Agricultural Policy Options Research Articles

Climate Change and Agricultural Policy Options: Indian Story

Agriculture is facing constant challenges with a growing population and climate change. The sector is very fragile and risk-prone. In order to maintain sustainability in crop production, we must be prepared to adopt all climatesmart technologies that can reduce the adverse effects of a warming climate. There is an urgent need to assess climate change impacts and frame policies related to climate change mitigation. Modern agriculture must include the Sustainable Development Goals of the United Nations so that we not only achieve food and nutritional security but also confirm the livelihood security of our nation. This article is an overview of the state of changing climate and our management practices tackling every challenge that may encounter in the development process.

Integrating agricultural policies and water policies under water supply and climate uncertainty

Understanding the interactions of water and agricultural policies is crucial for achieving an efficient management of water resources. In the EU, agricultural and environmental policies are seeking to converge progressively toward mutually compatible objectives and, in this context, the recently reformed Common Agricultural Policy (CAP) and the EU Water Framework Directive constitute the policy framework in which irrigated agriculture and hence water use will evolve. In fact, one of the measures of the European Water Directive is to establish a water pricing policy for improving water use and attaining a more efficient water allocation. The aim of this research is to investigate the irrigators' responses to these changing policy developments in a self‐managed irrigation district in southern Spain. A stochastic programming model has been developed to estimate farmers' response to the application of water pricing policies in different agricultural policy scenarios when water availability is subject to varying climate conditions and water storage capacity in the district's reservoir. Results show that irrigators are price‐responsive, but a similar water‐pricing policy in different agricultural policy options could have distinct effects on water use, farmers' income, and collected revenue by the water authority. Water availability is a critical factor, and pricing policies are less effective for reducing water consumption in drought years. Thus there is a need to integrate the objectives of water policies within the objectives of the CAP programs to avoid distortion effects and to seek synergy between these two policies.

Kenya, agricultural policy options and the poor: A computable general equilibrium analysis

A computable general equilibrium model is used to analyse the allocative and distributional impact of some agricultural policy options for Kenya. A Kenyan social accounting matrix is employed as a database, and it has been aggregated and disaggregated to accommodate additional data sources and arranged to follow the transaction value approach. Increasing wages to attract more labour into estate agriculture under conditions of monopsony is the preferred policy to increase labour employment and to improve households’ income and consumption, especially that of the poorer segment of society. The economy is either non‐responsive to the impact of indirect tax changes or the changes are quite small. Terms of trade improvements such as increasing world prices of agricultural exports result, in a significant boost of income and GDP, are effective in increasing returns to labour and are an important step in reducing poverty.

Ecological economic modeling and valuation of ecosystems

We are attempting to integrate ecological and economic modeling and analysis in order to improve our understanding of regional systems, assess potential future impacts of various land-use, development, and agricultural policy options, and to better assess the value of ecological systems. Starting with an existing spatially articulated ecosystem model of the Patuxent River drainage basin in Maryland, we are adding modules to endogenize the agricultural components of the system (especially the impacts of agricultural practices and crop choice) and the process of land-use decision making. The integrated model will allow us to evaluate the indirect effects over long time horizons of current policy options. These effects are almost always ignored in partial analyses, although they may be very significant and may reverse many long-held assumptions and policy predictions. This paper is a progress report on this modeling effort, indicating our motivations, ideas, and plans for completion.

Ecologically and economically efficient and sustainable use of agricultural landscapes

Agricultural landscape use serves many purposes and many different people. For this reason, many public and private institutions are involved in the problem of optimal landscape use. In farms and rural family households basic decisions are taken on the intensity of agricultural landscape use. The decision-makers of these private institutions try to adapt optimally to the socio-economic framework. Public institutions play a key role in creating the socio-economic framework by policy-making. Thus, their members determine at least the use of agricultural landscapes and whether the use is ecologically and economically efficient and sustainable or not. To guide landscape use in an optimal direction, however, is a hard task for public decision-makers because nobody knows exactly what an ecologically and economically efficient and sustainable use of agricultural landscapes is. This problem results from unknown values, unknown interrelations between technology and nature, and unknown evolutionary processes in nature and in societies. Thus, there is a broad area for speculation about optimal landscape use. Such speculation, however, can be minimized by analysing options for action systematically. This is demonstrated in the case of an agricultural landscape in Southern Germany. In this case study, eight parts of a naturally homogeneous region are analysed by using multi-criteria valuation, linear programming and trade-off analyses. By combining these methods, the ecological and economical status quo of the uses of an agricultural landscape and possibilities for its improvement are evaluated to find out how the landscape can be used ecologically and economically in the most efficient way. Trade-offs representing a production frontier between the production of marketable and nonmarketable landscape goods are identified. With these findings, efficient agricultural policy options are revealed for the simultaneous achievement of ecological and economic efficiency and sustainability.

An assessment of alternative agricultural policies to reduce nitrogen fertilizer use

The costs associated with using different crop rotation patterns designed to reduce the use of nitrogen fertilizer under alternative agricultural policy options are measured. The policy options considered include those incorporated in the Food Security Act of 1985, a No Farm Program option, a Nitrogen Fertilizer Tax option, a Corn Sales Tax option, and a Limiting Nitrogen Fertilizer Use option. To achieve an objective of reducing the nitrogen available for potential leaching into groundwater, crop rotation patterns associated with limiting nitrogen fertilizer use appear to have the lowest cost to the farmer, while a corn sales tax has the highest cost. The costs are computed based on data from the Iowa State University experiment farm at Kanawha, Iowa.

The effects of alternative policy options designed to reduce nitrogen fertilizer use

The costs associated with using different crop rotation patterns designed to reduce the use of nitrogen fertilizer under alternative agricultural policy options are measured. The policy options considered include those incorporated in the Food Security Act of 1985, a No Farm Program option, a Nitrogen Fertilizer Tax option, a Corn Sales Tax option, and a Limiting Nitrogen Fertilizer Use option. To achieve an objective of reducing the nitrogen available for potential leaching into ground water, crop rotation patterns associated with limiting nitrogen fertilizer use appears to have the lowest cost to the farmer while a corn sales tax has the highest cost. The costs are computed based on data from the Iowa State Universiy experiment farm at Kanawha, Iowa.

Economic environment and agricultural development: The importance of macroeconomic policy

This article explores the ways in which the macroeconomic balance of the economy, and related policies, impinge on agriculture in developing countries, and considers implications for the design of policies. It argues that the extent of macroeconomic balance, and the quality of the policies influencing that balance, to a large extent define the scope for effective agricultural policies. The avoidance of severe balance-of-payments deficits and rapid inflation are seen as a necessary condition for the promotion of agricultural growth. They also have an important influence on the nature and range of agricultural policy options available to governments.