Public Investment In Agriculture Research Articles

Does fiscal expenditure matter for agricultural development? Examining the impact of technological progress on food production

AbstractRice is a staple food for vast population of China and it remarkably contributes toward China's food security. Several fiscal programs have been implemented by Chinese central government for sustainable agriculture production. In this study, we examine the long‐run influence of agricultural public investment (API) and (agro)chemical inputs use (i.e., fertilizer and pesticide) on rice yield in main rice‐producing provinces of China. Second‐generation panel unit root tests, Westerlund error correction model cointegration test, Augmented‐Mean Group (AMG) and Common Correlated Effect Mean Group (CCEMG) estimation techniques have been used in this article. The co‐integration test results reveal strong evidence of the existence of the long‐run co‐integrating link between the considered series. The results of the AMG and CCEMG methods show that (i) API, (ii) fertilizer use, and (iii) power consumption for agricultural machinery positively and significantly impact rice productivity, whereas pesticide usage affects it negatively. Panel quantile regression showed that API, fertilizer use, power consumption, and sown area are significant and positive at 0.10–0.90 quantiles. The results also indicate that pesticide usage increases rice production at 0.10–0.30 quantiles but decreases rice production at 0.40–0.90 quantile levels. Based on these findings, we derive pertinent implications for China's food security.

Factors Determining Private Agricultural Investment: A Comparative Case Study of Two States of India

The study endeavours to examine the pattern and determinants of agricultural investment in two states of India viz., Haryana and Odisha. The existing literature points out that public investment in agriculture is one among the strongest determinants of private investment and output in agriculture. Accordingly, emphasis has been laid to accelerate the rate of public investment. The present study using primary data in two diverse regions of India is an attempt in that direction. Data from 150 households from both states have been collected using proportionate stratified random sampling method. The study finds that private farm investment as well as output are relatively lower in Odisha, being an agriculturally lagged region. It is further seen that private investment in agriculture has been significantly influenced by canal irrigation, institutional credit, and land size in Odisha. While in Haryana, farmer’s education, land size and institutional credit positively and significantly affected private farm investment. Capital use in agriculture turned out to be positive and significant variables influencing agricultural productivity in both regions. The study thus recommends to ensure public policies on the aspects of irrigation infrastructure, research and extension, improvement rural infrastructure etc. in stimulating private investment and agricultural output. Public investment in agriculture on these components would bridge inter-regional inequalities and ensure inclusiveness as it promotes employment opportunities and sustainable growth in agriculture. In the context of Odisha, being a poorer state, these policies could serve as important tools of poverty alleviation.

Examining the impact of farm management practices on wheat production: Does agricultural investment matter?

Over the years, the allocation of public funds toward agriculture has consistently played a pivotal role in facilitating the modernization and commercialization of the agricultural industry. Similarly, the integration of technological breakthroughs plays a pivotal role in guaranteeing the sustainability of food production, not solely for the present populace but also for subsequent generations. The present study examines the impact of public investment in agriculture and farm management practices, specifically focusing on cultivated area, fertilizer use, pesticide application, total agricultural machinery, and rural labour force on wheat production in nine provinces of China. The study encompasses the period from 1995 to 2020. This study employs advanced econometric techniques, such as second-generation unit root procedures (CADF and CIPS) and the Westerlund cointegration method, to investigate the stationarity properties and cointegration of the variables. The findings derived from the AMG and CCEMG methods indicate that public investment plays a statistically significant influence on wheat production. In the context of production-related variables, long-term wheat production is statistically and substantially influenced by the total area under cultivation, fertilizer use, and pesticide application. Besides these results, the Dumitrescu and Hurlin causality test reveals a unidirectional causality from agricultural machinery power consumption to wheat production. Furthermore, bidirectional causality exists between public investment, cultivated area, fertilizer use, labour, and wheat production. These results provide vital implications and valuable insights for policymakers in China, which may furnish novel policymaking options for sustainable food production through strategic investments in research and development, irrigation systems, and technological advancements.

Carbon Emissions from Agricultural Inputs in China over the Past Three Decades

Global warming has become one of the major threats to the security of human survival, security, and sustainable development. Agricultural production has been widely suspected as one of the main sources of anthropogenic carbon emissions. Analyzing the changing characteristics and influencing factors of agricultural carbon emissions is of great significance for the mitigation of global climate change and the sustainable development in agriculture. Taking China, a large agricultural country, as an example, this study used the empirical model to quantify carbon emissions from agricultural inputs from 1991 to 2019, and analyzed the driving factors using ridge regression. We found that agricultural carbon emissions in China have been on the rise in the past 30 years, but at a markedly slower pace. From 2008 to 2019, the average annual growth rate of agricultural carbon emissions was 1.47%, down significantly from 2.92% between 1991 and 2007. The carbon emissions per unit of planting area showed an overall increasing trend, which grew from 179.35 t ce/km2 to 246.26 t ce/km2, with an average annual growth rate of 1.13%. The carbon emissions per unit of agricultural output mainly showed a decreasing trend, which decreased from 0.52 kg ce/CNY to 0.06 kg ce/CNY, with an average annual rate of change of −7.42%. China’s agricultural carbon emissions were closely related to macro-policies. Fertilizer inputs, agricultural industry structure, and energy use intensity were significantly positively correlated with carbon emission intensity. The degree of urban feedback to rural areas, public investment in agriculture, and large-scale planting were significantly negatively correlated with carbon emission intensity, but the impacts of these factors had a “lag effect”. In order to reduce carbon emissions from agriculture and promote development in green agriculture, we suggest that the government should further increase the degree of urban feedback to rural and public investment in the agricultural sector. In addition, large-scale agricultural production should be encouraged to increase resource efficiency and reduce carbon emissions.

The role of agricultural sector performance in attracting foreign direct investment in the food and beverages sector. Evidence from planned investments in Africa

AbstractUsing a novel dataset on foreign direct investment (FDI), this paper analyzes the correlates of planned FDI in the food and beverages sector in 49 African countries over the period 2003–2017. It applies the random effects model and augments the standard specification of FDI determinants with a set of factors related to the agricultural sector performance, hypothesized to be essential from the perspective of supply chain linkages and access to raw materials. The results indicate that well‐performing and well‐capitalized agricultural sector of the host country is a key factor associated with the choice of investment location by foreign investors, especially those from the Global North. Capital investment in agriculture, as proxied by agricultural gross fixed capital formation and net capital stock, is particularly important. Public investment in agriculture, in the form of government expenditure and official development assistance, is also associated with higher FDI. These factors, however, are not significant in case of the least developed countries where only market potential appears to matter for foreign investors. The results suggest that complementarities may exist between different types of investments and that policy‐makers willing to attract food and beverages FDI should prioritize agricultural sector development. [EconLit Citations: E22, E24, F21, F23, Q00, Q13, Q18].

Agricultural development promises more growth and less poverty in Africa: Modelling the potential impact of implementing the Comprehensive Africa Agriculture Development Programme in six countries

SummaryMotivationCountries of Africa have, through the Maputo and Malabo declarations and the companion Comprehensive Africa Agriculture Development Programme (CAADP) committed to increased public investment in agriculture. If implemented, this should contribute substantially to realizing several development goals, including reduction of poverty and hunger and making rural populations more resilient to climate change.PurposeHow much would implementation of National Agriculture Investment Plans (NAIPs) formulated within CAADP help achieve the aims of the Sustainable Development Goals, Agenda 2063, and the Malabo Declaration—namely, to boost agricultural growth, eradicate hunger, and reduce poverty and inequality?Methods and approachWe use data from Côte d'Ivoire, Ethiopia, Malawi, Mozambique, Niger, and Rwanda compiled in a Social Accounting Matrix. We run Computable General Equilibrium models with microeconomic models for each country to simulate the potential effect of implementation of the NAIPs. Three different methods to finance increased spending on agriculture are simulated: one that reallocates public expenditure with no overall increase in spending; a second that finances extra spending by more taxes; and one that relies on external funding to increase total spending.FindingsResults show that agriculture‐led investment would significantly increase agricultural growth, raise farm productivity, reduce dependency on food imports, improve incomes of food producers, and cut poverty. In most countries, increased investment in agriculture does more to boost growth, create jobs, and cut poverty than investments in industry or services. Raising overall public spending to allow more agricultural investment is far more effective than shifting spending within a fixed budget.Policy implicationsFor the six countries modelled, an agriculture‐led investment strategy appears the best way to eradicate hunger and reduce poverty and inequality while building resilience of rural households.

Does institutional quality affect the impact of public agricultural spending on food security in Sub-Saharan Africa and Asia?

Due to declining or stagnating agricultural productivity and rising food insecurity, African countries agreed to dedicate ten percent of public spending to agriculture under the Maputo and Malabo declarations in 2003 and 2014, respectively. Similarly, Asian countries increased spending on agriculture via input subsidies for crop production, greater mechanisation, and research and development funds. These spending increases are happening in countries with varying levels of institutional quality, and hence, differences in observed outcomes. Using cereal prodution as proxy for the availability dimension of food security, we conduct a comprehensive empirical assessment of the impact of public agricultural spending on food security under heterogeneous institutional quality regimes. We estimate fixed effects models with robust standard errors using an unbalanced panel of 25 countries in Sub-Saharan Africa and Asia over 22 years. The preponderance of evidence suggests that institutional quality plays a significant mediating role on the impact of public agricultural spending on food security. Overall, the magnitude of change in cereal production due to public agricultural spending is larger for countries with higher institutional quality than for those with lower institutional quality. While public investment in agriculture enhances food security, its effectiveness is predicated on improvements in the quality of public institutions. High quality public institutions protect private physical and intellectual property and guide prudent use of public resources.

Research on Environmental Governance, Local Government Competition, and Agricultural Carbon Emissions under the Goal of Carbon Peak

By introducing network game theory, this paper analyzes the internal relationship and interaction mechanism among environmental governance, local government competition, and agricultural carbon peak level. On the basis of theoretical analysis, a spatial panel model is constructed using panel data from 30 provincial-level regions in China for empirical analysis. The research finds that local governments have positive competition with respect to the agricultural carbon peak, they adopt complementary carbon peak competition strategies, and they are more inclined to take geographical distance to adjacent regions as the yardstick in the competition with respect to the agricultural carbon peak strategy. That is, when the carbon peak level of surrounding provinces increases, the carbon peak level of the region will also increase. Thus, there is a phenomenon of mutual imitation and convergence between neighboring provinces. Environmental governance has a significant positive direct effect and a positive spatial spillover effect. From the perspective of coefficient, its direct effect is significantly greater than the spatial spillover effect. Therefore, more attention should be paid to local environmental governance to promote the improvement of the agricultural carbon peak level. Furthermore, the agricultural industrial structure, fiscal decentralization, agricultural public investment, regional industrial structure, and the proportion of the rural population have significant spatial spillover effects. The agricultural industrial structure and fiscal decentralization are significantly positively correlated with the peak level of agricultural carbon while the proportion of the rural population is significantly negatively correlated with the peak level of agricultural carbon. The research results have important theoretical value for expanding the research in the field of agricultural carbon emissions and provide important practical reference for China to successfully achieve the goal of agricultural carbon peak and promote the high-quality development of agriculture

Comment on “Siamese Twin Failures: Structural and Regulatory Transformations in Unequal Thailand”

Kanchoochat (2022) takes an institutional approach to explaining the persistence of inequality, poverty, and low growth rates in Thailand over recent decades. He focuses on two institutional transformations: a “structural transformation,” meaning a move away from agriculture, and a “regulatory transformation,” meaning efficiency-enhancing reforms in public administration, decentralization, anti-monopoly policies, and taxation. Kanchoochat argues that the high-growth countries of East Asia, especially Taiwan and South Korea, achieved these two transformations, resulting in higher growth and declining inequality, while Thailand has failed. This is a succinct, elegant, and original approach to an important issue. On the structural transformation, Kanchoochat has excellent charts showing the extent of Thailand's failure compared to other Asian countries to move people out of agriculture and to improve productivity. He attributes this failure to two causes: government subsidies of inefficient agriculture, especially since the 1990s, and the continuing role of the farm as a form of social security in the absence of state provision. He suggests that ending subsidies and constructing a comprehensive social security system would overcome the problem. While I would welcome these reforms, I doubt they would achieve a “transformation,” because I think other factors are important in sustaining this inefficient agricultural sector. Most important of all, access to and use of land, the single most important input into agricultural production, is still lumbered with many restrictions. Around 60% of land is still ultimately controlled by government. Large areas are not available for economic use, and others have restrictions on their use (Cripps, 2020). Without a far-reaching reform of the tenure system, the potential of agriculture will not be realized. Another restraining factor is the very low rate of public investment in agriculture over the long term. On the regulatory transformation, Kanchoochat shows how moves toward democratization, decentralization, and progressive polices on tax and competition foundered on the intransigence of the “traditional elite,” meaning the military, and segments of the bureaucracy, professions, and politically connected entrepreneurs. This alliance created a new institutional framework featuring appointed bodies and the judicial system which blocked or reversed reforms. Kanchoochat argues that change requires a larger role for electoral institutions and a “new social contract” under which citizens will agree to pay more tax and entrepreneurs will be happy with less monopoly. But it is not clear what social forces might drive such changes. Kanchoochat, following North, Aoki, and others, argues that institutions are created by human will to form a stable structure for the conduct of everyday life. According to this definition, institutions are susceptible to change but there is a tendency for “a self-sustaining system of shared beliefs” to hinder reform of institutions that fail to perform. My major concern is that explanations which see institutions as the critical players beg the question of what social forces shape these institutions and also what social forces might alter the situation. In short, what can disturb the dominant role of the “traditional elite” which seems quite happy to live with an inefficient agricultural sector, an inefficient state, and high inequality?

Prioritizing public investment in agriculture for post-COVID-19 recovery: A sectoral ranking for Mexico

Mexico's economy contracted unprecedentedly in 2020. Agriculture remains important for the economy and job creation, but it lacks strong productive dynamism and exhibits high informality. We show that investing in agriculture’s infrastructure can contribute to economic recovery and welfare post-COVID-19. On the basis of a dynamic computable general equilibrium model, we allocate to agriculture sectors public investment in productive infrastructure equivalent to 0.25% of GDP during three immediate years and analyze effects up to 2030. We see improvement in GDP, agri-food output and private consumption with rural poverty reduction. Based on the impact on these variables, a ranking suggests that new investments should prioritize the sugar cane sector. Highly ranked are also cereals, mainly maize, and other export-oriented crops such as flowers and coffee. Not only should investments prioritize these sectors, but the government should also finance them with foreign borrowing to speed up recovery and avert the short-term macroeconomic trade-offs of domestic financing.

Assessment of the Impact of Direct Taxes on Public Investment in Agriculture in Nigeria

This study investigates the impact of direct taxes on agricultural funding. For this analysis, the petroleum profit tax, personal income tax, and corporate income tax were employed as direct taxes. These are the three largest direct taxes chosen for this analysis. Agricultural finance has long been a cause of concern, forcing the entire country to suffer from acute hunger as a result of unnecessary apathy. Furthermore, Nigeria now has a high degree of hunger index at 28.3, placing the country 103rd out of 116 countries in the 2021 Global Hunger Index record. This research considers all of these problems and aims to assess the extent to which direct taxes may alleviate the load by providing more direct tax revenues to agricultural enterprises. The evaluation is carried out by collecting secondary data from the Organization for Economic Cooperation and Development (OECD) on chosen direct taxes and agricultural spending from the Central Bank of Nigeria's Statistical Bulletin. The study period runs from 2010 to 2020. The study used a multiple regression technique to present real evidence that all of the direct tax types analyzed had a minor impact on agricultural finance, with the exception of personal income tax, which has a positive and considerable impact on agricultural growth. This leads to the request that Nigerian tax rules be altered to allow for significant use of tax revenue for agricultural loans. The insignificance of petroleum profit tax and corporate income tax to agricultural funding necessitates more effective tax processes and a crackdown on malfeasance among tax authorities.

Agriculture carbon-emission reduction and changing factors behind agricultural eco-efficiency growth in China

Reducing agricultural carbon emissions (ACE) plays a valuable role in China's overall carbon-emission-reduction plan. Using provincial data from 2001 to 2018, this work explores the dynamics of ACE and agricultural eco-efficiency (AEE) in China and the driving factors of AEE growth by DEA–Malmquist–Luenberger and panel data analyses. A previously unexplored aspect is investigated on the different mechanism of AEE growth among three types of agricultural areas. The findings suggest that the trend of ACE shifted from increasing to continuously decreasing after 2015 at the national level, mainly based on the contribution of major grain-producing areas. The results also imply that the AEE growth mechanism changed after 2010, mainly owing to technological progress. The improvement of agricultural infrastructure and human capital positively contributed to AEE growth, whereas public investment in agricultural R&D and agricultural industrial structure undermined it. Hence, green-oriented policies targeted at regional heterogeneity and agricultural public investments are needed for ACE reduction and AEE growth at the same time.

Targeting Public Investment in Agriculture for Higher Private Investment in Eastern India

Targeting Public Investment in Agriculture for Higher Private Investment in Eastern India

Trends and Causes of Farmers Suicide in Maharashtra State, India

The present study accepted out with an investigative strategy of social research on farmer’s suicide trend in Maharashtra state, Over 15,000 farmers have committed suicide in Maharashtra between 2013 and 2018. In Vidarbha and Marathwada from January 2001 to July 2018, a total of 29602farmers from 18 districts of died by suicide. About 83.74% of the state's total farmer suicides were in the two regions of Vidarbha and Marathwada. The highest farmer suicide in Amravati division is 57.8%, than Nagpur division 15.6%, Aurangabad division 13.6%, Nasik division 8.3%, Pune division 4.5% and lowest farmer suicide 0.8% in Konkan division. A farming disaster has rainfall a spate of suicides in Maharashtra. The suicide mortality rate for farmers in the state has increased from 2001 to 2018. The rain dependent cotton growing farmers of Maharashtra are faced with declining profitability because of dumping in the global market by the US, low import tariffs, failure of the Monopoly Cotton Procurement Scheme and withdrawal of the state are resulting in declining public investment in agriculture, poor government agriculture extension services and the diminishing role of formal credit institutions. The farmer is faced with yield, price, credit, income and weather uncertainties. The way out is to merge bold public policy initiatives with civil society engagement.

Policy Review of Agricultural Public Investment in the Heisei Era:

Policy Review of Agricultural Public Investment in the Heisei Era:

Budgetary influence under information asymmetries: Evidence from Nigeria’s subnational agricultural investments

Abstract With emerging recognition of changing climates’ impact on agricultural productivity, a sharper lens is focused on how to target agricultural public investments for development. This paper contributes to an understanding of budget decision-making processes in agricultural development, by examining to what extent those with superior information and expertise on a sector have sway over how public resources to the sector are allocated. The empirical qualitative analysis of this paper employs process tracing with an embedded case study design, based on interviews of 79 senior public sector key-informants in Nigeria. We also analyzed quantitative public expenditure data in the study areas. We draw insights from theories of information asymmetries in the public sector along three dimensions. Within the first type of information asymmetry, we find that, despite the higher agricultural technical expertise that sector bureaucrats have vis-a-vis the elected non-sector-specific chief executives, it is the latter who heavily influence agricultural resource allocation. In the second form of information asymmetry, the benefits from superior lower-tier information are only exploited at one subnational (state) level but not at the other (local government) level. Within the third kind of information asymmetry, public leaders prioritize funding for those types of public investments that are more visible by their nature, and outputs of which materialize relatively rapidly; this disfavors agriculture. Going beyond the literature on the impact of information interventions, this study sheds light on the extent to which information already in the public sector is tapped into to guide the provision of public goods and services.

Analysis of the impact of public investments on agricultural growth in the West African Economic and Monetary Union

This article aims to analyse the determinants of agricultural growth in the West African Economic and Monetary Union (WAEMU). Fixed effect panel models have been estimated. The sample used to assess these determinants covers eight African countries over the period 1961 to 2017. The estimation results indicate that agricultural public investments have a positive and significant impact on agricultural growth and this impact depends on the combination with other factors of agricultural growth. In addition, the findings shows that other factors such as producer cotton prices, rainfall, number of tractors and farm labour force also drive good agricultural growth. On the other hand, the quantities of urea, the production and cotton land use do not have a significant incidence on the agricultural growth of the zone. For an effective agricultural growth in this area, the adoption of chemical, mechanical and consequential agricultural investments is becoming imperative and a necessary and sufficient condition to boost a true green revolution. Moreover, our results suggest that the main channel for sustainable agricultural growth in the union is the combination of all factors of production.

ANALYSIS OF THE IMPACT OF PUBLIC INVESTMENTS ON AGRICULTURAL GROWTH IN THE WEST AFRICAN ECONOMIC AND MONETARY UNION (WAEMU)

This article aims to analyse the determinants of agricultural growth in the West African Economic and Monetary Union (WAEMU). Fixed effect panel models have been estimated. The sample used to assess these determinants covers eight African countries over the period 1961 to 2017. The estimation results indicate that agricultural public investments have a positive and significant impact on agricultural growth and this impact depends on the combination with other factors of agricultural growth. In addition, the findings shows that other factors such as producer cotton prices, rainfall, number of tractors and farm labour force also drive good agricultural growth. On the other hand, the quantities of urea, the production and cotton land use do not have a significant incidence on the agricultural growth of the zone. For an effective agricultural growth in this area, the adoption of chemical, mechanical and consequential agricultural investments is becoming imperative and a necessary and sufficient condition to boost a true green revolution. Moreover, our results suggest that the main channel for sustainable agricultural growth in the union is the combination of all factors of production.

Comparative Sectoral Efficiency in the Fight Against Poverty and Unemployment in Burkina Faso

In this paper, we construct an economy-wide recursive dynamic model for Burkina Faso to explore the impact of scaling up public capital in different aggregate sectors. While several researchers emphasize the importance for sub-Saharan African countries of giving higher priority to agriculture to stimulate economic growth and reduce poverty, some authors state that non-agricultural sectors should now receive special attention following the success achieved in some countries in South Asia. These countries have indeed applied a different paradigm: a program of economic growth and poverty reduction based on non-agricultural sectors. This study aims to provide insights into this debate. It draws from the public capital productivity literature to postulate the positive productive externalities of public investment. The results show that, with the same amount of public investment, financed by the same source, public investment in agriculture yields positive impacts that are significantly higher than those yielded by investments in non-agricultural sectors (industry and services). Added value growth in non-agricultural sectors is higher under public investment in agriculture than in non-agricultural sectors.

Stumbling Agriculture in Bihar: Linkages with Institutional Mechanism and Public Investment

The agriculture in Bihar is still grappled with low investment and low input agriculture and therefore besides low productivity, growth in production and productivity of most of the major crops are quite low as compared to other developed states. Though agriculture contributes more than 40 per cent to state domestic product, but it is not attracting public investment in consonance with the demand and output growth. Therefore, successful development of this economically fragile region, having more than 35 per cent population below poverty line, requires new and improved approaches, particularly for agricultural intensification. The presently study is an attempt to examine the status and trend of utilization and expansion various critical agricultural inputs in Bihar in comparison to other developed states. The production function analysis has also been done for the period of 1990-2003, in value of output from agriculture has been considered as dependent variable, while gross cropped area, gross irrigated area, fertilizer consumption, institutional agricultural credit and public expenditure on agriculture were taken as explanatory variables. The results raise the tantalizing possibility that better emphasis on irrigation expansion, use of higher dose of chemical fertilizer backed with greater public investment in agriculture in these fragile regions could actually offer a “win-win” strategy for addressing productivity and poverty problems from the region.