Real Producer Prices Research Articles

Price Incentives and Supply Response in Cocoa -A Case of Border Regions of Ghana

Smuggling of cocoa between Ghana and its neighbouring producing countries such as Cote d’Ivoire and Togo is a frequent occurrence often to the advantage of the country posting higher producer price. Ghana is a net loser with regards to the smuggling of cocoa given relatively lower real producer price compared to its counterparts in production. Additionally, the close geographical location of key producing regions to the border lends support to such activities. This study investigates the supply response of cocoa in producing region such as Western North, Western South and Brong-Ahafo with proximity to Cote d’Ivoire and Volta which shares borders with Togo using data from 1981 to 2017. The study further estimates the volume of cocoa crop lost from these regions to the country’s neighbours from 2000 to 2017. In the findings, relative price differences significantly impact the volumes of reported crop for the country with 1% higher price abroad driving down production volumes in Western North, South and Brong-Ahafo by 0.53%, 0.48%, and 0.11% respectively. In 2013/14 crop year the country lost averagely 25,494 MT and 21,883 MT due to smuggling out of Western North and South, moderating to 1,559 and 1,358 in 2016/17. The Volta region consistently records outflow in each crop year except for 1999/2000, with peak losses in 2010/11 of 2,160 MT moderating to 1,197 in 2016/17. Net gains into the country from cocoa smuggling spanning from 1999/2000 to 2016/17 is averagely 23,534 MT and 15,336MT into Western North and South. However cocoa smuggling for both Ghana and its neighbours is on the descent in recent years as price disparities reduce. Intensifying the collaboration between Ghana and its close counterparts to minimize real crop price differences will effectively curtail the menace and the negative fallout of this to each country.

Early Life Circumstance and Adult Mental Health

We show that psychological well-being in adulthood varies with circumstance in early life. Combining a time series of real producer prices of cocoa with a nationally representative household survey...

DAMPAK KEBIJAKAN IMPOR DAN FAKTOR EKSTERNAL TERHADAP KESEJAHTERAAN PRODUSEN DAN KONSUMEN BAWANG MERAH DI INDONESIA

Shallot is the main priority commodity in the development of lowland vegetable in Indonesia. Demand for shallot increases every year but domestic shallot production is unable to meet the demand. Therefore, import of shallot is needed to cover the gap. On the other hand, the import policy also has changed by government in accordance with the policy objectives. The research objectives are (1) to identify the factors that influence the production, demand, import, and price of shallot; (2) to analyze the impact of import tariff, import quota, and the external factor on supply, demand, and price of shallot; and (3) to analyze the impact of import tariff, import quota, and the external factor on shallot producers and consumers welfare in Indonesia. In order to address these objectives, a simultaneous equations model of Indonesian shallot trade was estimated by Two Stage Least Squares (2SLS) method. The shallot production is influenced by the real producer price of shallot, harvested area, and credit interest rates. This research indicates that the increase of shallot import tariff will increase the shallot prices, producers welfare, government revenues and net welfare, but it decrease supply, demand, import, and consumers welfare. To anticipate the decrease of world price of shallot (12 percent) and to increase the shallot producers and net welfare in Indonesia, government of Indonesia is suggested to restrict the shallot import by imposing import tariff (more than nine percent) or decrease import quota.

Demand for private sector loans in the euro area

The current expansionary monetary policy of the European Central Bank stimulates corporates and households to higher investment and consumption. The article investigates determinants of demand for loans of private sector granted by monetary financial institutions of the euro area. The modelling involves monthly data of cost of borrowing and economic indicators (2004 M1-2016 M4). The outcomes suggest that private sector loans are positively related to industrial production index and negatively to real interest rate and producer price index. The knowledge about determinants of loans of private sector is of importance for monitoring and steering economic and monetary policy of the euro area and for households and corporates timing the use of debt finances from the monetary financial institutions.

Market power of Tunisian olive oil in EU market

The aim of this study is to appreciate the competitiveness of Tunisian olive oil in the European Union (EU) market by comparing its market power with those of the two main competitors, namely Italy and Spain. For this purpose, we estimate the residual demand elasticity for the main competitor countries in this market. We employ the real exchange rates and producer prices of olive oil as cost shifters, while the real gross domestic product in the EU is used as a demand shifter. Results confirm the imperfect competition in the olive oil European Market. Furthermore, they show that Italy has the highest market power, and Spain come in second position despite its larger market share, while Tunisia has relatively the lowest market power. In addition, the results confirm the connection between export prices of olive oil and cost variables in competing countries. Regarding Tunisian case, results indicate that the export price observes an upward trend when the cost of Italian olive oil rises, due to increased production costs or currency appreciation.

Effect of Climatic and Non-Climatic Factors on Cassava Yields in Togo: Agricultural Policy Implications

This paper examines the effects of climatic and non-climatic factors on cassava yields in Togo using an Autoregressive Distributed Lag (ARDL) modelling approach and pairwise Granger Causality tests. Secondary data on production statistics, rural population, climate variables, prices and nominal exchange rate for the period 1978–2009 are used. Results for estimated short- and long-run models indicate that cassava yield is affected by both ‘normal’ climate variables and within-season rainfall variability. An inverse relationship is found between area harvested and yield of cassava, but a significant positive and elastic effect of labour availability on yield in the long run. Increasing within-lean-season rainfall variability and high lean-season mean temperature are detrimental to cassava yields, while increasing main-season rainfall and mean-temperature enhance cassava yields. Through Granger Causality tests, a bilateral causality is found between area harvested and yield of cassava, and four unidirectional causalities from labour availability, real producer price ratio between yam and cassava, main-season rainfall and lean-season mean temperature to cassava yields. Based on the findings from this study, investment in low-cost irrigation facilities and water harvesting is recommended to enhance the practice of supplemental irrigation. Research efforts should as well be made to breed for drought, heat and flood tolerance in cassava. In addition, coupling area expansion with increasing availability of labour is advised, through the implementation of measures to minimize rural–urban migration.

Acreage Response of Cotton in Benin: Macro-level Response and Some Policy Implications

Cotton is very important for the economy and for poverty alleviation in Benin. However, cotton lint production started having a decreasing trend since 2003, and this is due to the decline in cotton acreage. Thus, to help inform policy decisions on how cotton production could be boosted, this study estimated acreage response of cotton by the means of Ordinary Least Squares (OLS) over the period 1971-2011. In this regards, the model is estimated using the Hendry Error Correction Model. The results reveal that, in the long run, cotton acreage depends positively and significantly on the exchange rate, total number of tractor used, and lagged real producer price of cotton seed, and negatively and significantly on lagged producer price of rice paddy. In the short run, cotton acreage is significantly driven by rural population growth, and lagged real producer price of cotton seed, and is negatively influenced by lagged producer price of rice paddy. These results suggest that Benin could improve cotton production by putting in place measures to increase area devoted to cotton production, reduce labor shortages, eliminate inefficiencies in cotton sector management, and promote tractor use. Moreover, the central bank could maintain current exchange rate policy and reinforce it.

¿Es la ganadería bovina de carne una actividad competitiva en México?

This work measures Mexico’s beef cattle production competitiveness at the macro level for the period from 1980 to 2009, this analysis was performed by calculating six indexes. The final aim is to observe the evolution of competitiveness after trade liberalization in Mexico, the results show that for certain periods, the country turned out to be competitive in the activity of beef production after trade liberalization treaties, however these treaties have led to an increase of imports at a growth rate of 124.7%, above the increase of exports which have augmented in 49%. This represents a reduction of the cattle industry competitiveness, also generated as an effect of increased raw material costs and a decline in the real producer price. Both effects generate dependence of the domestic supply consumption on foreign trade.

Intersectoral labor mobility and deforestation in Ghana

AbstractThis paper quantifies the effects of the determinants of intersectoral labor mobility and the effect of intersectoral labor mobility on deforestation in Ghana over the period 1970–2008. A cointegration and error correction modeling approach is employed. The empirical results show that labor mobility from the agricultural to the non-agricultural sector exerts negative effects on deforestation in Ghana in the long run and short run. Relative agricultural income exerts a significant negative effect on intersectoral labor mobility in the long run. Deforestation is influenced positively by population pressure, the price of fertilizer and rainfall, whereas access to irrigation infrastructure exerts a negative effect in the long run. In the short run, real producer prices of cocoa and maize exert significant positive effects on deforestation whereas access to irrigation infrastructure exerts a negative significant effect. Fruitful policy recommendations based on the empirical magnitudes and directions of these effects are made in this paper.

Food Retailing and Consumer Food Prices in Slovenia

This article focuses on agro-food chains and agro-food consumer prices in Slovenia considering its European Union (EU) membership. As the Slovenian agro-food markets were distorted prior to the EU accession with some agro-food prices that were greater than comparable EU prices, the empirical results confirm that with the EU membership Slovenian real agro-food consumer prices have largely adjusted downward. Besides policy changes, internalization of retailing and distribution chains by entries of supermarkets and hypermarkets have had impacts on market structures and rationalization of marketing activities. Supermarkets and hypermarkets are taking over a substantial proportion of retail trade in agro-food products with implications on increasing food chain efficiency by squeezing structures in consumer prices, as well as farmers, processors, and marketing margins for main agro-food staples. After the greater price adjustment changes that occurred by the EU membership, some stabilizations in agro-food markets is occurring, but at different levels of real consumer and producer prices and marketing margins. This implies that agro-food markets in the new EU member states are becoming much more integrated into internationally competitive markets, where pricing, sales promotion issues, and branding are taking an important role in the market segmentation of agro-food products.

Effects of market deregulation on cocoa (Theobroma cacao) production in Southwest Nigeria

In the 1970s and 1980s there was a consistent economic down turn and decline in aggregate cocoa output in Nigeria. This culminated in the introduction of structural adjustment programme (SAP) in 1986 to stem this trend. The objective of the paper was to evaluate the effect(s) of the deregulated policy measures on the cocoa industry in southwest Nigeria. Data were collected from six important cocoa producing Local Government Areas (LGAs) within the region and these were analyzed using descriptive statistics and regression techniques.The study found that after two decades of operating SAP and economic liberalization policy in the country, cocoa production still remains in the hands of smallholder operators with little application of chemical inputs to enhance output. The paper concludes that significant increases in aggregate cocoa output can be achieved through a combination of sustained increase in real producer prices, local currency devaluation and increased supply of chemical fertilizers. Key words: market deregulation, cocoa, southwest Nigeria.

Price and Income Elasticities of Palm Kernels Export Supply in Nigeria

ABSTRACT In Nigeria, the Federal Government is concerned about revitalising the agricultural export sector as part of attempts to diversify the nation's export base from crude oil, in line with its Economic Reform Agenda. This paper estimates price and income elasticities of palm kernels exports with a view to ascertaining whether it is an appropriate policy to encourage the exports of palm kernels, in view of the changing terms of trade in favour of semi-finished products from palm kernels. The data spans 34 years; from 1970 to 2003, and were sourced from the Central Bank of Nigeria (CBN), Food and Agriculture Organisation (FAO) of the United Nations and the International Financial Statistics (IFS) of the International Monetary Fund (IMF). The analysis lends itself to co-integration and error correction techniques, considering current trends in time-series modelling. Results show that the error correction mechanism indicates a feedback of about 193.5% of previous year's disequilibrium from the long-run elasticity of real producer price of palm kernels and foreign income. Clearly, this signals an overreaction of exports supply since disequilibrium adjustment is more than 100% within one year. In the long run, the real producer price and foreign income have a significant but negative effect on palm kernels exports. By the same token, in the short run, the real producer price has significant elastic, but negative effect on export supply, while foreign income elasticity is negative but not significant in explaining export supply in the short run. These results are informative and indicate that policy actions directed at boosting exports of palm kernels would be counter-productive. Instead, emphasis should be placed on expanding domestic industrial utilisation since the semi-finished products, like palm kernel Olein, Palm kernel Stearin, Palm kernel Cake (expeller), etc., which are favoured by importing nations, can be exported to earn more foreign exchange for country.

Economic Reforms and Evolution of Producer Prices in Kenya: An ARCH‐M Approach

Abstract: For the last two decades,most countries in sub‐Saharan Africa have been liberalizing their economies,and agricultural markets in particular.The reforms were envisaged to improve the agricultural sector terms of trade and prices received by producers as a means of stimulating production and growth.This paper analyses the effects of market reforms on the evolution and volatility of producer prices in Kenya.An autoregressive conditional heteroscedastic in mean (ARCH‐M)regression model is applied to analyse monthly producer prices for a 15‐year period.The periods 1985–91 and 1992–99 represent the pre‐reform and reform periods,respectively.Milk and maize are used to represent food items while coffee and tea represent traded non‐food commodities.Real producer prices for coffee,tea and maize significantly declined during the reform period while milk prices increased.Results also indicate that market reforms were generally associated with higher volatility of commodity prices,although there are inter‐commodity differences.These price developments could be attributed to sequencing problems and the intermittent nature of market reforms as well as limited private sector participation in agricultural markets.International trends in agricultural commodity prices are also shown to have played a major role,especially for traded products.Policy implications with regard to smallholder agricultural development in a liberalized market environment in Kenya and in the wider context of sub‐Saharan Africa are highlighted.Résumé: Au cours de ces deux dernières décennies, la plupart des'pays d’Afrique subsaharienne ont libéralisé leur économie et leurs marchés agricoles, en particulier. Les réformes étaient censées améliorer les termes de l’échange du secteur agricole et les prix aux producteurs pour stimuler la production et la croissance. Le présent article analyse les effets de la réforme du marché sur l’évolution et la volatilité des prix à la production au Kenya. Ses auteurs se servent d’un modèle autorégressif de régression conditionnelle hétéroscédastique (ARCH‐M) pour analyser la production mensuelle de riz sur une quinzaine d’années, la période allant de 1985 à 1991 et celle comprise entre 1992 et 1999 représentant les années de pré‐réforme et de réforme, respectivement. Ils utilisent le lait et le maïs pour représenter les produits alimentaires, et le café et le thé pour représenter les produits commercialisés non alimentaires. Les résultats obtenus montrent que les prix réels au producteur du café, du thé et du maïs ont sensiblement baissé pendant les années de réforme, alors que le prix du lait a augmenté. Ils montrent, par ailleurs, que la libéralisation de l’économie s’accompagne généralement d’une plus grande volatilité des prix des produits de base, malgré les écarts enregistrés entre les produits. Cette évolution du cours des produits de base peut être attribuée non seulement aux problèmes de séquençage et au caractère intermittent des réformes libérales, mais aussi à l’intervention limitée du secteur privé sur les marchés agricoles. Le présent article montre, en outre, que l’évolution sur le marché international des prix des produits agricoles est d’une importance capitale – notamment pour les produits commercialisés. Il met également l’accent sur l’incidence que les orientations politiques nationales peuvent avoir sur le développement des petites exploitations agricoles dans un environnement commercial libéralisé au Kenya, en particulier, et en Afrique subsaharienne, en général.

AGRICULTURAL LAND EXPANSION AND DEFORESTATION IN MALAWI

ABSTRACT The literature on deforestation in Malawi points to a number of causes, including high population in relation to available land, poverty, market and policy failures, drought, and the severity of structural adjustment policies. Agricultural statistics from Malawi indicate substantial increases in area under maize and tobacco between 1970 and 1994. Maize is the main staple crop, occupying about 69% of the cultivated land while tobacco is the main export and cash crop. A regression model was employed to highlight factors responsible for this expansion. The analysis suggests that the structural adjustment policies aimed at liberalization of tobacco production, marketing of maize and tobacco, as well as increasing accessibility to foreign currency, had a positive and moderately significant influence on the expansion of the land area under maize but less on that under tobacco. Given declining real producer prices for both crops, the driving force for the increasing area seems to be the desire by farmers to maintain their income from the sale of these two crops combined, rather than their prices. A household survey in three study areas chosen to cover a range in distance from the nearest town, confirmed significant increases in household land holdings in the recent past. Villagers living around the forest reserves were identified as being key agents of deforestation, mainly through careless cutting of trees, opening up of gardens, grazing livestock and charcoal burning. These four activities constitute 84% of the reasons given by farmers for the increasing environmental degradation. The regression analyses provide some indication of factors associated with agricultural land expansion. The household study provided some insights on the agents of deforestation and to a limited extent how the increasing population is reacting to land famine.

Deforestation of woodlands in communal areas of Zimbabwe: is it due to agricultural policies?

Deforestation and woodland degradation are issues of great concern in Zimbabwe. The debate on these issues has identified a number of causes including expansion of arable land, demand for fuelwood and construction poles, and urban expansion. This paper examined how some policies aimed at improving agricultural production may be contributing to deforestation of woodlands in the communal and resettlement areas of Zimbabwe. Consideration was given to maize ( Zea mays L.), cotton ( Gosspium hirsutum L.) and sunflower ( Helianthus anuus L.); crops with appreciable land area in 1980–90. Regression analysis indicated that policies which improved marketing of grains, provision of credit (largely in form of farm inputs) and extension services, encouraged expansion of land under maize and less so under cotton. High nominal prices encouraged expansion of area under maize while decreasing real prices of cotton, if not reversed, had potential for reducing land under cotton. Increased fertilizer prices, through removal of subsidies as required by structural adjustment policies, had potential for reducing land under maize and sunflower. The driving force for sunflower and cotton production was partly based on the desire, by farmers, for non-declining revenues in successive years. During the same period, real producer prices for these crops were declining and demand for cash was increasing rapidly. The evaluated agricultural policies appeared to have been responsible for moderate expansion of land area under maize but more significant expansion of land under cotton and sunflower. These policies could have encouraged modest deforestation of woodlands in the Zimbabwean communal and resettlement areas in the period 1980–1995.

Livestock Supply Response in South Africa: An Investigation of Producer Price and Technology Dynamics

Livestock supply in South Africa is examined using an error correction model with a polynomial lag formulation applied to determine price and technology dynamics. Data from 1947 to 1995 were used for the analysis. Time series properties of the data were tested and short and long run elasticities were derived for variables influencing livestock supply. An average total lag effect on livestock output of 7 years was derived with respect to real livestock producer prices and 15 years with respect to livestock research and development expenditures. These results suggest that reductions in research expenditures will have a significant negative long run effect on output. Correcting for the decline in output, with a subsequent increase in research expenditures, will take several years to achieve due to the lagged effects, with a potential of 15 years of lost growth. An inelastic response to livestock prices was derived for both the short and the long run.

Free competition without sustainable development? Tanzanian cotton sector liberalisation, 1994/95 to 1997/98

This article summarises the results of fieldwork carried out in 1997/8 season on post‐liberalisation changes in the Tanzanian cotton sector. Developments in primary marketing, ginning and the export trade are reviewed on the basis of survey material. Market entry by private companies has been high, leading to considerable competition and slight increases in producers’ share of the world price. But real producer price and cultivation increases have not been sustained. Following changes in the input supply system, insecticide use has fallen sharply, along with the quality and underlying international price of the cotton crop. Tanzania's place in the world market has been re‐defined as a producer for a specific time‐based ‘market window’. This places a question mark over the sustainability of the sector's future, and by inference over policy reforms whose main emphasis is to increase competition.

Causes of bankruptcy amongst maize and extensive beef farmers in South Africa: 1970-1994

The number of maize farms and extensive beef farms annually declared bankrupt in South Africa rose sharply over the period 1970 to 1994. Principal components regression confirmed a priori expectations that maize farm and extensive beef farm bankruptcies were negatively related to annual rainfall (business risk factor), but positively related to the lagged aggregate farm debt/asset ratio and lagged real interest rates (financial risk factors). Maize farm bankruptcies also increased as lagged real maize and beef producer prices fell (business risk factors). Beef farm bankruptcies rose with lower lagged real beef producer prices and higher lagged real stockfeed subsidies and transport rebates (business risk factors). Part of the rise in maize and extensive beef farms failures between 1970 and 1994 can therefore be ascribed to changed agricultural price and macroeconomic policies

MAIZE MARKETING AND PRICING IN LESOTHO: IMPLICATIONS FOR POLICY REFORM / SAMEVATTING: MIELIEBEMARKING EN -PRYSBEPALING IN LESOTHO: IMPLIKASIES VIR BELEIDSHERVORMING

A study was conducted during 1994–1995 amongst policy makers, government officials, retailers and millers in Lesotho to review the maize marketing system and procedures for setting maize prices at producer, mill-gate and consumer levels. Set prices distort price signals which influence decisions to allocate and distribute resources to provide goods and services for markets. Lesotho is a net importer of maize grain, the major staple, implying that maize pricing and marketing policy affect food security. Results indicate flexible informal marketing channels, fixed formal marketing channels and declining real producer, mill-gate and consumer prices in recent years Falling real South African Maize Board export grain prices and evidence of subsidies to commercial Lesotho mills explain these price trends. Changes to the one channel formal marketing system and nationally administered price structure that would encourage an open market system with less restrictive interregional maize trade are recommended.

CAUSES OF MAIZE FARM BANKRUPTCY IN SOUTH AFRICA: 1970–1994 / OORSAKE VAN MIELIEPLAASBANKROTSKAP IN SUID-AFRIKA: 1970–1994

The number of maize farms declared bankrupt in South Africa rose sharply from 16 farms in 1970 to 205 farms in 1986 and then fluctuated around the 150 farm level in the early 1990's. Ordinary least squares regression and principal component analysis confirmed a priori expectations that maize farm bankruptcy was negatively related to the lagged real maize producer price and annual rainfall (business risk factors), but positively related to the lagged aggregate farm debt/asset ratio and lagged real interest rates (financial risk factors).