Price Guarantees Research Articles

The UK Energy Price Guarantee

The UK Energy Price Guarantee

Can Trustless Protocols Guarantee Price Stability?

Can Trustless Protocols Guarantee Price Stability?

HPR103 Pricing Negotiations of ASMR IV Drugs in France: Impact of the Latest LEEM-CEPS Framework Agreement

On March 5th, 2021, a new LEEM-CEPS framework agreement was signed for 3 years, setting notably the conditions under which drugs with an ASMR IV can claim a list price consistent with the prices in 4 European markets (Germany, Italy, Spain, United Kingdom). This study aimed at analyzing the impact of this agreement on ASMR IV price, and more particularly whether drugs eligible for the European Price Guarantee have benefited from a consistent French price.

PENGARUH KEMITRAAN KOPERASI SERBA USAHA PERTIWI HIJAU TERHADAP KEBERHASILAN USAHATANI PADI ORGANIK DI KECAMATAN COLOMADU, KABUPATEN KARANGANYAR

Problems faced by Farmers in Colomadu District is about the lack of price guarantees and market guarantees. These problems can be overcome by doing partnerships, with agriculture cooperative, for instance. Partnership is a form of cooperation between farmers and cooperative with the principle of mutual benefit. The aims of this study were (1) to describe the partnership between organic rice farmers and the Pertiwi Hijau Multipurpose Cooperative, and (2) to analyze the effect of the partnership to ward the success of organic rice farming. This research was conducted in January 2022 – February 2022, it located in Colomadu District, Karanganyar Regency. The research method used was the census method. The method of determining respondents was chosen by complete enumeration with the number of respondents of 30 farmers. Methods of data collection were done by interview and observation. The data used were primary data and secondary data. The data analysis method used was descriptive analysis and multiple linear regression analysis. The results showed that the variables of farming assistance, price guarantee, provision of production facilities and capital loans simultaneously had a significant effect toward the success of farming activity. The variables of farming assistance and credit partially had a significant effect on the success of farming activity. Based on the result, it need to revise the agreement on price guarantees and the provision of production facilities in order to improve farmer’s satisfaction.

THE IMPACT OF BROILER FARMING BUSINESS PARTNERSHIP ON PRODUCTION COST AND INCOME IN METRO CITY

Partnership pattern was the pattern of managing broiler chicken business through cooperation with companies that offered many benefits so that most breeders were encouraged to established partnership patterns. But in the implementation of partnerships not always run in accordance with the agreement because there were some frauds committed by farmers and companies. The risk of frauds made some farmers chose to manage the broiler breed chicken business independently. The difference in implementation between partnership patterns and self-sustaining patterns can have a performance impact on broiler chicken breeders. This study aims to analyze the partnership patterns, analyze the partnership's driving factors and analyze the impact of partnerships on the production and income costs of broiler breed chicken farmers in Metro City. This study was conducted from October 12 to November 30, 2020 located in Metro City. The methods were used in this research were qualitative and quantitative combined methods. The data was collected through a survey by interviewing directly 59 respondents. The result of this research were The pattern of partnerships of broiler breed chicken farmers in Metro City was the plasma core pattern, 2) The driving factors of partnership in broiler chicken breeders were capital availability motivation, market guarantee motivation, price guarantee motivation and high income motivation, 3) Statistically the partnership pattern had an impact on income and labor allocation. The company could improve the services that were felt by farmer tobe lacking, such as the accuracy of providing production facillities and payment of harverts and could provide competitive sell prices to breeders partner.

WHY ARE FARMERS WILLING TO JOIN PARTNERSHIPS IN ORGANIC RICE? CASE IN NGAWI ORGANIC CENTER COMMUNITY, EAST JAVA

Organic farming is more profitable because of the increasing demand and high product prices. However, it is not easy for farmers to decide on rice farming organically. Farmers faced obstacles such as limited capital, lack of knowledge about organic technology, and no price guarantee for organic farmers who have not been certified organic. It is necessary to develop some policies such as institutions. A partnership is one of the institution's solutions for farmers to increase their willingness to join organic rice farming. This research was conducted in Ngawi Regency, East Java, from March 2020. Ngawi Organic Center Community (KNOC) is a partner institution with experience in pioneering and fostering organic farmers. The research aims to analyze (1) the factors that influence organic rice farmers for decision-making partnership; (2, the mechanism of organic rice partnership; and (3) the benefits farmers get from the partnership. Logistic Regression used to analyze the factors that influence the farmers' decisions. Descriptive analysis is used to investigate the mechanism of organic rice partnership between organic rice farmers and KNOC. The descriptive analysis also describes the benefits of partnerships received by farmers. The study results show that farming experience, land area and frequency of extension significantly affect farmers' decision making. The organic rice partnership mechanism regulated in a written contract, with the Agribusiness Operational Cooperation partnership pattern. The high price of organic rice is the most profitable partnership benefit for farmers (81,67%).

Public policies of guarantee for minimum prices on products of sociobiodiversity (PGPMBio): composition of the extraction cost of Amazonian chestnut in Rondônia and Acre

Objective: To analyze the Minimum Price Guarantee Policy for Sociobiodiversity Products - PGPMBio with focus on the composition of the extraction cost of the Brazil nut in the states of Rondônia and Acre. Materials and Methods: This work used a qualitative approach through a field study. The Matrix proposed by Easton (1957) enabled an analysis of Public Policy. The field research took place at three different times, with 34 respondents: the first was in Brasiléia -AC) Acre State) in November 2014, in Porto Velho - RO (Rondônia State) in March 2015, in Brasiléia - AC and Cobija - Bolivia in June 2015. Results: It was concluded that there is a discrepancy between the minimum price defined in PGPMBio and the price paid by the market in the cases studied. The results show that PGPMBio does not consider environmental costs in the elaboration of the minimum price, employing economic criteria in a context that requires a sustainable vision. Study limitations: The size of the extractivist sample, which, due to its small quantity, makes it impossible to expand the results for the entire population, being limited to the reality of the interviewees. Practical implications: It is suggested to include bonuses for environmental services in the calculation of the minimum price. Originality: The recognition of the workforce on the extractivism of the Chestnut-of-the-Amazon in the composition of the product's cost. This was possible due to the analysis of production costs of the Chestnut-of-the-Amazon through the methodology of analysis of public policies of Easton (1957) and the simultaneous verification of the applicability of PGPMBio among the extractivists.

Optimal price subsidies under uncertainty

This paper analyzes the effects of three finite-lived subsidies (fixed price, fixed premium, and minimum price guarantee policies) on investment timing and social welfare. We show how these policies can eliminate the under-investment inefficiency when considering a generic demand function with an exogenous multiplicative shock. We highlight the importance of optimally setting subsidy levels depending on the exogenous shock and demand function parameters. We thus analyze these subsidies and the main findings are threefold. First, the optimal premium subsidy is independent of the exogenous shock. Second, the optimal fixed price subsidy is affected only by uncertainty. Lastly, the optimal minimum price guarantee changes with the drift rate and volatility.

Perceived effects of COVID-19 restrictions on smallholder farmers: Evidence from seven lower- and middle-income countries

CONTEXTThe COVID-19 pandemic caused unprecedented global disruption and continues to wreak havoc. Dire predictions were made about the risks to smallholder farmers in lower- and middle- income, but hard data have been lacking. We present the results from 9201 interviews with smallholder farmers from seven countries. OBJECTIVEThe objectives are to describe: i) how farmers perceive the key effects of the COVID-19 pandemic and containment measures on livelihoods and food security; ii) the effects on agricultural activities; iii) the coping strategies households deployed. METHODSHousehold surveys were conducted as part of ongoing monitoring programs during the latter half of 2020. Sites in seven countries were covered: Burundi; Kenya; Rwanda; Tanzania; Uganda; Zambia; and Vietnam. Findings are representative of smallholder farmers across multiple districts per country. RESULTS AND CONCLUSIONSThe effects of the COVID-19 containment measures were widespread and often perceived to be severe. Food purchase, off-farm income, sale of farm produce, and access to crop inputs were all affected. In locations under more stringent restrictions during the time of the survey, up to 80% of households had to reduce food consumption and/or variety. Almost all households with off-farm incomes reported reductions, by half on average. A half to three-quarters of households (depending on the location) with income from farm sales reported losses compared to the pre-pandemic situation. In locations with more relaxed containment measures in place during the time of the survey, less frequent and less severe economic and food security outcomes were perceived by the respondent, with around 20% of households reporting negative outcomes. Mobility restrictions, reduced market access, crashes in sale price for agricultural goods, and soaring prices for food purchase were key factors. Sale prices generally dropped for all agricultural products in any given location, and affected not only high-value perishable products, but also staple crops such as maize and cassava. Depending on the location, between 30% and 90% of the households applied coping strategies in response to the pandemic during 2020. There was an almost complete absence of official aid amongst households interviewed. SIGNIFICANCEOur results raise the thorny issue of how best to balance containment of disease against the wellbeing of the vulnerable rural population in lower- and middle-income countries. There is a risk that the buffering capacity of rural people will become exhausted. Possible policy measures to limit negative outcomes include i) tiered mobility restrictions with travel allowed for economic reasons; ii) short-term price guarantee schemes to stabilise the food system; iii) direct aid; iv) the timely re-installation of distribution channels for agricultural inputs.

Precios de Garantía en México (2019-2020): diseño e implementación de política agrícola

The producers' response to the Guarantee Price Program was analyzed through three complementary approaches: design, results, and producers´ perception. The study shows a deficient design from the construction of the problem tree and the Matrix of Indicators for Results; a low participation of producers, reflected in an idle installed capacity of 69% of the collection centers; and disinterest of the beneficiaries due to causes attributable to the program, such as the distance from the collection centers. This work contributes to the recognition of the initial problems of the policy, and thus to advance in their solution.

Alternative cropping adoption in Thailand: A case study of rice and sugarcane production

This research analyzed farmers' acceptance to switch from rice to sugarcane farming and their support preferences in this regard using choice models. The results showed that farm size, crop conversion experience, sugarcane price, household asset and sugarcane price guarantee significantly influenced the farmers' land-use decisions in this regard. Farmers' concerns over cash flow and ability to access the sugarcane market critically decreased their likelihood to switch to sugarcane production. They were also less inclined to grow sugarcane when climatic conditions and soil fertility were favorable. Loan burden and unclear support policies were also a major hindrance. However, attractive sugarcane price along with price guarantee policy had a positive influence on the farmers’ willingness to cultivate sugarcane. Farmers mostly prioritized sugarcane price guarantees in the first year, followed by low-interest credit support for production costs and harvesting and logistic services. This shows that effective policy solutions to encourage farmers to switch from rice to sugarcane production should incorporate capacity building, improve credit access, and implement price controls, particularly in the early stages of the transition.

Why Does Tobacco Agriculture in Thailand Persist?

The rigorous tobacco controls advocated by both international policy players and national government are foreseen to lowering demand in tobacco consumption, and consequently, the contraction of tobacco agriculture. This paper seeks to reveal why tobacco agriculture, albeit with the declining trend of tobacco farms, continues to persist. Theoretical guiding the investigation is based on the institutional arrangement of contract farming system, the idea that derived from New Institution Economics, and farmers’ striving to attain livelihoods. The study adopts qualitative methods, utilising purposive sampling, with 53 tobacco farmers recruited from four provinces, namely Phrae, Phetchabun, Roi-et and Nongkhai, who took part in four focus group discussions. In addition, in-depth interviews were conducted with two provincial agricultural promotion officers, three provincial excise officers and four staff members of the local office of the Thailand Tobacco Monopoly. The data was analysed using content analysis. This paper found that supportive institutional arrangements, the adaptation of communities and households creating a favourable environment and the emergence of new markets for roll-your-own cigarettes are contributing to the persistence of tobacco agriculture. In light of tobacco control, two policy measures are proposed. First, the regulations for roll-your-own cigarette industries – both smallholders and manufacturers – must be revised and instituted. Second, to encourage tobacco farmers to move away from tobacco growing, institutional support for alternative crops, such as price guarantees, inputs and technical support should be provided in the same manner that the tobacco growers currently receive.

LEGAL REGULATIONS FOR THE USE OF RENEWABLE SOURCES OF ENERGY IN SERBIA AND THE REPUBLIC OF SRPSKA

The paper provides information on renewable energy sources (RES) and legislation related to the RES generated electricity in Serbia and the Republic of Srpska. In Serbia, hydropower, wind energy, solar energy, biomass and biogas are used for the RES generated electricity, whereas hydropower, solar energy, biomass and biogas are utilized in the Republic of Srpska. The paper gives an overview of the power of RES power plants and the percentage share of the thermal power plants and RES power plants in electricity production and the guaranteed (incentive) prices for RES generated electricity in Serbia and the Republic of Srpska. Furthermore, legal regulations related to the production of electricity from RES in Serbia and the Republic of Srpska are given. In the conclusion, it is pointed out that RES is increasingly used in Serbia and the Republic of Srpska for the production of electricity, that there are appropriate legal regulations and guarantees (incentive prices) for electricity generated by RES power plants.

How water consumers form preferences for price guarantees: the roles of historic price variability, trust and risk appetite

ABSTRACT Many water utilities offer price caps to reassure consumers about future prices. Researchers have focused largely on the implication of price caps on total cost of ownership or conservation rather than consumers’ preference for such guarantees. In this paper, we examine consumers’ preferences for price caps. We first consider how consumers form expectations about their water prices, and secondly how they evaluate those expected prices against guarantees. Our empirical investigation, using new survey data, confirms that as variability of historic prices increases, consumers use less historic information to form their expectations, and replace it with more subjective information, such as their perceptions of the water supplier’s investment efficiency and the quality of their water. Further, water consumers who are more motivated to protect themselves, as demonstrated by averting behaviours even when they consider service quality to be good, more strongly prefer a guarantee when past prices have been highly variable.

Economic Sustainability of Small-Scale Hydroelectric Plants on a National Scale—The Italian Case Study

The feasibility of hydroelectric plants depends on a variety of factors: water resource regime, geographical, geological and environmental context, available technology, construction cost, and economic value of the energy produced. Choices for the building or renewal of hydroelectric plants should be based on a forecast of the future trend of these factors at least during the projected lifespan of the system. In focusing on the economic value of the energy produced, this paper examines its influence on the feasibility of hydroelectric plants. This analysis, referred to as the Italian case, is based on three different phases: (i) the economic sustainability of small-scale hydroelectric plants under a minimum price guaranteed to the hydroelectric operator; (ii) an estimate of the incentives for reaching the thresholds of “acceptability” and “bankability” of the investment; (iii) an analysis of the results obtained in the previous phases using a model of the evolution of the electricity price over the 2014–2100 period. With reference to the Italian case, the analysis suggests that, to maintain the attractiveness of the sector, it is necessary to safeguard the access to a minimum guaranteed price. With the current tariff plan, complete sustainability is only achieved for plants with p ≤ 100 kW. For the remaining sizes, investments under current conditions would not be profitable. The extension of minimum guaranteed prices could make new medium-large plants (500–1000 kW) more attractive. The current incentive policy is not effective for the development of plants larger than 250 kW, as systems with lower capital expenditures are preferred. Uncertainty about the evolution of the price of energy over time is a concern for the sector; the use of evolutionary models of technical economic analysis tried to reduce these criticalities, and it was shown that they can be transformed into opportunities. It was also found that profitability due to the growing trend expected for the price of energy cannot be highlighted by a traditional analysis.

Moving towards circular bioeconomy: Managing olive cake supply chain through contracts

Circular bioeconomy represents a recent political vision expected to contribute in tackling the main challenges faced when sustainable industrial transition trajectories are to be implemented. Coordination and interdependence among actors are crucial steps for value creation when developing new sustainable supply chains. Current study is based on a choice experiment devised with contract design theory applied to a specific supply chain in which a circular bioeconomy strategy is implemented. It investigates the propensity of Sicilian millers to participate in a novel supply chain in which feedstuff is produced by processing a by-product, namely olive cake. Furthermore, millers contract attributes’ preferences are analysed. The results from two econometric models reveal that 71% of the interviewed entrepreneurs would participate in the proposed supply chain while the propensity to participate is positively related with firm size and millers’ attitudes but decreases if millers experienced previous investments or have previously participated in cooperatives. Moreover, respondents prefer shorter length of contract, with a minimum guarantee price, with a renegotiation option, and without the obligation of a minimum volume of product to be supplied. Contract agreements, when contract characteristics are designed ad hoc, are proved to be effective tools for circular bioeconomy supply-chain development.

Institutional Systems In Planning And Strategy For Oyster Mushroom Business Development

The development of oyster mushroom business has not been able to meet the increasing consumer demand both in terms of quality and quantity. This happened because of limited funds and application of technology, limited skilled workers, and institutional optimization. Therefore the study aims to analyze: factors that affect the weak coordination function, and Strategic programs in the development of oyster mushroom business. The study was conducted in Enrekang District, South Sulawesi Province. Data were collected by descriptive research through an expert system approach using survey methods. Interpretative Structural Modeling (ISM) used to analyze a strategic program in the development of the oyster mushroom business. The results showed that, Factors causing the weak coordination function in the planning and development of oyster mushroom businesses are Weak formation/training, Institutional disengagement from the start, and Weak Organizing; More strategic programs in planning and developing the oyster mushroom business are Provision/access to capital resources, Oyster Mushroom Price Guarantee, Increasing farmers’ knowledge and skills, and Effectiveness of counseling in the field.

Feed-in Tariff Contract Schemes and Regulatory Uncertainty

This paper presents a novel analysis of two feed-in tariffs (FIT) under market and regulatory uncertainty, namely a sliding premium with cap and floor and a minimum price guarantee. Regulatory uncertainty is modeled with a Poisson process, whereby a jump event may reduce the tariff before the signature of the contract. Using a semi-analytical real options framework, we derive the project value, the optimal investment threshold, and the value of the investment opportunity for these schemes. Taking into consideration the optimal investment threshold, we also compare the two aforementioned FITs with the fixed-price FIT and the fixed-premium FIT, which are policy schemes that have been extensively studied in the literature. Our results show that increasing the likelihood of a jump event lowers the investment threshold for all the schemes; moreover, the investment threshold also decreases when the tariff reduction increases. We also compare the four schemes in terms of the corresponding optimal investment thresholds. For example, we find that the investment threshold of the sliding premium is lower than the minimum price guarantee. This result suggests that the first regime is a better policy than the latter because it accelerates the investment while avoiding excessive earnings to producers.

Preorder Price Guarantee in e-Commerce

Problem definition: With the development of the internet and e-commerce, retailers often offer preorders for new, to-be-released products. To encourage preorders, retailers such as Amazon offer preorder price guarantee (PG). That is, if the product price drops before or on the release date, preorder consumers automatically receive a refund for the difference between the preorder price and the new price. Should retailers offer PG for preorders? If so, how should they decide the prices and inventory level? Academic/practical relevance: Both advance selling and price matching have been observed in practice and studied in literature. However, the combination of these two is a new phenomenon in practice and receives very limited attention in academic. So our study is closely related to both academic and practical communities. Methodology: Dynamic pricing and game theory. Results: We find that, if preorder demand uncertainty is high, a firm should adopt PG in advance selling. If preorder demand uncertainty is low, then a firm should adopt PG if and only if the percentage of high-valuation consumers is high. Furthermore, we find that a firm's optimal profit under PG monotonically increases in preorder demand uncertainty while the firm's optimal profit without PG stays unchanged. That is, PG enables a firm to profit from preorder demand uncertainty. In addition, we show that price commitment is dominated by dynamic pricing when the retailer can optimally decide whether to offer PG under dynamic pricing. We also demonstrate that a retailer should sell in advance if a product's marginal cost is less than a certain threshold, which is higher than the traditional threshold in the advance selling literature without consideration of PG. Managerial implications: Our results provide guidance for retailers on whether or not they should offer PG and how to design the prices under PG.

Art return rates from old master paintings to contemporary art

We study return rates on art investment using a complete dataset on repeated sales for Old Master Paintings, Modern art and Contemporary art auctioned worldwide at Christie's and Sotheby's from 2000 to 2018. We show that return rates do not depend systematically on past prices or the place of sale, but we emphasize substantial differences in returns across sectors. We also control for changes in transaction costs (buyers’ premiums and artists’ resale rights), characteristics of the sale (evening sales, price guarantees and past bought-ins) and news on the lots (changed attributions, public exhibitions or death of the author) that appear reflected in art returns. We confirm the absence of masterpiece effects in American, Chinese and Ethnic art. Finally, using historical data on prices during Renaissance, Baroque and Neoclassical periods, we find evidence that price changes are independent from initial prices also in the long run.