David Colman

Estimating Irreversible Supply Functions

The question of specifying and estimating irreversible functions has arisen most frequently in the context of agricultural supply. Theoretical arguments in favor of an asymmetric response of output to rising and falling prices were advanced by Johnson. A number of authors have attempted to estimate such relationships (Hartman, Houck, Saylor, Tweeten and Quance 1969). In this paper, we argue that the general lack of success of these studies is the result of a misunderstanding of the nature of the supply irreversibility. An alternative method of segmenting the price series is proposed and an empirical example presented.

Diversification and Livelihood Sustainability in a Semi-Arid Environment: A Case Study from Southern Ethiopia

Abstract This paper examines the recently growing adoption of non-pastoral livelihood strategies among the Borana pastoralists in southern Ethiopia. A large portion of the current non-pastoral participation is in petty and natural resource-based activities. Pastoral and crop production functions are estimated using the Cobb-Douglas model to analyse the economic rationale behind the growing pastoralist shift to cultivation and other non-pastoral activities. The low marginal return to labour in traditional pastoralism suggests the existence of surplus labour that can gainfully be transferred to non-pastoral activities. An examination of the pastoralist activity choices reveals that the younger households with literacy and more exposure to the exchange system display a more diversified income portfolio preference. The findings underscore the importance of human capital investment and related support services for improving the pastoralist capacity to manage risk through welfare-enhancing diversified income portfolio adoption.

Chinese agricultural policies and agricultural reforms.

Abstract The rapid agricultural growth and dramatic changes in rural China in the last decade due to the post‐Mao agricultural reforms have attracted more and more attention at home and abroad. How...

The effect of structural adjustment on the Nigerian agricultural export sector

The paper investigates the effects of the trade and foreign exchange management policies of the structural adjustment programme (SAP) on the Nigerian agricultural export sector. Protection rates and the incidence parameter are used to evaluate the policy outcomes over the 1970-92 period. Our analysis indicates that the protection of import-competing sectors has not been eliminated and that it results in the taxation of all exportables, with the largest proportion of such taxes borne by agricultural exportables. The inability of the SAP policy instruments to achieve their objectives was partly because of failure to maintain consistent policies and partly due to a weak approach to implementation of some policies.

Problems of measuring price distortion and price transmission: a framework for analysis

Abstract In the contemporary condition where IMF and IBRD lending policies to less‐developed countries (LDCs) involve imposing conditions for agricultural price and trade policy reform, and where the reform requirements are based on measures of price distortion and protection, this paper examines aspects of the robustness of these measures. It presents a framework for deriving measures of price distortion and price transmission. Using this, it considers the links between both types of measure, and something of the types of results which can be expected. It also considers general aspects of the relationship between domestic LDC and international commodity prices, and argues that many studies use, or assume, measures of price distortion and transmission which are flawed.

The breakdown of the Milk marketing schemes

Abstract For almost 60 years milk marketing in the UK has been controlled by statutory milk marketing boards, which have often been regarded as a classic example of the use of discriminatory monopoly pricing exercised for the benefit of producers. This paper describes the development and characteristics of the system, questions the effectiveness of the boards, and considers the challenges to their authority which have recently emerged. These stem partly from opposition by producers and processors and from the latent antagonism of the European Commission. It is now anticipated that the boards will lose their statutory powers and possibility be replaced by unitary voluntary cooperatives. This paper considers the prospects for co‐operative success concluding that there are substantial difficulties still to be overcome.

Non-farm rural activities in a peasant economy: the case of the North Peruvian Sierra

The paper investigates the prospects of a non-farm, labour-intensive, rural activity (hat making) with strong linkages to an agriculturally backward economy. Hat making employs exclusively family labour, the main input (straw, paja de palma) is purchased from Ecuador, and consumers are concentrated in villages and small towns in rural areas. Following the presentation of a simple theoretical model of the market for hats, attention turns to an empirical analysis of the demand for hats and of the labour returns in hat supply. Primary data from four villages of the Peruvian North Sierra have been used. Demand and supply constraints to the expansion of the hat making activity are identified and important differences in the value of labours marginal product across the sample are found. It is concluded that growth based on local demand will not be feasible given falling incomes of consumers-mainly farmers-and expected changes in consumer preferences. The growth motor for non-farm rural activity will have to rely more on market expansion and product diversification to urban consumers. Copyright

Principles of agricultural economics: Theory of consumer behaviour

Introduction The purpose of all agricultural production is the satisfaction of consumer wants. In this chapter we will present an analytical framework with which consumer behaviour can be studied. At the outset we must distinguish between human requirements in physiological or nutritional terms and demand for agricultural products which is expressed in economic terms. The study of the former, while useful as a means of identifying instances of malnutrition or other forms of deprivation, does not offer any information on how consumption patterns alter as consumers’ economic circumstances change. The analysis of a number of important policy questions requires an understanding of consumer demand as expressed in the marketplace. For example, the policy analyst might require information on the following: In the course of economic development with average incomes rising, which sectors in the economy will prosper and which will decline in importance? Within the agricultural sector, which producers will enjoy an increasing demand for their products and which producers will face a stagnant or declining market? How would the pattern of consumption change, if the distribution of income were to change? Will an increased rate of urbanisation have any effect on consumption? If the price of a particular food product is changed, say by imposing a sales tax or a subsidy, how will consumers respond? What will be the effect on consumption of that product, the consumption of other foods, the government exchequer etc.? A basis for theoretical and empirical work on these types of questions is provided by the traditional or neoclassical model of consumer behaviour and it is with this approach that this chapter is concerned.

The effects of agricultural policies on the patterns of specialized grain production in China: An application of a quadratic spatial equilibrium model in the Chinese grain sector

Abstract A spatial equilibrium model of the Chinese grain sector has been constructed for 26 regions. The model is calibrated to the overall supply‐demand balance in 1985. It is used to test the implications of the dominant policy instruments which have been applied to the grain sector, namely forced procurement and low procurement prices. Comparing these separately and together against the alternative of freely competitive inter‐regional trade reveals the effectiveness of forced procurement in extracting a surplus from agriculture; this is magnified when indirect taxation of grain supply is applied simultaneously.

Principles of agricultural economics: Product supply and input demand

Introduction Whereas the previous chapter was concerned with the theory of supply and input demand at the level of the firm, attention now switches to supply and input demand at the market level. That is, we are concerned with the outcomes of the decisions of all farmers in a particular market, where the market for any commodity may be defined in relation to whole countries, regions of countries, or even at the world level. Since agricultural policy is typically made at national or regional level, and since the statistics which provide the key information about developments in the agricultural sector are usually presented for these levels, policy-related empirical research needs to focus upon market level behaviour. Certainly, issues of market level agricultural supply are central to development strategies, and there will be a requirement that the agricultural sector should provide a growing surplus (over and above the needs of the agricultural population) of agricultural product. The reasons for this have been well documented but can be summarised as: (i) to increase food supplies and agricultural raw materials at ‘ low’ prices, (ii) to increase the purchasing power of farmers and hence the domestic market for non-agricultural products in the rural sector, (iii) to facilitate transfers of labour and other resources from agriculture for industrial development, and (iv) to increase foreign exchange earnings from agricultural exports. The contribution which the agricultural sector can make in these areas will depend on the responsiveness of domestic producers to economic incentives and to price signals in particular.