Jean-Christophe Bureau

Agricultural Productivity Revisited

This paper describes production accounts for agriculture. Output is defined as gross production leaving the farm as opposed to real value added. Inputs are not limited to capital and labor but include intermediate inputs as well. We derive index numbers of gross output, capital, labor, and intermediate inputs. These data are used to construct indexes of total factor productivity. We then compare the contributions of input growth and productivity growth to economic growth. The important role of productivity growth in agriculture becomes immediately apparent. Copyright 1997, Oxford University Press.

Levels of Farm Sector Productivity: An International Comparison

This articlefocuses on the relative levels of farm sector productivity forthe United States and nine European countries for the period1973 to 1993. At the beginning of the period, Belgium had thehighest level of productivity relative to the United States at1.689. Ireland had the lowest relative productivity at 0.759.By 1993, the range of levels of productivity had narrowed significantly,from 0.709 for Ireland to 1.392 forthe Netherlands. Further evidence of convergence can be seenin the coefficient of variation, which fell steadily from 0.261in 1973 to 0.227 in 1993. Results based on regressionanalysis show a highly significant inverse relation between therate of productivity convergence and the initial level of productivity,consistent with the ``catch-up hypothesis. The results generallysupport the existence of a positive interaction between capitalaccumulation and productivity growth, suggesting embodiment.

Product Safety Provision and Consumers' Information

Economic mechanisms related to the provision of product safety are explored, with particular attention paid to the structure of consumers information. The case of perfect information, of experience goods (for which consumers detect product safety after consumption) and of credence goods (where consumers cannot link a disease to a particular product consumed in the past) are explored. Imperfect competition is assumed in the supply sector. In the case of both perfect information and experience goods, market equilibrium is characterised by a less-than-socially optimal provision of safety, when the safety effort is costly. With credence goods, imperfect information leads to the absence of safety effort and to a market closure. Different types of public regulation aiming at increasing consumer protection and circumventing market failures are explored. Particular attention is paid to minimum safety standards, labels and liability enforcement. The relative efficiency of these instruments depends on the information structure. In the cases of perfect information and experience goods, a minimum safety standard can be an efficient instrument. Regulation is necessary but not sufficient to avoid market failure in the case of credence goods. Copyright 2000 by Blackwell Publishers Ltd/University of Adelaide and Flinders University of South Australia

Food Security and Agricultural Protection in South Korea

South Korea has been pursuing food self-sufficiency using high tariffs and high administrative prices in key agricultural and food markets. Using a dual approach to trade and trade restrictiveness indices, we analyze the impact of these market distortions on welfare and trade volume. Then, we compute second-best distortions, which minimize the welfare cost of meeting observed levels of self-sufficiency and production. We rationalize these second-best distortions to what could be claimed as legitimate protection under a food security (FS) box in World Trade Organization (WTO) negotiations. FS-box protection is sensitive to changes in the definition and the extent of the FS objectives. We show that FS via production targets and reliance on imports would be more palatable to consumers and trade partners, while preserving income transfer to the farm sector.

On inefficiencies in the European sugar regime

Abstract This paper focuses on two main sources of inefficiency in the European Union (EU) sugar regime. The first one lies in the rigid allocation of production imposed by the present Common Agricultural Policy arrangements that are based on a price support mechanism and a system of nontradable quota rights. An analytical framework is developed in order to assess the effects of allowing quota rights to be traded between producers. Three particularities of the sugar regime, i.e., the distinction between A and B quotas, the levy mechanism and the possibility to produce C sugar at world price, are taken into account. Empirical results suggest that the nontradability of quotas results in large producer welfare losses. The second source of inefficiency lies in the production of A and B sugar in excess with respect to domestic consumption that is exported on the world market thanks to a producer levy on the sugar under quota. The system is self-financing and budget-neutral. However, it provides an incentive for farmers to produce sugar beets at a marginal cost that exceeds the world price, even though they must fund export subsidies. A decrease in the global level of sugar quota in the EU would result in an increase in producers surplus.

Impact of the 1996 US FAIR Act on the Common Agricultural Policy in the World Trade Organisation context: the decoupling issue

Abstract The United States (US) Federal Agriculture Improvement and Reform (FAIR) Act of 1996 represents a watershed, not only from a domestic point of view but also from the perspective of the next round of international agricultural negotiations. In particular, it will force the European Union (EU) to reform its agricultural policy so that compensatory payments for support price cuts are included in the green box or, at least, are much more decoupled than at present. US exports of several agricultural products, including maize, pork and poultry meat, barring a prolonged global economic downturn, should increase substantially over the 7-year period of the Act and beyond. Accordingly, the US will certainly attempt to ensure that trade barriers with the EU and subsidised competition from the EU in third markets are kept to a minimum. Though the 1999 EU proposals for a new reform of the Common Agricultural Policy (CAP) represent a courageous step in the right direction, they are likely to be insufficient to comply with future World Trade Organisation (WTO) commitments, in particular with regard to the decoupling of direct aid payments. We have made a number of proposals for an internal support policy which explicitly recognises that European farmers have several functions that require specific forms of public intervention and which should comply with future WTO requirements.

European Biofuel Policy: How Far Will Public Support Go?

The strong biofuel expansion experienced in the European Union (EU) originates in the incentives set up by Member States (MSs) within a global framework provided by the EU. A significant part of the EU rapeseed production (more than half) is now channeled into the energy market. MSs support the development of biofuels through subsidies/tax exemptions, mandatory blending, and import barriers (at least for ethanol). Several motivations for supporting biofuels have been put forward. For some MSs, the motivation was clearly to increase agricultural income (e.g., in France and Germany). In other cases, biofuels (produced domestically or imported) were mainly seen as a means to abate GHG emissions. Public support for biofuels has recently been questioned. Some potentially negative effects of biofuels (most notably the indirect land use change) have fueled the debates in the EU Parliament and Commission over the adoption of the 2008 Renewable Energy Directive. These discussions have led to the adoption of less stringent mandatory incorporation targets for 2020 (with respect to the initial 2007 proposal), as the objectives are now set in terms of “renewable fuels” (i.e., biofuels, hydrogen, and green electricity). In spite of an agreement on targets for 2020, some important questions still need to be addressed. The indirect land use change triggered off by biofuel production is the most critical. The ability of the Commission to come up with a clear methodology to address this issue is a necessary condition for the enforcement of the biofuel targets.

Les indices de productivité. Aspects méthodologiques et application à l'agriculture

La productivite peut etre mesuree a laide de plusieurs indices qui ne sont pas independants des hypotheses que lon peut avancer en theorie de la production. Sur lexemple de lagriculture francaise entre 1967 et 1985, ces indices conduisent a des resultats differents. Lanalyse de ces divergences amene a definir quelques regles de choix dune mesure de levolution de la productivite en agriculture.