Output Prices Research Articles

Rental and sale prices of agricultural lands under spatial competition

Much of the land economics literature has largely ignored the spatial nature of competition and related differences between farmland rental and sales markets when assessing return rates from farming, the capitalization of agricultural, environmental and energy policy into land values, and climate change impacts. We propose a model for price formation in both markets under a spatial competition framework. We demonstrate that price formation differs, particularly under policy-induced output price shocks.We suggest that using the rent-price ratio as an approximation for expectations in the net returns of farming, based on the net present value model, may produce biased results. In consequence, studies relying on land prices need to control for local land competition, farming structure, and policies.

Rural Poultry Farming: Leveraging Higher Poultry Input Costs to Grow Zambia’s Indigenous Chicken Sector

(a) Introduction: Zambia’s poultry industry comprises commercial chickens and small-scale producers of indigenous chickens (Gallus domesticus) (ICs). Large, integrated entities run the commercial chicken sector, while the indigenous chicken sector (IC sector) is predominantly run by small-scale farmers (SSFs). Increased costs and low access to formal markets for commercial chickens have motivated SSFs to enter the IC sector under the free-range system (FRS) and semi-intensive system (SIS). (b) Objective: This study aimed to highlight the price changes in poultry inputs and outputs and demonstrate that the IC sector has more potential to contribute to farm income than commercial chickens under family poultry production systems. (c) Method: We analysed the prices for inputs and outputs for Zambia’s poultry industry for the first quarter of 2016 to 2023 using data from the Poultry Association of Zambia (PAZ). We also analysed data from the 2021 Qualtrics survey to investigate the crops grown and crops used as feed and feed ingredients, the sources of feed, and the use of minerals and vitamins by SSFs for chickens. The gross profit (GP) and benefit–cost ratio (BCR) were analysed to compare the viability and profitability of ICs and broilers under SSFs. (d) Results: Our study shows that prices for day-old chicks (DOCs) and point-of-lay (POL) pullets increased by 57–125%, broiler and layer feeds increased by 67–96%, and soybean meal (SBM) and fishmeal rose by 143–229%. Prices for live ICs, commercial broilers, and ex-layers increased by 150%, 79%, and 71%, respectively. Egg prices rose by 100–124%. Farmers tried to look for local feed sources. Over 21% of the crops grown was maize, and nearly 43% was used for feed. (e) Conclusion: Our analysis and comparison between the ICs and broilers demonstrated that SSFs could achieve more farm income by producing ICs than commercial broilers.

DAYA SAING PRODUKSI BAWANG MERAH VARIETAS LOKAL RUBARU PASCA KEBIJAKAN SUBSIDI PUPUK 2022

The government has issued a new policy regarding subsidized fertilizer regulated in Minister of Agriculture Regulation Number 10 of 2022. This causes the production costs borne by Rubaru Shallot farmers to be higher because the government subsidizes only two types of fertilizer. This condition can cause the competitiveness of shallots to decrease. This research aims to analyze the impact of changes in the fertilizer subsidy policy in 2022 on the Rubaru Local Variety Red Onion farming and its competitive and comparative advantages. The research location was determined purposively in Mandala Village. The total research sample was 42 people taken using the purposive sampling method. The data type used is primary data, which includes input prices, output prices, and profits in the form of market and social prices. Data analysis uses the Policy Analysis Matrix (PAM) model. The results of the analysis and discussion show that in general, the impact of the 2022 fertilizer subsidy change policy will still benefit farmers because even though the intervention reduces the profits obtained. Other results show that after these policy changes, the Rubaru Variety Shallot Farming in Mandala Village still has competitive and comparative competitiveness.

How does output price risk influence agricultural energy consumption? Evidence from China’s lychee market

ABSTRACT Agricultural price risk plays a critical role in shaping farmer behaviours. However, existing studies offer little evidence of how output price risk influences energy-related behaviours in agricultural production. In this study, we investigate the impact of output price risk on agricultural energy consumption by leveraging nationally representative data of lychee farmers with daily prices across the supply chain in China. Our findings robustly demonstrate that an increase in output price risk positively affects agricultural households’ energy expenditures. Additionally, we find that the effects of output price risk are more salient among samples of diesel consumption, small-scale households, and less-educated households. Furthermore, the mechanism analysis documents that output price risk significantly increases the likelihood of participating in the non-farm occupation, as well as adopting energy-powered production technologies and productive fixed assets.

The Collaborative Role of Non-Synthetic Fertilizers on Production of Faba Bean (Vicia faba L.) in Ethiopia's Central Highlands, Ejere District

This study sought to determine how non-synthetic fertilizers collaborated to produce faba bean in the 2019–20 and 2021–2022 cropping seasons in agricultural settings in the Ethiopian district of Ejere. The treatments were laid out in a randomized complete block design with three replications. The collected data were subjected to analysis of variance by SAS statistical platform version 9.3. Means were compared with the Least Significance Difference (LSD) at a 5% probability level. To compute the economic advantage of the intervention, farm get prices of inputs and outputs were considered and marginal rate of return (% MRR) was work out for each treatment, and values ≥100 was set as profitable in absolute terms. The mean outcome of the two years’ worth of data analysis showed that there was substantial (p ≤ 0.05) difference in all parameters among the treatments at Ejere. At Ejere, the treatments (FB-17 + 0.76 ton ha-1 VC), (FB-17+ 0.57 ton ha-1 VC), (0.76 ton ha-1 VC) and (FB-17+ 0.38 ton ha-1 VC) yielded the highest mean GYs (3582kg ha-1), (3535kg ha-1), (3430 kg ha-1) and (3234 kg ha-1), respectively. However, the results of the partial budget analysis showed that the treatments (FB-17) and (FB-17 + 0.57 ton ha-1 VC) had the greater marginal rates of return 7218% and 1148%, respectively. These treatments are thought to be very good candidates for more testing in farmers' fields across various aggro-ecologies in order to determine which ones are the best substitute non-synthetic fertilizers for faba bean production in Ethiopia's Nitisol zones.

Productivity and vulnerability of microcredit borrowers in microfinance: an approach using non-separability models

The aim of this paper is to find a better match between the supply of and demand for solidarity microcredit with a view to reducing the level of precariousness and vulnerability of micro-entrepreneurs. If microcredit can constitute a necessary production factor for the activity of micro-entrepreneurs, then the deployment of MFIs in developing countries to facilitate access to microfinance services for low-income agents is desirable. However, the effectiveness of such a factor requires a good analysis of the cash flow needs of micro-entrepreneurs (households) in precarious situations, which would enable financial products to be adapted. Two main lessons can be drawn from a theoretical model: (1) demand for microcredit depends not only on the cost of the service, but also on the price of the micro-entrepreneur's output, the price of labour input and the size of the business. And, although they have this labour input, micro-entrepreneurs suffer from a lack of financial means to exploit it in order to benefit from it and improve their living conditions. (2) solidarity microcredit can have a positive impact on household cash flow, improve the smoothing of their consumption and, to a certain extent, strengthen their resistance to economic shocks.

Riders on the storm: How do firms navigate production and market conditions amid El Niño?

This paper investigates how heavy rainfalls resulting from the 2002–03 El Niño climate pattern affect Ecuadorian firms' production and market conditions. We show that affected firms' revenue productivity (TFP-R) and markups decrease. This is due to production efficiency losses (TFP-Q) and higher marginal costs of initially less efficient firms. Decreased product output prices in response to lower product demand explain the impact on initially more efficient firms. However, the shock neither affects market shares nor survival rates of initially less efficient firms. Consequently, the productivity distribution of Ecuador's industry is not affected by the shock. We also show a swift recovery of production and market demand in the immediate aftermath of the shock. Impacts in 2002–03 are like those of the 1997–98 rainfall shock. Differentiating firms by their TFP-R rather than their production efficiency indicates firms with better (worse) market positions can mitigate the negative impacts of the shock more (less).

Hydrogen Production from Natural Gas Using Hot Blast Furnace Slag: Techno-economic Analysis and CFD Modeling

A process for thermal decomposition of methane to hydrogen and solid carbon is presented and examined. It utilizes the high-temperature heat from the slag by-product of blast furnace ironmaking to drive a thermal decomposition reaction, making it a waste-heat-to-hydrogen technology. This is accomplished via dry granulation of molten slag that feeds a fluidized bed reactor to effect methane–slag contact. First, the proposed process and the heat and mass balances are presented. It is found that it could produce an amount of hydrogen that is equivalent to about 20% of the reductant, depending on the iron-to-slag ratio. Then, a techno-economic analysis investigates the capital and operating costs of the process, compares the hydrogen production cost to that of other processes, and examines cost sensitivity to the prices of process inputs and outputs. This analysis suggests that the process would be suitable for on-site hydrogen production and use within a plant. In addition, using the hot slag to drive the methane decomposition would reduce hydrogen production cost by 15% compared to combusting a portion of the natural gas itself. Finally, a computational fluid dynamics (CFD) modeling study of the fluidized bed reactor examines the thermal decomposition of methane and its dependence on reaction kinetics as well as reactor design and operation. The bed operated in the bubbling regime at an average temperature between 1020 and 1060 °C and resulted in as high as 82% conversion of the methane to hydrogen, with additional optimization still possible.Graphical

Analysis of Economic Efficiency: Case of Sweet Potato Seed Vine Production in Homabay County, Kenya

Sweet potatoes are not only a nutritious, high value food for the daily diet, but also an important source of income. In the selected survey areas in the Lake Region of Kenya, sweet potato is amongst the major commercially grown crops. Therefore, in order to understand the profitability and performance of sweet potato producers in the study area, this study was implemented. Sweet potato is one of the main commercially produced crops in the selected survey areas in the lake region of Kenya. Therefore, this study was conducted to understand the profitability and performance of sweet potato producers in the study areas. The study employed Cost Function in the analyses of Economic Efficiency of Sweet Potato Seed Vine Production system in Kenya. A multi-stage random sampling technique was used to select sample size of 150 sweet potato vine producers for this study. By use of a structured questionnaire, data was collected on production input, output, input and output prices, characteristics of sampled farmer and plot. Using the maximum likelihood method, the variables of the cost function were estimated. Result revealed that the farm level cost- efficiency was about 56 percent. The research has shown that age and farm size were negative but significantly related to cost-efficiency at ten and one percent respectively. Gender, farming experience, Education, access extension to and credit were positive but significantly associated with cost-efficiency at one percent. The study advocates for policy decision that youthful farmers be inspired to venture into SP vine production and the government to enhance access to education, credit and extension services the ongoing farming.

Chinese Import Competition and Prices: Evidence from India*

How do output prices respond to trade shocks? Using detailed firm‐product level data on sales and quantity between 1996 and 2007, we study the causal effect of Chinese import competition on prices for Indian manufacturing firms. We find that Chinese import competition induces a significant decline in firm‐product prices. A 1 percentage point increase in the Chinese import penetration ratio reduces firm‐product prices by 3.5%. Further, this decline in prices is driven by a decline in markup, conditional on costs, as opposed to the pass through of cost savings to prices – providing evidence for pro‐competitive effect. This decline in prices and markup is less pronounced for firms owned by Business Groups compared to stand‐alone, privately owned firms. We also document a large decrease in marginal costs and an increase in markup with no significant effect on prices for firms on account of increased access to imported Chinese inputs.

Trends in Input-Output Relation and Structural Changes in Input Cost of Major Crops in West Bengal

"The structural change of input cost refers to the change in the intensity of labour and capital (seed, fertilizers, pesticides, machineries etc.) used in agriculture. An attempt has been made to analyse the structural changes of input cost along with the trends in input-output relation of the three major crops (paddy, jute and potato) in West Bengal during 1999-00 to 2019-20 by using data of the Cost of Cultivation of Principal crops in India, Directorate of Economics & Statistics (DES), Ministry of Agriculture and Farmers Welfare, Government of India. It is found that the structural intensity of input cost shifts towards a more capital-intensive direction during 1999-00 to 2009-10, but then the situation is reversed to more labourintensive in terms of input cost during 2009-10 to 2019-20. To investigate the reasons, the study found that the higher labour cost is the main reason for this. Though the physical unit of labour per hectare decreased during the second phase (2009-10 to 2019-20), the high wage rate increased the share of labour cost and the total cost of cultivation. In the trend of the input-output relation of the state’s agricultural production, the study observed a decline in the input-output ratio (profitability from cultivation) for the crop paddy and jute, but it increased for the potato. The higher growth of input cost over output price during reference periods is the main reason for the decline in profitability of the crops in West Bengal."

How distortive are turnover taxes? Evidence from China

We investigate the impact of tax cascading on upstream and downstream firms. As a natural experiment, we explore a reform that replaced turnover taxes with value-added taxes for service industries in China, which effectively removed tax cascading. We find a relative increase in sales, R&D investment, and employment for affected service firms. These changes are mainly driven by increased outsourcing from manufacturing firms, and are unlikely to be caused by changes in firms’ tax burden or output prices. Our study provides new evidence on how taxation affects supplier networks and firm performance.

Input costs’ pass-through to output prices: a cross-country empirical analysis

ABSTRACT This article decodes the pass-through behaviour from input prices to output prices, which is a key component in assessing second-order effects of cost-push pressures. Using panel GMM model, this paper has tried to empirically test the degree of pass-through of Purchasing Managers Index (PMI) input prices to output prices in a cross-country framework for 28 countries for the period 2011–2023. Empirical results support modest pass through with the sensitivity of output prices to input prices being lower for advanced nations and inflation targeting countries and higher for manufacturing sector with signs of non-linearity.

Endogenous system-wide output prices in incentive regulation

We propose a simplification of frontier-based regulation currently implemented in several countries and demonstrate its potential application to the regulation of the Brazilian electricity transmission sector. A common regulation uses Data Envelopment Analysis (DEA) to estimate a cost function and mandates that firms adjust their costs to the DEA-estimated best-practice costs. Nevertheless, as DEA allows for individualized pricing of the services, such a DEA-based regulation may be challenging to understand and predict. Moreover, it may encourage strategic behavior in the selection of service profiles, thereby reducing competitive pressure on other firms with similar profiles. This could adversely affect the industry structure, leading to firms with suboptimal scales and scope. Therefore, instead of individualized output prices, we propose the use of a common set of endogenously determined prices that minimizes the total costs to end consumers, while ensuring individual rationality and incentive compatibility. We also present an extended approach that enables the regulator to strike a balance between rewarding well-performing agents and encouraging underperforming agents to save costs, while maintaining a minimal deviation from an expected aggregated payment. Achieving this balance is vital for incentivizing the agents to innovate and invest in more sustainable facilities in the electricity sector, promoting advancements in technology, energy efficiency, and environmental sustainability. Using Brazilian data, we demonstrate that the proposed incentive mechanism is operational and offers substantial advantages over the existing regulatory framework.

The impact of carbon policy news on the national energy industry

This paper explores the impact of unexpected changes in European carbon policy on Portugal’s energy sector, focusing on effects on sales, output prices, and labor market dynamics. Using a structural vector autoregression (SVAR) model, the study finds that news of tighter carbon regulations leads to a significant short-term increase in domestic sales. Output prices rise in both home and foreign markets, with a larger increase observed in the latter. The labor market responds positively, as evidenced by higher wages and hours worked. The study also reveals that these carbon policy changes have played a significant role in historical fluctuations within the energy sector, especially during the Great Financial Crisis and key policy changes. The findings highlight the importance of judicious policymaking concerning carbon regulations, as the escalation in energy prices wields significant economic effects, though not all of these effects are bad from the energy industry standpoint.

Profit analysis of native chicken farming business in Kakas District, Regency of Minahasa, Indonesia

The study aims to determine the profit of farmers from native chicken farming businesses and some influencing factors in Kakas District, Minahasa Regency, North Sulawesi Province. The research site was in Kayuwatu Village and Tounelet Village, Kakas District. The sample of this research was selected purposively, while the data collection technique was conducted in April – May 2023. Further, the study employed a survey method with interview techniques for 60 farmers, using a list of questions. The obtained data was tabulated and analyzed to obtain the total profit. Then, the data were analyzed using the unit output price of profit function (UOP-PF) technique with a regression analysis model. The results of the study show that the total profit from selling native chickens which was an average of 68 chickens per farmer was IDR 2,742,127.60 per year. Based on multiple regression analysis, the coefficient of determination was 0.583, which meant that native chickens’ business profits could be explained by the cost variable of chicken purchasing, corn feed, bran, drug and vitamin, labor, and electricity of 58.3%. Meanwhile, the remaining 41.7% was caused by other factors that were not included in the regression model. The partial test analysis demonstrated that the variable cost of chicken purchasing, electricity, and corn feed had significantly affected the profit of native chicken business (p<0.05), while the factors of bran feed, medicine or vitamin, and labor costs had not a significant effect on the profit of native chickens

Preference Analysis of Pigeonpea Varietal Attributes among Farmers and Traders in Kalyana Karnataka Region: A Conjoint Analysis Approach

Pulses play important role in the farming economy of Kalyana-Karnataka region. The study was carried out to identify the attributes of pigeonpea varieties preferred by both the farmers and traders using conjoint analysis technique. Multistage purposive random sampling technique was used for selection of respondents. Totally 120 farmers constituting 40 from each districts growing TS-3R and GRG-811 was selected from Bidar, Kalaburagi and Yadgir districts along with 30 pigeonpea traders 10 from each district were selected for the study. The findings of the study indicated that Kalyana Karnataka region is primarily inclined by attributes such as output price, crop duration, resistance to pests and diseases, and yield levels. Farmers prioritize varieties with higher output prices and shorter crop durations. Resistance to wilt and pod borer, along with minimal flower drop, are also significant factors. Farmers aim for yields exceeding 6 to 7 quintals per acre, alongside output prices above Rs.7000. Pigeonpea traders in the study area prioritize moisture content, thickness of seed coat, and recovery percentage for milling. Grains with less than 8% moisture content and thin seed coats are preferred. Recovery rates above 80% and longer keeping quality are also favored, while raw material price holds minimal importance. Conjoint analysis is finding increasing application in the field of market research and wider management decision- making. Hence, in the present study, it was used to measure the farmer’s and trader’s preference for the pigeonpea quality attributes. This study highlights the pivotal attributes guiding farmer and trader preferences for pigeonpea varieties in Kalyana-Karnataka region. Through conjoint analysis, it reveals crucial factors shaping variety selection and market dynamics. Future researchers can leverage these insights to optimize agricultural interventions and enhance crop productivity in similar contexts.

Trade-offs between Farm Incomes and Soil Loss: An Application of Bio-economic Modelling in a Semi-Arid Watershed in South India

Soil erosion is an economic problem and the cost of soil loss and its consequences could be very harsh. The major threat facing the sustainability and productivity is erosion and the associated nutrient loss through run off. And climatic shocks like drought and floods also aggravate the soil loss Aims: The study aims to bring out the different plans and the tradeoff analysis of the conservation and degradation through a multi objective framework. Study Design: Primary data was collected from the farmers of the Padmaram watershed, in Mahbubnagaar district, Telangana state in south India. A detailed questionnaire was prepared which included the current management practices, the input costs and output prices associated. And the soil loss was estimated using the RUSLE equation. And the tradeoffs were obtained by the multiobjective linear programming (MOLP) Place and Duration of Study: The padmaram watershed was selected, from kondurg mandal of Mahabubnagar district of Telanagana. Methodology: The multi–objective linear programming MOLP, is employed to get an efficient solution where in conflicting objectives are simultaneously optimized subject to constraints. The soil loss under different climatic scenarios were modelled using the CMIP data for 2020s,2050s and 2080s. The impact of climate change on soil loss and farm incomes were also assessed. Results: The operational land holding of a small farmer was 1.32 ha, medium famer about 2.71 ha and a large farmer about 4.99 ha. Cotton and maize were two major crops grown in the watershed holding an area of 56 per cent followed by paddy which occupies about 15 per cent. The major rabi crops were maize and rabi paddy (9 %). The cropping intensity of the watershed was 116.87 per cent. The soil loss from 60.0% of the watershed area was below 3.0 t ha−1 y−1. The soil loss from 27.5% area ranged from 3.1 to 4.5 t ha−1 y−1 and remaining 12.5% area have soil loss more than 4.6 t ha−1 y−1. Soil loss and net returns for future climate scenarios were assessed. Conclusion: The analysis of trade off between production and conservation would be useful in identifying optimum crop plans with reduction in soil loss. The results stress that the interventions in agriculture have varying costs and environmental and economic impacts. Their implementation requires appropriate investment decisions.

Managing risk in commodity processing using formula pricing contracts: An application to ethanol

AbstractAs is the case with many commodity processors, manufacturers of ethanol face considerable margin risk from a wide range of input and output prices and the interrelation of these risks with the technical operational efficiency of the plant. Buyers of ethanol desire greater budget certainty for future ethanol purchases. An approach to pricing that has found considerable use in the livestock, dairy, and milling industries is the use of component‐based formula pricing. This study constructs a Monte Carlo simulation model of a typical South Dakota ethanol plant that uses a formula contract to fix components of the ethanol price. The simulation results indicate that the contract has considerable margin risk management benefits for the ethanol producer. The buyer also achieves marginal risk management benefits but with greater budget certainty as the components are fixed. Additional observations of interest to the industry are drawn from the sensitivity results of the simulations. [EconLit Citations: Q13, G17].

Co-benefits and influencing factors exploration of air pollution and carbon reduction in China: Based on marginal abatement costs

This study addresses the pressing need for cost-effective emission reduction strategies that maximize co-benefits in terms of air pollution and carbon emissions. Our research contributes to the literature by accurately measuring these co-benefits, thereby facilitating their prompt realization in different regions. We employ an input-output framework that integrates carbon emissions and air pollution, allowing us to calculate marginal abatement costs using the shadow price of undesired output. Through this approach, we quantify the co-benefits and analyze the factors influencing them at both spatiotemporal and factor levels using spatial kernel density and geographical detectors. Our findings reveal several key insights: (1) under joint emission reduction efforts, we observe average annual reduction rates of 6.46% for marginal pollution and 6.10% for carbon reduction costs. Importantly, we document an increase in co-benefits from 0.50 to 0.86, characterized by an initial fluctuation followed by a linear increase. (2) the marginal cost difference for carbon emission and pollution reduction in western China was 179.45 and 155.08 respectively, compared to 321.51 and 124.70 in the Northeast, highlighting the crucial role of regional differences in shaping co-benefit outcomes. (3) we identify a negative spatial spillover effect between provinces, which diminishes over time, leading to heterogeneous effects when local provincial co-benefits exceed a threshold of 0.9. (4) during the adjustment period, we find that the industrial structure exerts significant single and interactive effects on co-benefits. Additionally, we highlight the critical role of environmental governance investment and government intervention as drivers of co-benefits in the current era. By offering the quantification of co-benefits under the marginal abatement costs, our study provides valuable scientific insights for planning and implementing effective synergy strategies.