Murray Fulton

The Inconsistency of Land Values, Land Rents, and Capitalization Formulas

This paper examines relationships that exist between farm income, land values, and capital asset pricing theory. Using two commonly referenced data sets, it is shown that land prices and land rents do not have the same time-series representations, a necessary condition for the simple capital asset pricing theory to hold. This suggests that a fundamental rethinking of the way in which land prices are viewed and modeled is needed. More complex models that allow for rational bubbles, risk aversion, and future shifts in government policy or commodity prices may be required.

The Future of Canadian Agricultural Cooperatives: A Property Rights Approach

prise seems to be in jeopardy. Substitutes for farm-produced products and inputs are, to an increasing extent, coming from nonfarm sectors. Vertically integrating relationships shift control to the industrial sectors serving agriculture, and make entrepreneurship of the family-farm obsolete. The rise of farm-product factories, as in eggs and feeder cattle, suggests the feasibility of giant-sized firms organized along the lines of industrial corporations. If traditional agriculture is in the process of eroding away, the whole conception of the farmer cooperative and its role in society will need to be reexamined. If I am not mistaken, a compelling argument can be made for farmer cooperatives in an atomistic setting. Disappearance of atomism will cause that rationale to vanish with it

Agroecosystem sustainability: a system simulation model approach

Abstract The sustainability of agroecosystems depends on the maintenance of the economic, biological and physical components that make up the system. The high level of integration of these components implies that any evaluation of agroecosystem sustainability must consider the dynamics of multiple components. In recent years a number of system simulation models have been developed to examine different aspects of agroecosystem sustainability. This paper presents a brief description of a simulation model developed to evaluate agroecosystem changes using a number of indicators. Agroecosystem sustainability is then evaluated using simulation results for a series of agricultural production systems in Saskatchewan, Canada. The results indicate that the economic and environmental sustainability of the system is dependent on the biophysical constraints which determine the management options that are technically, agronomically and economically viable. The simulations revealed that system sustainability did not uniformly increase or decrease according to the indicators used.

Process Innovation Activity in a Mixed Oligopoly: The Role of Cooperatives

This article develops a sequential game-theoretic model of heterogeneous producers to examine the market and welfare effects of cooperative involvement in process innovation activity in the agricultural sector. The analysis examines an open-membership, input-supplying cooperative (co-op) that maximizes member welfare and finances its innovation activity through retained earnings. Analytical results show that the presence of the co-op can increase the arrival rate of innovations while reducing the price of agricultural inputs. Cooperative involvement in innovation activity can thus be welfare enhancing and socially desirable with its effectiveness being determined by the degree of producer heterogeneity and the size of innovation costs.

Supply chain management: the case of a UK baker preserving the identity of Canadian milling wheat

This paper examines bread wheat quality and its effect on vertical co‐ordination in the wheat supply chain. Wheat quality is defined by many different characteristics, which poses limitations on the effectiveness of industry grading schemes in meeting the quality needs of end‐users. Consequently, individual processors may have an incentive to segregate wheat based on their own quality specifications. The costs and benefits of wheat segregation are analysed using a simple economic model, and illustrated with a case study of supply chain management taken from the UK bread industry. Warburtons Ltd procures bread wheat varieties with specific intrinsic quality attributes from Canada using identity preserved supply contracts. The paper concludes that the benefits of wheat quality control will encourage millers and bakers to develop closer vertical linkages with wheat suppliers in the future.

Cooperative growth: Is it constrained?

This article explores the issue of cooperative growth from both an empirical and theoretical perspective. Using total assets as the measure of cooperative size, we present long-term, time-series data from seven of the largest regional agricultural cooperatives in Canada and the United States. We then examine the issue of growth from a theoretical perspective, integrating the literature on investor-oriented firm growth with the literature on cooperative growth. The empirical analysis that follows from the theoretical analysis suggests it is not possible to reject Gibrats Law for six of the seven cooperatives; that is, that a cooperatives long-term growth rate is independent of its size. The empirical results also suggest the growth rate for the cooperatives in the sample is low, perhaps even zero.

Efficient Redistribution Using Quotas and Subsidies in the Presence of Misrepresentation and Cheating

This paper introduces misrepresentation and cheating into the policy analysis of output quotas and subsidies. Analytical results show that when cheating occurs output quotas are a less efficient means of income redistribution than is traditionally believed. As well, cheating increases the transfer efficiency of output subsidies. The result is that an all-or-nothing choice between quotas and subsidies will generally favor the use of subsidies. A combination of quotas and subsidies, however, usually remains the most efficient means of income redistribution through market intervention. Copyright 2000, Oxford University Press.

Estimating the objectives of a public firm in a natural resource industry

Abstract The purpose of this paper is to understand the behavior of policymakers in a public firm. To accomplish this goal, the objectives of a government-owned firm operating in the Saskatchewan uranium industry are econometrically estimated. The estimates are used to determine the importance policymakers attach to the outcomes resulting from their behavior and to examine how the firm might respond to changes in its economic environment. Empirical results indicate that the public firm is willing to reduce profits in order to increase employment and reserves.

Agency and Leadership in Cooperatives

The poor financial performance of a number of previously successful agricultural cooperatives appears to be connected to member commitment, which in turn is linked to the decisions made by the cooperatives’ leaders. While cooperative members should have an incentive to hire leaders that promote strong organizational commitment, the evidence suggests this incentive is weaker than imagined. This paper shows that cooperatives that believe they have a well-defined and loyal membership are less likely to hire leaders that will enhance member commitment. Thus, historical success is no guarantee of future success and may in fact contain the seeds of failure.

Corporate governance and subjective well-being

The results from a cross-country empirical analysis show that corporate governance and ethics are linked to national scores of subjective well-being. This impact is over and above the effect that corporate governance has on national income, suggesting that people value corporate governance for additional reasons besides its economic impact.