus to reduce the distortions caused by the domestic support payments. However, these policy instruments are also contro-versial because the extent to which decoupled payments, such as the SFP, distort trade is still unclear. Domestic support provided to agricultural producers comprises a multitude of different and country-specific agricultural policy instruments, which makes it difficult to analyze the corresponding effects on domestic and third countries’ industry structure, trade, and welfare. The most common approach for evaluating the impacts from alternative policy options is based on Computable General Equilibrium (CGE) models. Nevertheless, the attention to detail re-garding the complex structure and country specific properties of domestic support, and in par-ticular the SFP, in such models has been largely neglected. Objective of this cumulative thesis is to analyze the effects of domestic support payments on industry output, international trade and welfare, with a particular focus on the impact of vary-ing assumptions of the SFP’s degree of decoupling in CGE modeling. Furthermore, this thesis aims to evaluate the trade-distorting effect of domestic support over time and provide a cross-countries comparison. Therefore, the standard Global Trade Analysis Project (GTAP) modeling framework is ex-tended to enable a much more detailed representation of domestic support payments based on the OECD Producer Support Estimate (PSE) database and considering the requirements re-garding production that trigger the eligibility for specific subsidies. Applying a complex updat-ing procedure, using the EU CAP as an example, a set of 21 databases accounting for various assumptions about the SFP’s degree of coupling to output levels is created. These databases are then used to investigate the extent to which various assumptions of the SFP’s degree of decou-pling and the corresponding modeling cause differences in results when a 100% removal of the SFP is simulated. In addition, a theoretically sound index based on the Mercantilist Trade Re-strictiveness Index (MTRI) is developed that measures the overall trade effects of domestic support in a general equilibrium framework. The new index named “MTRI of domestic support payments” (MTRI-DS) enables the measurement of the trade restrictiveness of domestic sup-port payments over time and across countries. Analyses’ results show: • Strong impacts of the SFP on factor allocation and thus industry output, market prices, trade structure and welfare in EU member states. • Significant variations due to alterations in the assumptions underlying the SFP’s de-gree of decoupling. • A decrease in trade distortion caused by the implementation of decoupled support in the EU. Thus, the MTRI-DS provides an appealing measure for evaluating the effects of agricultural policy reforms by summarizing the changes in the composition of domestic support payments, and thus, it might be of particular use in the support of trade negotiations.
Ex-ante measurement of redistributive effects of agricultural policy in western Germany
(2014) Deppermann, Jens Andre; Grethe, Harald
In recent decades, agricultural support of the European Common Agricultural Policy (CAP) has increasingly shifted from market price support measures to budgetary payments. This development has made support more visible and has raised public attention to the distribution of support, which in turn increased political awareness of the topic. Simulation models are tools frequently used for the ex-ante analysis of policy reforms. In other scientific areas, e.g. poverty analysis or tax reform analysis, it is quite common to assess impacts of macroeconomic shocks on income distribution on a national scale by the application of behavioural ex-ante models and referring to the level of individual incomes. Similar tools for the measurement of impacts of sectoral or macroeconomic policies on the individual farm income level are less frequent for the agricultural sector and, apart from few exceptions, ex-ante studies of redistributive effects of agricultural policy are rare. Yet, in general, ex-ante policy impact analysis in the agricultural sector has a long tradition. The combination of models to jointly assess effects at different levels of aggregation and taking behavioural effects into account is very common. Most of the model chains, however, take farm groups or average farms into account rather than accounting for effects at the individual farm level. Some attempts have been made to combine macro or sectoral models with micro models, which incorporate the behaviour of individual farms. Such research, however, is often restricted to the analysis of certain types of farms. In general, ex-ante analyses of redistributive effects among individual farms on a supra-regional level in the sense of evaluating a counterfactual distribution of income with regard to a reference distribution of income including an assessment of progressivity or related concepts can hardly be found for the agricultural sector. Against this background, the main objective of this work is to develop a tool that is able to consistently assess impacts of agricultural policy on individual farm incomes, thereby building on existing modelling approaches and thus, taking behavioural effects into account for the ex-ante analysis of redistributive effects of agricultural policy. Subsequently, different liberalization scenarios are defined and a detailed analysis of redistributive effects is carried out for the western German agricultural sector by the application of methodologies borrowed from the field of tax progressivity analysis. Thereby, several contributions to the understanding of modelling inequality effects are made, methodologically as well as empirically. The modelling system consists of three layers. At the sectoral and the meso-level two previously developed large scale models are applied. The European Simulation Model (ESIM) is an agricultural sector model with a strong focus on the CAP. It depicts the world agricultural sector – though in different degrees of regional disaggregation – and quantifies effects of agricultural policy at the European and member state level. It is, however, unable to estimate intra-sectoral income changes at the farm level. The Farm Modelling Information System (FARMIS) is a more disaggregate model that depicts the German agricultural sector in great detail. It applies 628 homogenous farm groups and is used in the modelling chain to estimate impacts on the intra-sectoral distribution of income at the meso-level. The two models at the sectoral and meso-level are consistently linked via an iterative solution process. After convergence is achieved between ESIM and FARMIS, the integrated results are further processed in a micro model, estimating impacts at the individual farm level. The micro model has been developed for this study, is static in nature, and relies on the results of the meso-model. After changes in individual incomes are calculated as a first step by the modelling system for different scenarios, model results are analysed in a second step by the application of a methodology for the measurement of redistributive effects that was originally developed for the analysis of tax reforms. Based on the comparison and decomposition of relative and absolute Gini coefficients, detailed redistributive impacts of changes in agricultural policy are presented. For the analysis, scenario results for the year 2020 are evaluated relative to the income distribution of a reference scenario where the CAP is still in place in 2020. To account for different conceptual impacts of inequality analysis on results, the analysis is carried out at different aggregation levels, for different income classifications, and for income data generated in a static way in comparison to data generated by the modelling system. It can be stated that inequality effects are robust with regard to the conceptual differences tested for, at least in terms of the direction of inequality changes. All calculated liberalization scenarios lead to decreasing absolute income differences among western German farms in 2020 because high-income farms lose higher absolute amounts of money than small-income farms. Relative to their Baseline incomes, however, low-income farms tend to lose a higher share compared to high-income farms which leads to increasing relative inequality due to liberalization. Only one exemption from this pattern of results exists: if grouped results are disaggregated and total household income is considered instead of family farm income. In summary, this work provides an innovative combination and extension of different simulation models, which enables the ex-ante measurement of income changes for individual farms. This information in turn facilitates the measurement of redistributive effects in the agricultural sector taking behavioural effects into account.
Nachhaltiger Anbau von Bioenergie : eine ökonomisch-ökologische Analyse für die Landwirtschaft in Baden-Württemberg
(2012) Konold, Angelika; Zeddies, Jürgen
The aim of this thesis is on the one hand to estimate the potential of energy crop production for CO2-sequestration in Baden-Württemberg. On the other hand the focus lies on the interactions that arise from the implementation of optimized na-ture conservation measures with the land management on regional level. For this the existing economic-ecological regional model EFEM (Economic Farm Emission Model), based on linear programming, is further developed. The calculations are made on farm level and are extrapolated on regional level. The model is calibrated on the database for the years 2001-2005 and the so modeled Reference_2003 than is projected to the year 2015 (BAU_2015), this to evaluate the model results without the influence of the great changes in agricultural policy in the last years. Based on the modeled situation for the year 2015 further scenarios are defined that differ in the expansion of energy cropping and nature conservation measures. In the ?biomass scenarios? only the legal nature requirements have to be met while in the corresponding ?conservation scenarios? restrictions that are optimal from a nature conservation point of view, must be considered. The sensitivity analyses for selected parameters proved that the model results have sufficient stability to make reliable statements about synergy effects and conflicts between the expansion of energy crop cultivation and requirements for natural conservation. Altogether it could be shown that with the used model approach interactions be-tween the cultivation of energy crops and nature conservation are represented sufficiently and the objectives of energy and climate policy are compatible.
Prozess der Transformation der Landwirtschaft Usbekistans und Probleme bei der Umstrukturierung der landwirtschaftlichen Betriebe
(2002) Nazarkulov, Umidjan Rakhimjanovich; Zeddies, Jürgen
Privatization of agricultural enterprises in former soviet countries has led to changes in production structure, methods of production and management of enterprises. Hence, the main objective of this dissertation is, at first, analysis of development of the agrarian sector and agricultural enterprises on the example of the Republic of Uzbekistan, and the identification of their weaknesses and problems. Furthermore aspects of management and marketing are considered and recommendations on improving the strategy of optimization the production process, which will serve as a basis for decision-making in the appropriate organizations. The structural changes in typical farms of 3 regions of the Republic of Uzbekistan under different frame conditions are analyzed using a linear programming model. The results of these optimization calculations are leading to the following requirements: - Change of the production structure and reduction of the state influence and governmental control; - Cancellation of fixed state prices of cotton and wheat with a simultaneous increase of water taxes; - Reduction of labour input and increase of wages with the purpose of improving the motivation and efficiency of labour; - Extension of the area of family farms. According to the model calculations a liberalisation of agricultural markets would lead to the following consequences for farm enterprises and agricultural production: - A substantial reduction of cotton production will lead to a wider crop rotation and better soil fertility; - The total gross margins of the farm enterprises will increase due to an optimization of production and marketing structure; - If the fixed producer prices for wheat and cotton will be eliminated, wheat production would increase significantly; - Depending on the region animal stocks will show a different development pattern. While in one region the big farms will reduce their livestock production, in two other regions they will be increased. Family farms tend to reduce the livestock number due to scarcity of land resources; - Farm incomes can be increased by reducing the number of workers; simultaneously increasing wages and introducing better labour management practices thus contributing to higher motivation and business success; - Profits should be invested in new machinery and equipment in order to maintain adequate levels of production; - Private family farms show a relatively high labour capacity and would be able to increase their farm land. Therefore liberalization of land market is necessary; - For family farms a liberalization of producer prices will lead to similar changes in production and marketing structures as for big farm enterprises. In conclusion it can be recommended to state institutions to reduce their influence on the operational decisions of farmers. The main objective of agricultural policy in future should be improvement of frame conditions for trade, liberalization of markets, effective support to structural changes and creation of a system of social support to farmers.
Two worlds in agricultural policy making in Africa? Case studies from Ghana, Kenya, Senegal and Uganda
(2016) Mockshell, Jonathan; Birner, Regina
There has been a renewed interest among donors and domestic policy makers in promoting agricultural development in Africa. Such renewed interest is evident in initiatives, such as the Comprehensive Africa Agricultural Development Program (CAADP), the Alliance for a Green Revolution in Africa (AGRA), the New Alliance for Food Security and Nutrition, and TerrAfrica. Yet, the choice of policy instruments that are most suitable to promote agricultural development in Africa remains subject to a contested debate. The main objective of this cumulative thesis is to analyze the role that the policy beliefs of different actors play in determining policy choices and policy implementation, a topic that has been largely neglected in the agricultural economics and political science literature on the political economy of agricultural policies in Africa. While some policy actors argue that agricultural development requires strong state support, others criticize state-focused instruments and favor market-oriented strategies. Examples of such unresolved debates regarding the role of the state versus the private sector include controversies about input subsidies, import taxes, price stabilization, and buffer stock programs. On the ground, one can observe that African governments implement input subsidy programs and reverse the abolishment of parastatal organizations, in spite of the prevailing critique of such policy instruments by some donor organizations. As the literature reviews included in this thesis show, the dominant explanations in the agricultural economics literature for the choice of such agricultural policies have mainly been based on the rational choice paradigm, such as interest group theories and voter-politician models. Explanations in the political science literature have focused on the role of politician’s self- interest in the form of patronage. Neither of these strands of literature has paid attention to the role of policy beliefs that different actors have and the influence of such beliefs on policy choices. The main rationale for this thesis is the proposition that a narrow focus on self-interest in the prevailing explanations of agricultural policy choices in Africa limits their value. This is especially the case, if the goal of policy research is to identify strategies on how long-standing controversies can be resolved with a view to moving towards more effective policy implementation. This thesis is based on case studies conducted in four countries: Ghana, Kenya, Senegal, and Uganda. The countries were selected because they are similar in the following aspects: They are largely agrarian-based, they implemented Structural Adjustment Programs in the 1980s, and they moved towards increasing support to agriculture in recent years. However, they differ in important characteristics, especially regarding the nature of their political system. These characteristics make them good case study examples for analyzing contested agricultural policy debates. By combining different types of case studies, the thesis covers the entire spectrum from policy formulation to policy implementation. The thesis begins with an introduction, which presents the rationale for the study, provides background information on the agricultural policy context in the four case study countries, and reviews the relevant literature in the fields of agricultural economics and political science. After the introduction, the thesis presents two case studies that deal with policy formulation. They focus on the policy discourse in three of the four case study countries, namely, Senegal, Ghana, and Uganda. In these case studies, the roles of policy discourses and policy beliefs in the policy process are examined. The case studies combine the Advocacy Coalition Framework with discourse analysis and narrative policy analysis to identify the predominant policy beliefs of different coalitions of actors. Based on interviews with a wide range of policy-makers and stakeholders, two main coalitions were identified in each country. In the case study of Ghana and Uganda, these coalitions were labeled “donor discourse coalition” and “domestic discourse coalition.” In Senegal, the labels “agricultural support coalition” and “agricultural support critique coalition” were used. As the cluster analysis showed, the donor coalition and the agricultural support critique coalition mostly comprise international financial institutions, the finance ministry, and academia. Members from the agricultural ministry, Parliament, political parties, and civil society groups mostly form the domestic coalition and the agricultural support coalition. The study finds strikingly similar patterns of policy beliefs across the three case study countries. Donors and domestic policy makers held fundamentally different policy beliefs regarding the question: What does it take to develop smallholder agriculture? While domestic policy actors tend to believe that transforming smallholder agriculture requires public intervention to provide modern inputs at subsidized rates, members of the donor coalition tend to believe that these interventions are market distorting and only motivated by political patronage. The narrative policy analysis of the discourses suggests that the agricultural support narrative has a convincing story-line with a clear beginning (low productivity caused by lack of inputs), middle (providing subsidized inputs), and end (increased productivity). In contrast, the agricultural support critique is mostly presented in the form of a non-story (focusing on what should not be done without providing a convincing alternative story-line of what should be done). Moving from policy formulation to decision-making on policy adoption, the third case study examines how divergent policy beliefs are translated into policy programs. The analysis focuses on two major agricultural programs in Ghana: the Block Farms Program and the agricultural investment program developed under CAADP, called Medium Term Agriculture Sector Investment Plan (METASIP). A participatory mapping of the process leading to the policy programs (called Process Net-Map) was combined with in-depth interviews conducted with policy experts. The empirical results reveal two divergent policy processes: (1) The METASIP policy process that involved broad stakeholder consultation, but where donors were considered the most influential policy actors in the process. (2) The policy process leading to the Block Farms Program. In contrast to the METASIP process, donors did not feature as policy actors in this policy process, which was also less consultative. Domestic policy makers, including the ruling political party, Parliament, and the president, played key roles in this policy process. A fundamental difference between the two programs relates to the policy orientation: The Block Farms Program takes a public sector approach, while METASIP stresses private sector participation in agricultural service provision. Thus, this case study indicates that basic differences in policy beliefs between donors and domestic policy makers are translated into different policy programs through parallel policy processes, which are not connected to each other. Therefore, the case study suggests that “two worlds” (donors and domestic policy makers) exist not only with regard to policy beliefs, but also with regard to policy processes and the resulting policy choices. After having covered policy formulation and policy adoption, the last two case studies deal with policy implementation. They focus on animal health services, because this is a policy field where the case study countries had already implemented policy reforms during the structural adjustment period. These reforms largely followed donor prescriptions to reduce government involvement and promote privatization. The two case studies aimed to analyze the effects of these reforms in relation to prevailing policy beliefs regarding the potential positive and negative effects of privatization. Data for the two case studies were collected through surveys of livestock keepers in a marginal livestock production area in the northern region of Ghana and in a high-potential dairy production area in Kenya. Key informant interviews with livestock policy experts were also conducted in Ghana. The analysis showed that the policy reform of liberalization introduced new players into the animal health service delivery systems. A multinomial logit model was applied to determine the factors that influence households’ choice of service providers. In Ghana, a low potential region (semi-arid, remote) was examined, and the analysis revealed that in this region government para-vets were preferred to community animal health workers and private para- vets. This choice was attributed to the relatively low performance of the community animal health workers, resulting from their limited training. In areas with few or no government para-vets, farmers resorted to self-treatment or to selling sick animals for human consumption, which has undesirable health implications. In Kenya, a high-potential area with intensive dairy production was examined. The results expectedly suggest that service delivery was generally better than in Ghana, as a private service provider market had indeed emerged. In this respect, the experience corresponded to the policy beliefs of those policy actors who had pursued this reform. However, the study found that poorer framers in these areas also face challenges in accessing qualified service providers. Thus, the findings indicate that privatization of livestock services had problematic results for farmers in marginal areas, as well as for poor farmers in high-potential areas. These experiences in the liberalization of the livestock sector may be one contributing factor to why domestic policy makers did not change their policy beliefs regarding the need for government intervention in support of smallholder farming. The final two chapters of the thesis discuss the findings of the five case studies in a cross-cutting perspective and derive implications from for policy processes that aim at developing smallholder agriculture in Africa. As the case studies show, the policy beliefs of donors and domestic policy makers are not easily reconciled, especially since there is a tendency among policy actors on both sides to have a positive self-representation and a negative other representation, which can easily lead to “blame games”. What seems rather problematic for bridging the gap between the “two worlds” is the view identified in the donor discourse that domestic policy makers only pursue government-focused programs as a strategy to stay in political power or to create opportunities for corruption. There would be no contradiction in accepting that domestic policy makers genuinely believe in the need for better physical access of smallholders to inputs, while acknowledging that such instruments have political advantages as well. The study suggests that if donors could accept genuine concerns of domestic policy makers, it would be easier to engage in a more productive policy dialogue, such as on how to make input-subsidy programs more effective or how to address service needs of poor livestock keepers. Based on the proposition that a more consensus-oriented approach will ultimately lead to more effective agricultural policies, the study concludes that it is critical to find strategies to promote such a dialogue between donor coalitions and domestic coalitions. Such strategies may aim at engaging policy actors through deliberation, building new coalitions, promoting policy-oriented learning, and involving policy brokers to find new alternative solutions to reach a consensus. Considering the similarities found across the four case study countries, the study also concludes that the findings are relevant for other African countries.