Harald Grethe

The adoption of the Eurepgap Standard by Mango Exporters in Piura, Peru

The significance of standards in international agricultural trade is continuously rising. Due to their complexity, especially private industry standards are often expected to have a negative impact on agricultural export sectors in developing countries. The successful adoption of standards by a broad number of producers can be seen as a condition to limit negative socioeconomic consequences. This case study for the mango export sector in Piura, Peru, analyzes the adoption of the Eurepgap standard, based on a theoretical framework of a compliance process of three stages (information stage, decision stage, implementation stage). The empirical part is based on interviews with farmers. A comparison between certified producers and a control group identifies the mechanisms that lead to an adoption of the standard. A first major barrier to adoption is the access to information on the standard. Exporting enterprises are the most important source of information. Analysis at the decision stage shows that vertical integration is the most important factor in the adoption of the standard. A contemplation of the implementation stage shows that the costs of compliance are at 9.51 US

An integrated economic model of multiple types and uses of water

/ton on average or 3.8% of the product price. Factors that influence the costs of compliance are the starting point, the target level and the involvement of exporter enterprises. Consequently, the activities of exporter enterprises can be identified as the key factor for the adoption of the standard in the sector. Furthermore, the standard involves the risk of exclusion of certain producer groups.

The challenge of integrating EU and Turkish agricultural markets and policies

Water scarcity is an increasing problem in many parts of the world and the management of water has become an important issue on the political economy agenda in many countries. As water is used in most economic activities and the allocation of water is often a complex problem involving different economic agents and sectors, Computable General Equilibrium (CGE) models have been proven useful to analyze water allocation problems, although their adaptation to include water is still relatively undeveloped. This paper provides a description of an integrated water-focused CGE model (STAGE_W) that includes multiple types and uses of water, and for the first time, the reclamation of wastewater as well as the provision of brackish groundwater as separate, independent activities with specific cost structures. The insights provided by the model are illustrated with an application to the Israeli water sector assuming that freshwater resources available to the economy are cut by 50%. We analyze how the Israeli economy copes with this shock if it reduces potable water supply compared with further investments in the desalination sector. The results demonstrate that the effects on the economy are slightly negative under both scenarios. Counter intuitively, the provision of additional potable water to the economy through desalination does not substantively reduce the negative outcomes. This is mainly due to the high costs of desalination, which are currently subsidized, with the distribution of the negative welfare effect over household groups dependent on how these subsidies are financed.

When Water Saving Limits Recycling: Modeling Economy-wide Linkages of Wastewater Use

This paper addresses the potential consequences of a political and economic integration of EU and Turkish agriculture and evaluates the resulting challenges. Simulation models reveal declining agricultural prices for Turkey in the case of market integration with the EU. This would lead to less production, more consumption and Turkey becoming a net importer of agricultural products. Resulting comparative static net welfare gains may amount €0.5 billion. More important, however, are the productivity effects which may be generated by the prospect of EU membership. A realistic range of outlays for implementing the CAP in Turkey is between €3.5 and 6.3 billion. The main challenge for Turkey in the years to come is to increase agricultural productivity. In order to channel EU funds into productivity-enhancing policies, the second pillar of the CAP is a more suitable instrument than direct payments which are based on area endowment and tend to capitalise into land prices.

Agriculture Policy: What Roles for the EU and the Member States?

The reclamation of wastewater is an increasingly important water source in parts of the world. It is claimed that wastewater recycling is a cheap and reliable form of water supply, which preserves water resources and is economically efficient. However, the quantity of reclaimed wastewater depends on water consumption by economic agents connected to a sewage system. This study uses a Computable General Equilibrium (CGE) model to analyse such a cascading water system. A case study of Israel shows that failing to include this linkage can lead to an overestimation of the potential of wastewater recycling, especially when economic agents engage in water saving.

Introducing Carbon Taxes in Russia: The Relevance of Tax-Interaction Effects

Agricultural Policy has been a core element of the European Economic Community since its early beginnings (Tracy 1989, 1997). The assessment of the role for the European Union (EU) and the Member States in agricultural policy in this chapter is based on the principle of subsidiarity as defined in Ederveen et al. (2008). The Treaty of the European Community (1997) states that “the Community shall take action, in accordance with the principle of subsidiarity” only for “areas which do not fall within its [the Community’s] exclusive competence” (Art. 5, par. 2). This chapter, however, goes beyond this definition and reviews the role of the EU and the Member States in agricultural policy design and funding independently from the criterion of whether they fall under exclusive responsibility of the EU, such as large parts of agricultural policy in the EU. The basis for the assessment of the role of the EU and the Member States is the functional test for subsidiarity developed in Ederveen et al. (2008).

Do land transfers to international investors contribute to employment generation and local food security? : Evidence from Oromia Region, Ethiopia

Abstract The theoretical literature on the double-dividend concept is mainly focused on pre-existing distortionary taxes in the labour and capital markets; the relevance of interactions with other taxes is often neglected. Using an analytical model and a numerical general equilibrium model, we analyse the welfare effects of carbon taxes and their interaction with other taxes applied in Russia. We find that substituting carbon taxes for labour taxes in Russia can substantially reduce the cost of carbon taxation compared to returning carbon tax revenues to households in lump-sum form and can even result in welfare gains in Russia. In conclusion, introducing carbon taxes has an indirect corrective effect with respect to the distorting effect of export taxation on energy resources. Furthermore, welfare costs of carbon taxation can be significant under the assumption of perfect international mobility of capital. Nevertheless, the cost can be more than compensated in case of a high carbon trade price.

Is Bhutan destined for 100% organic? Assessing the economy-wide effects of a large-scale conversion policy

Purpose - – Like many countries in the developing world, Ethiopia has leased out a huge amount of land to foreign investors. However, empirical evidence on the contribution of international investments to employment generation and food security is limited. The purpose of this paper is to examine the contribution of large-scale farms to local-level food security in Bako Tibe District, Oromia Region. Design/methodology/approach - – Primary data were collected from 200 randomly selected households from two purposefully selected villages in the district. Secondary data were collected from government offices and the literature. Propensity score matching was used to match households based on observable characteristics. Using the World Food Programme (WFP) approach, the food consumption score (FCS) of households was calculated. Finally, the Average Treatment effect for the Treated was determined. Findings - – Findings indicate that foreign land deals increase the odds of households falling into food insecurity and that the employment opportunities are both temporal and marginal. Furthermore, these land deals result in a decline of households’ FCS and thus have a negative effect on households’ food security. Research limitations/implications - – The result is based on a case study which is not generalizable to the whole of Ethiopia. Practical implications - – The result implies that future endeavours should resort to substantial changes in the principles of investment as well as the design and enforcement of contracts on land transfers so that international investors can commit to objectives beyond private profit. Originality/value - – It examines the effect of large-scale land transfers commonly termed as land grabbing on local food security. The paper makes an important contribution to the current policy debates regarding land grabbing in Ethiopia as research about the contribution of land deals to the food security is limited.

Impacts on poverty of removing fuel import subsidies in Nigeria

Organic agriculture (OA) is considered a strategy to make agriculture more sustainable. Bhutan has embraced the ambitious goal of becoming the world’s first 100% organic nation. By analysing recent on-farm data in Bhutan, we found organic crop yields on average to be 24% lower than conventional yields. Based on these yield gaps, we assess the effects of the 100% organic conversion policy by employing an economy-wide computable general equilibrium (CGE) model with detailed representation of Bhutan’s agricultural sector incorporating agroecological zones, crop nutrients, and field operations. Despite a low dependency on agrochemicals from the onset of this initiative, we find a considerable reduction in Bhutan’s GDP, substantial welfare losses, particularly for non-agricultural households, and adverse impacts on food security. The yield gap is the main driver for a strong decline in domestic agricultural production, which is largely compensated by increased food imports, resulting in a weakening of the country’s cereal self-sufficiency. Current organic by default farming practices in Bhutan are still underdeveloped and do not apply the systems approach of organic farming as defined in the IFOAM organic farming standards. This is reflected in the strong decline of nitrogen (N) availability to crops in our simulation and bears potential for increased yields in OA. Improvement of soil-fertility practices, e.g., the adoption of N-fixing crops, improved animal husbandry systems with increased provision of animal manure and access to markets with price premium for organic products could help to lower the economic cost of the large-scale conversion.

Modelling CAP Decoupling in the EU: A Comparison of Selected Simulation Models and Results

The petroleum sector contributes substantially to the Nigerian economy; however, the potential benefits are diminished because of the existence of significant subsidies on imports of petroleum products. Subsidies on imported petroleum products are considered to be an important instrument for keeping fuel prices, and hence the cost of living, low. The costs of these subsidies, however, have risen dramatically in recent years along with increased volatility in world petroleum and petroleum product prices and increased illegal exportation of subsidized petroleum products into neighboring countries. Removing the subsidy on fuel is one of the most contentious socioeconomic policy issues in Nigeria today. In this paper, an economy-wide framework is used to identify the impact of removing the fuel subsidy on the Nigerian economy and investigate how alternative policies might be used to meet socioeconomic objectives related to fuel subsidies. The results show that although a reduction in the subsidy generally results in an increase in Nigeria’s gross domestic product, it can have a detrimental impact on household income, and in particular on poor households. Accompanying the subsidy reduction with income transfers aimed at poor households or domestic production of petroleum products can alleviate the negative impacts on household income.