Non-traded Inputs Research Articles

Measuring and Analyzing the Impact of the Agricultural Price Policy on the Production of Barley Crop in Nineveh Governorate - Iraq, using the Policy Analysis Matrix for the Production Season 2022

In this manuscript, an economic analysis was conducted of barley crop farms in Nineveh Governorate - Iraq, for the productive season 2022, through a random sample of barley crop producers in the study area, which included (160) producers out of a total study population of (1606), as the research depend on policy analysis. The price of production inputs and output prices by adopting the Price Analysis Matrix (PAM), which included the prices of traded production inputs and the prices of non-traded productive inputs, as well as the quantities of stored productive inputs and the quantities of non-traded productive inputs, and depending on the private prices and social prices of production requirements, the research reached a group of The most important results are that the return of one dunum at special prices amounted to (188) thousand dinars. As for the return of a dunam at social prices, it amounted to (111) thousand dinars, and the total cost of inputs traded per dunam at special prices was calculated, which amounted to (61) thousand dinars, and the cost of a dunam at social prices amounted to (54) thousand dinars. As for the total cost of non-traded inputs per dunum, by adopting special prices and social prices, they amounted to (91) and (97) thousand dinars, respectively. Based on the conclusions, it was recommended to increase government support for production requirements such as fertilizers and fuel, as well as to develop the efficiency of marketing outlets, as well as to regulate the use of the water resource.

Measuring the Competitiveness of Sugarcane Farming

This study aims to determine the competitiveness of sugarcane farming in Magetan Regency based on measuring the level of competitive advantage, comparative advantage, and impact on government policy. Policy Analysis Matrix (PAM) is used in this research. The result showed that PCR’s value was 0.790 on planting cane and 0.664 on ratoon cane; it is assumed that sugarcane farming has a competitive advantage. While farming also seems to have a comparative advantage since the DRCR planting cane value resulted in 0.950 and 0.772 for ratoon cane. Overall, government policy’s role made sugarcane farming in Magetan Regency attain high competitiveness because the result of NPCO both planting cane and ratoon cane were greater than 1, assuming the government policy on output is protected and profitable for the farmers. Moreover, the value of NPCI planting cane and ratoon cane are 0.603 and 0.643, respectively, indicating the government policy also protects the tradable inputs. However, the policy on non-tradable inputs imposes higher inputs, as the nominal value of TF planting cane is IDR 1,453,706 and TF ratoon cane IDR 1,174,254 for TF ratoon cane. Hence, sugarcane farmers pay non-tradable inputs higher than the social price.

Daya Saing Usahatani Jagung Hibrida di Kabupaten Muna Barat

The purpose of this study was to analyze the competitiveness of hybrid maize farming in Muna Barat Regency. Data collection was carried out in May - July 2021. The population in this study were all 415 hybrid corn farmers in Muna Barat Regency. Determination of the sample is done by using the cluster random sampling method, where the population is grouped by region, then the sample is selected randomly. Determination of the number of samples using the Slovin formula so that the number of samples obtained is 64 people. The data collected includes: the use of tradable inputs (fertilizers, pesticides, fuels, production machinery) and non-tradable inputs (land area, seeds, labor and production equipment) and outputs (production and selling prices). The data collection technique used is an interview using a questionnaire or a question guide. Analysis of the data used is the Policy Analysis Matrix (PAM). The results of the study show that hybrid corn farming in West Muna Regency has a competitive advantage, both based on indicators of competitive advantage with a PCR value of 0.29; or based on indicators of comparative advantage with a DRCR value of 0.07.Keywords: competitiveness; hybrid corn; Policy Analysis Matrix (PAM)

A model of diversification and growth in open developing economies

We build and calibrate the model of an artificial economy that resembles the situation of developing countries with small domestic markets: they are far from the world technological frontier, and they have a comparative advantage in one or a few primary commodities. Their growth is by imitation and addition of goods not previously produced, rather than by innovation or productivity growth in existing sectors. Starting new sectors from scratch is hampered by two market failures. In the first place, entrepreneurs must be willing to invest in discovering production technologies abroad and adapting them to local conditions. This process has information externalities: the “pioneers” have to undertake investments in information that can easily be copied by others who have not made the investment (“copycats”). In turn, the latter are essential for the scaling up of production in new sectors. Second, there is a coordination problem. Success in establishing new industries is dependent on the availability of non-tradable inputs (“infrastructure”) serving not only the good in question but several other goods that use a similar set of non-tradable inputs. We call “families” the sectors that use the same infrastructure. The model introduces a fiscal sector, with a planner who seeks to maximize growth. We simulate a large number of combinations of tax rates on the traditional sector and on pioneers and copycats, spending on subsidizing information search, and options for building sector-specific infrastructure. The objective is to find the combinations of policies that maximize growth. After calibrating the model and obtaining two scenarios that maximize growth, one without and one with productivity growth, we compare them to the growth trajectories of South Korea and Chile. We also describe the growth policies of Korea, Taiwan, Singapore and Chile, and contrast them to the key features of the model.

Analisis daya saing ubi jalar di kabupaten Karanganyar

Sweet potato is a food crop that is easily found and easy to cultivate, can be used as a substitute good for rice and maize. This study aims to determine the competitive and comparative advantages of sweet potato farming and to analyze government policies and their relation to the competitiveness of sweet potato farming in the Karanganyar district. The data analysis method used is the Policy Analysis Matrix (PAM) method. The determination of the sample areas was carried out deliberately in the Tawangmangu, Ngargoyoso, and Jumantono Districts, Karanganyar Regency. The respondents were 60 farmers. The results showed that the private profit was IDR 22,459,017.68 and a PCR value of 0.49, then the social benefit is IDR 71,826,979.74 and a DRCR value of 0.23 which means that the sweet potato commodity also has a competitive and comparative advantage. The output policy parameter consists of an output transfer of –IDR 49,894,031.87 and an NPCO ratio of 0.48, which means output policy has not been effective, indicated by the low domestic sweet potato price. The Input policy parameters consist of an Input transfer value of –IDR 804,269.45, an NPCI ratio of 0.54, and a factor transfer value of IDR 278,199.64, which means Input policy has protection from the government, fertilizer subsidies, and non-tradeable Inputs subject to land tax. The Input-output policy parameters consist of a net transfer of IDR 49,367,962.06, an EPC value of 0.48, and an SRP value of -0.52, which means the Input-output policy has not been provided economic incentives, as a result, farmers spend higher production costs.

Competitive and comparative advantages analysis of organic rice farming in Sumberjambe sub-district Jember regency

Organic rice agriculture in Jember Regency was first developed in Rowosari Village, Sumberjambe Sub-district in 2012, by “Tani Jaya 2” Farmer Group. The purpose of this research was to analyze the comparative and competitive advantages of organic rice farming in Sumberjambe Sub-District, Jember Regency, as well as the impact of government policies on organic rice farming. A purposive sampling method was carried out during this research and the members of “Tani Jaya 2” Farmer Group, Rowosari Village, Sumberjambe Sub-district, which runs organic rice farming was the sample of it. The analysis method used in this research was PAM (Policy Analysis Matrix). The results show that organic red rice farming in Sumberjambe Sub-district, Jember Regency had a comparative and competitive advantages which indicate by the organic rice farming competitiveness. The results of PAM analysis show that the policy impact on the output of organic rice farming had a positive impact on organic red rice farming, and the impact of tradable input policies had a negative impact on organic red rice farming. It can be concluded that the government policies on tradable input and output, while non-tradable inputs gave a positive impact on organic red rice farming in Sumberjambe Sub-district.

Analysis of Soybean Competitiveness in Landawe Sub-District North Konawe District

This study aims to analyze the competitiveness of soybean farming in Landawe District, North Konawe Regency. The study was conducted in December 2019. The population in the study were all soybean farmers, amounting to 49 people. Determination of the sample using the census method. Types and sources of data in the study include primary data and secondary data. Data collection techniques used in research are direct interviews with respondents and literature studies. Variables in the study include revenue, tradable inputs, non-tradable inputs, production, private prices, and social prices. Analysis of the data used is the Policy Analysis Matrix (PAM). The results showed that soybean farming in Landawe Subdistrict, North Konawe District has competitive competitiveness, which is the value of the ratio of private costs (Private Cost Ratio) of 0.30 smaller than one, which means that to produce a product requires a smaller additional cost. However, it does not have comparative competitiveness because the value of the ratio of domestic resource cost ratio is greater than one, namely 5.07 which means inefficient farming

THE IMPACT OF GOVERNMENT POLICIES ON COMPETITIVENESS OF RICE FARMING IN PURBALINGGA REGENCY

Rice is a potential food crop to be developed in Purbalingga Regency, so it is necessary to know its competitiveness so that rice production can be increased. This study aims to (1) determine the competitiveness of rice farming in Purbalingga Regency, and (2) determine the impact of government policies on rice farming in Purbalingga Regency. It used the Policy Analysis Matrix (PAM) as the research method. The research sample was purposively selected from Bukateja Subdistrict because it is the region with the highest rice production in Purbalingga Regency. It used the data of rice farming collected in two seasons, such as MT I (rainy season) and MT II (dry season) with a total sample of 80 rice farmers. The analysis showed that rice farming in Purbalingga Regency in MT I (rainy season) and MT II (dry season) had good level of competitiveness because they had competitive advantages and comparative advantages. The impact of government policies on rice farming output and input for both tradeable and non-tradeable inputs are significant. The government also has applied protective rice farming input-output policy. Based on this research, it is suggested that there is subsidy to improve irrigation networks and subsidy to purchase of modern inputs (agricultural machinery) to increase rice productivity and raise the competitiveness of rice farming in Purbalingga Regency as well as the government needs to maintaining the rice import tariff policy, determining the basic price of rice, and providing input subsidies such as chemical fertilizer.

Daya Saing dan Dampak Kebijakan Pemerintah terhadap Usahatani Padi Sri di Kecamatan Rogojampi Kabupaten Banyuwangi

The SRI method is one approach in rice cultivation practices that emphasizes the management of land, plants and water through group empowerment and local wisdom based on environmentally friendly activities. One method of rice cultivation which was developed in Banyuwangi Regency in 2012 was System of Rice Intensification (SRI) method. One area in Banyuwangi Regency that has succeeded in developing the SRI method of rice farming is Watukebo Village in Rogojampi District. The purpose of this reserach was to determine the competitiveness and the impact of government policies on SRI rice farming in Watukebo Village, Rogojampi District, Banyuwangi Regency. The analytical method used was the Policy Analysis Matrix method, which is by calculating tradable input costs, nontradable input costs, revenue, and profits of the private price and the social price of SRI rice farming. The research sample were rice farmers who applied the SRI method which have joined in Sumber Urip Farmer Group. The results of the analysis show that the SRI method has a competitive advantage and comparative advantage. Government policies on tradable inputs and tradable output have a positive impact on SRI method, and together with the government policies on tradable inputs-output and non-tradable inputs have a positive impact on the SRI rice farming method.

Accounting for real exchange rates using micro-data

The classical dichotomy predicts that all of the time-series variance in the aggregate real exchange rate is accounted for by non-traded goods in the consumer price index (CPI) basket because traded goods obey the Law of One Price. In stark contrast, Engel (1999) claimed the opposite: that traded goods accounted for all of the variance. Using micro-data and recognizing that final good prices include both the cost of the goods themselves and local, non-traded inputs into retail such as labor and retail space, our work re-establishes the conceptual value of the classical dichotomy. We also carefully show the role of aggregation, consumption expenditure weighting and assignment of covariance terms in the differences between our findings and those of Engel.

The policy analysis matrix of pulse crops production in Bangladesh

This study examined the relative efficiency of producing of selected pulse crops in Bangladesh and their comparative advantage in international trade. To know the comparative advantage in production of selected pulse crops. The study have calculated net financial and economic profitability, nominal protection coefficient of output (NPCO), nominal protection coefficient of input (NPCI), effective protection co-efficient (EPC), private cost ratio (PCR), policy analysis matrix (PAM) and domestic resource cost (DRC). Data used in this study were collected through Household surveys from 300 sample farms located in 12 villages under 6 districts in Bangladesh for the period 2015 to 2016. The selected pulse crops i.e lentil, chickpea and mungbean cultivation at farm level is very much remunerative to its growers. The domestic-border price ratio of selected pulse crops indicates that domestic pulse production was taxed and consumers were subsidized. The border price of selected pulse crops at producer level was mostly higher than the domestic producer price indicating that there is a wide scope to cultivate pulse crops for import substitution in Bangladesh. Policy Analysis Matrix for selected pulse crops under import parity prices showed that revenue transfer (Tk -14,755/mt) was negative indicated that government policies affect negatively to the pulse producer. The input transfer (Tk -1108/mt) was also negative indicating that the government has implemented input subsidy policy to the crop sector to offset higher cost of production. The domestic factor transfer was positive (Tk 15,171/mt) indicating that opportunity costs of non-tradable inputs were lower than their market prices. Finally the net profit/net policy transfer (Tk -28,503/mt) was negative which means that, the producers earn less profit and cannot minimize loss under existing condition and vice-versa. This means that under free trade, producers could make more profit in contrast to the existing policy environment. The NPCO values less than one imply that policies do not provide nominal protection for the pulse producers. The findings based on the indicators of NPCO, NPCI, EPC and PCR conclude that the existing government policy environment tends to protect the interest of the pulse producers in agricultural sector at production level. DRC results indicated that Bangladesh had comparative advantage of producing pulse crops and production of pulse crops would be highly efficient for import substitution.Bangladesh J. Agril. Res. 43(1): 109-123, March 2018

Understanding Post‐Euro Law‐of‐One‐Price Deviations

We put together a unique panel of thousands of good‐level prices before and after the euro to compare the determinants and understand the evolution of goods price dispersion across Europe over time. We find that tradeability and nontraded inputs play a significantly smaller role for cross‐country price dispersion after the adoption of the euro, and for Eurozone economies as compared to European Union ones. We then compare the distributions of law‐of‐one‐price (LOP) deviations over time to understand how the degree of integration across European economies changed after the euro. Our tests reveal that the distributions after the euro are typically significantly different from those before, consistent with a greater degree of integration. Utilizing our unique panel data set to trace the location of individual goods in the distribution of LOP deviations, we ask how the price advantage or disadvantage evident in these price distributions evolves over time, and whether goods characteristics play a role for the persistence of these LOP deviations. LOP deviations for these goods are highly correlated over 5‐ or 10‐ year horizons, and correlations remain significantly high over longer horizons. These correlations are greater for homogeneous as compared to differentiated goods and vary across countries. Finally, for most of these European economies and goods, price advantage is typically revealed to be more persistent than price disadvantage.

Distribution capital and the short- and long-run import demand elasticity

The elasticity of substitution between home and foreign goods is one of the most important parameters in international economics. The international macro literature, which is primarily concerned with short-run business cycle fluctuations, assigns a low value to this parameter. The international trade literature, which is more concerned with long-run changes in trade flows following a change in relative prices, assigns a high value to this parameter. This paper constructs a model where this discrepancy between the short- and long-run elasticities is due to frictions in distribution. Goods need to be combined with a local non-traded input, distribution capital, which is good specific. Home and foreign goods may be close substitutes, but if distribution capital is slow to adjust then agents cannot shift their consumption in the short run following a change in relative prices, and home and foreign goods appear as poor substitutes in the short run. In the long run this distribution capital can be reallocated, and agents can shift their purchases following a change in relative prices. Thus the observed substitutability gets larger as time passes.

PENGEMBANGAN AGRIBISNIS CABAI MERAH (Capsicum annuum L) DI KABUPATEN MAGELANG

One of major commodity of horticulture in Central Java Province is chili (Capsicum annuum L). As a central area for agribusiness of Chili, Magelang needs the development to stimulate investment growth potential by involving all regional agribusiness, government, farmers/ agribusiness and private groups to work together in an integrated. This study aims to (1) Determine the feasibility of chilli farm; (2) Knowing the comparative advantage of the chili farm; and (3) Formulate developing agribusiness of Chili. This research uses descriptive analytical method. On farm analysis, quantitative data are converted and tabulated in the same unit. To determine the feasibility of Chili farm used analysis of R/C ratio. The greater the value of R/C ratio was more viable farm. Determination of comparative advantage of Chili is analyzed by the Policy Analysis Matrix (PAM). PAM results show the individual and collective effects of price and factor policies. Furthermore, this method can analyze the comparative advantage of a commodity. The result showed that Agribusiness of Chili is profitable both the private and social, and there are no disadvantage caused by the activities of Chili agribusiness. Thus agribusiness of chili can be further developed. The nontradeable inputs of chili farming have been used efficiently and provide added value for farmers. Domestic demand of chili is more profitable supplied by domestic production rather than imports. Farmers receive chili prices lower than it should and not get product price protection. Farmers pay the nontradeable input lower than it should. As for the tradeable inputs, farmers pay higher than it should. It can be concluded that the chili agribusiness has not received adequate protection.

MEASURING TRADE COSTS FROM RELATIVE PRICES: THE ROLE OF LOCATION AND GOODS CHARACTERISTICS

This paper estimates the trade costs from international relative prices, and studies the economic determinants of implied trade costs. We find that the magnitude of trade costs depends on the characteristics of both the type of good and set of locations under examination. In particular, it is found that higher non-traded input share and trade barriers, and lower tradability of goods lead to a larger trade cost, as does a lower proximity of geographic distance between locations.

Measuring Arbitrage Costs from Relative Prices: Implications for the PPP Puzzle

This paper estimates the arbitrage costs from international relative prices, and studies the economic determinants of implied arbitrage costs. We find that the magnitude of arbitrage costs depends on the characteristics of both the type of good and set of locations under examination. More specifically, higher share of non-traded input and lower tradability of good lead to larger arbitrage cost, as does a lower proximity of geographic distance between locations. The role of location-specific characteristic in accounting for the arbitrage cost is more significant as we move beyond an economic geography, while good-specific characteristics matter relatively more if we move to the interior of this geography. We also show that arbitrage cost plays an important role in explaining the puzzling behavior of real exchange rate. We view our evidence as complementary to those that emphasize the role of nominal price rigidities.

Absorbing a windfall of foreign exchange: Dutch disease dynamics

The permanent income rule is seldom the optimal response to a windfall of foreign exchange, such as that from a resource discovery. Absorptive capacity constraints require domestic investment, and investment in structures requires non-traded inputs the supply of which is constrained by the initial capital stock. This, particularly when combined with intra-sectoral capital immobility, delays adjustment and creates short run ‘Dutch disease’ symptoms as the real exchange rate sharply appreciates and overshoots its long run value. Optimal revenue management requires investing in the domestic non-traded goods sector and a slow build up of consumption. Accumulation of foreign assets adjusts to accommodate the time-paths of domestic consumption and investment.

Distribution Capital and the Short- and Long-Run Import Demand Elasticity

International business-cycle models assume that home and foreign goods are poor substitutes. International trade models assume they are close substitutes. This paper constructs a model where this discrepancy is due to frictions in distribution. Imports need to be combined with a local non-traded input, distribution capital, which is slow to adjust. As a result, imported and domestic goods appear as poor substitutes in the short run. In the long run this non-traded input can be reallocated, and quantities can shift following a change in relative prices. Thus the observed substitutability between home and foreign goods gets larger as time passes.

Sustainability of Post-Eruption Socio Economic Recovery for the Community on Mount Merapi Slope through Horticulture Agribusiness Region Development (Case Study in Boyolali District)

Merapi eruption occurred in 2010 resulted in damage to a variety of community-owned assets on the Mount Merapi slope. Paralysis of profitable activity, further exacerbate the socio-economic conditions. Therefore, it is necessary to recover socio economic condition by optimizing the potential resources in there. One of them is the development of the horticulture agribusiness region. Agribusiness development of horticultural crop's purposes are to (1) stimulate the growth of geographical investment potential by involving all actors of agribusiness, government, farmers/agribusiness and private groups, (2) formulate a mutual work program between the groups in the central areas of agribusiness with other relevant parties on the joint development of a regional, integrated and sustainable. The study aimed to (1) determine the comparative advantage of selected horticultural commodities in Boyolali, (2) formulate the development effort selected commodities.Determination of commodities was conducted in stages, namely (1) the selection of candidates for local commodities through field observation and consultation with the Ministry of Agriculture, (2) the determination of selected commodities by the Policy Analysis Matrix (PAM). The method was used to analyze the comparative advantage of a commodity in terms of the resources used to produce these commodities, the resulting output, the prevailing economic policies and market distortions that occur.Carrot and chili have comparative advantage and can be developed further to secure the future of community on Mount Merapi slope. The non-tradeable inputs have been used efficiently and give added value to the farmers.Domestic demand of carrot and chili were more profitable provided by domestic production rather than import.Farmers received prices of carrot and chili lower than they should. Carrot and chili farmers did not get product price protection. Both carrot and chili farming have not received adequate protection.

Distribution Capital and the Short- and Long-Run Import Demand Elasticity

International business-cycle models assume that home and foreign goods are poor substitutes. International trade models assume they are close substitutes. This paper constructs a model where this discrepancy is due to frictions in distribution. Imports need to be combined with a local non-traded input, distribution capital, which is slow to adjust. As a result, imported and domestic goods appear as poor substitutes in the short run. In the long run this non-traded input can be reallocated, and quantities can shift following a change in relative prices. Thus the observed substitutability between home and foreign goods gets larger as time passes.