Jan Pokrivcak

Transaction costs, product specialisation and farm structure in Central and Eastern Europe

In Western Europe, the USA and other developed countries agriculture is dominated by small family farms. In Central and Eastern European countries (CEECs) a dual structure of farms exists. There are large corporate farms (CF) and small family farms (FF) in CEECs. This article shows that both CF and FF specialise in commodities in which they have a comparative advantage. CF specialise in capital-intensive products and in products with low labour monitoring requirements. FF specialise in products with higher labour monitoring requirements. The implication of this study is that farm structure indirectly determines in which products a country will be competitive on international markets. This is especially important for transition countries where high transaction costs hinder changes of farm organisation. Because of high transaction costs, farms are more flexible in adjusting production structure than adjusting farm organisation in transition countries.

Do agricultural subsidies crowd out or stimulate rural credit institutions? The Case of CAP Payments

In this paper we estimate the impact of subsidies from the EU’s common agricultural policy on farm bank loans. According to the theoretical results, if subsidies are paid at the beginning of the growing season they may reduce bank loans, whereas if they are paid at the end of the season they increase bank loans, but these results are conditional on whether farms are credit constrained and on the relative cost of internal and external financing. In the empirical analysis, we use farm-level panel data from the Farm Accountancy Data Network to test the theoretical predictions for the period 1995–2007. We employ fixed-effects and generalised method of moment models to estimate the impact of subsidies on farm loans. The results suggest that subsidies influence farm loans and the effects tend to be non-linear and indirect. The results also indicate that both coupled and decoupled subsidies stimulate long-term loans, but the long-term loans of large farms increase more than those of small farms, owing to decoupled subsidies. Furthermore, the results imply that short-term loans are affected only by decoupled subsidies, and they are altered by decoupled subsidies more for small farms than for large farms; however, when controlling for endogeneity, only the decoupled payments affect loans and the relationship is non-linear.

Economic analysis of the link between diet quality and health: Evidence from Kosovo

HighlightsA theoretically motivated two‐stage estimation strategy is employed to analyse diet diversity and its impact on BMI.Economic and demographic factors drive the choice of balanced diets in a sample of Kosovar adults.Diet diversity has a significant non‐linear impact on underweight and obesity leading to healthier status.Diverse, better quality diet should serve as a cornerstone for public health policy. ABSTRACT We analyse the link between diet diversity, (which is a proxy of diet quality) and health outcomes measured by body‐mass index (BMI) in a representative sample of Kosovar adults using household expenditure micro‐data. Building on a household model of health production we devise a two‐stage empirical strategy to estimate the determinants of diet diversity and its effect on BMI. Economic factors and demographic characteristics play an important role in the choice of balanced diets. Results from the BMI analysis support the hypothesis that diet diversity is associated with optimal BMI. One standard deviation increase in diet diversity leads to 2.3% increase in BMI of the underweight individuals and to 1.5% reduction in BMI of the obese individuals. The findings have important implications for food security policies aiming at enhancing the public health in Kosovo.

The role of non-tariff measures in EU dairy trade with Russia

This article investigates Russian non-tariff measures (NTMs) on dairy products and their implications for EU dairy exports. Based on survey results, numerous and detailed Russian standards on imported dairy products are considered by respondents as redundant and unnecessary from a food safety perspective. Conformity assessment procedures are identified as a major problem when exporting to Russia. They are non-transparent, time-consuming and expose exporters to significant risk that their products may be refused entry at the Russian border. Audits by Russian inspectors seem to be subject to arbitrary rules and exporting companies face great uncertainty because of unclear and often changing rules. Both fixed and variable costs may increase due to Russian non-tariff measures, adding an estimated 5–10% of export value to costs. The gravity model estimates indicate that, after controlling for other variables, non-tariff measures are more restrictive on US exports to Russia than on EU exports to Russia, while New Zealands exports to Russia are least affected by NTMs. Overall, the estimates do not confirm that Russias NTMs are significantly more restrictive than is the case with other countries NTMs. Although Russian standards for dairy imports are inhibiting trade they are not more restrictive than those implemented by other countries.

Food Security and household consumption patterns in Slovakia

We investigate the food security situation of Slovak households in terms of both access to food and quality of the diet consumed by estimating food demand system and diet diversity demand models using household budget survey data over the period 2004-2010. In most samples demand for meat and fish and fruits and vegetables is expenditure and own-price elastic. On average all five food groups investigated are found to be normal goods. Rural and low-income households appear more expenditure and price sensitive compared to the urban and high-income ones. Results from quantile regressions indicate that income has a positive while uncertainty has a negatively effect on the diversity of the diet as the effects are stronger in more vulnerable, low income and rural consumer subsamples. Overall the food security situation in Slovakia appears to have improved over time, since the country’s EU accession.

Biofuels and Vertical Price Transmission: The Case of the U.S. Corn, Ethanol, and Food Markets

This is the first paper to analyze the impact of biofuels on the price transmission along the food chain. Specifically, we analyze the U.S. corn sector and its vertical links to food and ethanol markets. The key result of this paper is that the presence of biofuels affects the price transmission elasticity only when the blenders tax credit is binding and the shock originates in the food market. Our another important result is that the response of corn and food prices to exogenous shocks in the corn or food markets is always lower in the presence of biofuels when the tax credit is binding. However, the results are mixed for the binding mandate. The sensitivity analyses indicate that our results are robust to different assumptions about the model parameters.

Craft Beer in Slovakia

The objective of this chapter is to evaluate how globalization of the Slovak economy, economic growth, inflow of FDI in brewing industry, affected not only the structure of the standard beer market but also the expansion of craft brewing. In particular, we evaluate how the interplay between the developments of standardized and globalized traditional beer industry, income growth resulting in increasing demand for beer diversity, and development and dissemination of craft brewing technology and know-how, changing lifestyles and expansion of entrepreneurship as well as government policies affected the growth of craft breweries. A survey was performed among craft breweries. A structured interview was used as a tool of data collection. There were 20 owners of craft breweries in Slovakia interviewed (out of total number of 51). The survey was focused on factors affecting demand for craft beer, the impact of traditional beer market characterized by homogenous products on demand for differentiated craft beer in Slovakia, types of beers produced by craft breweries, motivation behind starting the craft brewery, factors influencing the supply of craft beer, availability of inputs, know-how for craft beer production, regulation of craft beer production, government support for craft beer production, and vertical and horizontal cooperation in micro-brewing. Results show availability and better prices of technologies and inputs for brewing beer, know-how and EU subsidies have a positive impact on the supply side, while higher incomes, increasing demand for product diversity, and changing lifestyles had a strong positive impact on the demand side. On the other hand, there are some barriers for expansion also. The major ones are bureaucracy, lack of qualified brewers and taxation policy.

The impact of agricultural and trade policies on price transmission: The case of Tajikistan and Uzbekistan

abstract This paper examines the extent and speed of price transmission from international to local markets in two transition economies, Tajikistan and Uzbekistan. The two countries have similar economic backgrounds, but a notable difference is that Tajikistan has adopted a more liberal agricultural trade regime than Uzbekistan. We use a vector error correction model to analyse how global agricultural prices are transmitted to domestic food prices in the two countries. We find strong cointegration between world market and domestic prices in Tajikistan for food crops but not meat, and no cointegration in Uzbekistan.

Online grocery retailing in Germany: an explorative analysis

The paper focuses on the German food retailing industry with its market characteristics and the status quo of online food retailing in Germany by analysing data from market research institutes and consumer direct questionnaire. The paper examines the consumers’ perceptions of online as well as offline grocery shopping. As a result, an online grocery model was created using PLS-SEM modelling. It illustrates all major success factors related to the consumer’s willingness to shop for groceries online in Germany. The main factors influencing the willingness to shop for groceries online are awareness of benefits, need for more convenience, and change of the lack of trust in the new distribution channel. We identified some consumer groups that are more open to online shopping as they benefit more from online grocery shopping. Especially working mothers and young professionals are the consumer groups with a high potential interest.

Price transmission along the food supply chain in Slovakia

This article examines the price relationship along the food supply chain in Slovakia. We analyse a long-run relationship between farm and retail level in the vertical chain of milk, beef, pork, chicken, potatoes and apples. A cointegration approach is used to study the long-run relationship. We test for the existence of a structural break in the time series data (Gregory Hansen test) in the period observed and allow for the existence of a non-linear relationship between prices at various levels of the vertical chain by using threshold autoregressive models. We find evidence of asymmetry in price transmission along the food supply chain.