Research Topics in Agricultural and Applied Economics

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Many fields are increasingly applying Neuro-fuzzy techniques such as in model identification and forecasting of linear and non-linear systems. This chapter presents a neuro-fuzzy model for forecasting milk production of two producers. The model utilizes a time series of daily data. The milk forecasting model is based on Adaptive Neural Fuzzy Inference System (ANFIS). ANFIS uses a hybrid learning technique that combines the least-squares method and the back propagation gradient descent method to estimate the optimal milk forecast parameters. The results indicate the superiority of ANFIS model when compared with two conventional models: an Autoregressive (AR) and an Autoregressive Moving Average model (ARMA).

The economics of contracts has undergone major developments in the recent decades. At the same time, the issue of co-ordination among actors in the same product chain through contractual instruments has attracted significant attention. In addition, the recent volatility of agricultural prices has made the role of contracts in risk allocation more important across different stages of the production chain. The paper explores the role of production contracts in the co-ordination of agri-food chain, considering evidence from the particular case of the durum wheat chain in Italy. After a review of the literature and brief examination of the sector and institutional context of Italian wheat production, the paper considers the present and potential role of production contracts, through a Delphi exercise. Based on this, proposals for action priorities (policy) are discussed along with an agenda for future research. The outcome of the Delphi exercise confirms the perceived need of improving the use of contracts in the Italian wheat sector. It also confirms the difficulties in addressing this issue. Solutions and needs for further research are identified at two main levels: a) detailed contract design; and b) wider chain governance.

This study examines technical efficiency and productivity growth of Greek farms participating in the 1994 European Union Farm Credit Programs (1994-EU-FCP), i.e. regulation 2328/91. In this paper, two farm-level economic data sets are used, i.e. the crop and the livestock data set, where each one consists of two different groups of farms: one group contains farms participating in the 1994-EU-FCP while the other one contains non-participating farms. The data sets are observed over the 1993 and 1997 years. The paper uses the approach developed by Simar and Wilson (1998a, b) to bootstrapping both DEA efficiency measures and Malmquist productivity indices. Furthermore, the present paper uses the Malmquist index decomposition proposed by Simar and Wilson (1998b) and Zofio and Lovell (1997) to investigate the sources of productivity change. The technical efficiency score results indicate that, in terms of the crop oriented farms, the program failed to increase the efficiency of the participated farms even though the most efficient farms entered the 1994-EU-FCP. In contrast, in terms of the livestock oriented farms, the program managed to increase the efficiency of the participated farms though less efficient farms entered the program. The total factor productivity growth results, in terms of crop-oriented farms, show statistically significant decline of productivity for the group of program farms but a statistically significant increase for the group of non-program farms. The total factor productivity growth results, in terms of livestock oriented farms, show a statistically significant increase of productivity for the group of program farms but no change for the group of non-program farms.

The Common Agricultural Policy (CAP) of the European Union (EU) has been highly political and social controversy, within the EU as well as at international level. However, the reforms on the institutional structure have not been frequently analysed. This paper, based on the Institutional Innovation Theory, examines the role of different exogenous and endogenous factors which have been boosted or slowed down, the five CAP reforms. According to these factors we analyse three key issues in the EU general political system, two topics in the EU domestic-economic system and the external pressures. Later, these factors are considered on a theoretical approach applying investment theory and expected utility maximization by means of the net present value model and dependency relations. The main results show that role played by the EU institutional structure is fundamental as a limited factor, and the external pressures and citizen’s acceptance of this policy are an important boost factor.

The aim of this paper is firstly to show how the measures introduced by the European regulation on manure management are incorporated into the theoretical analysis framework for studying the issue of nonpoint externality and especially, agricultural runoff. The model is extended because only some of the polluting emissions at the origin of diffuse pollution are regulated by the Nitrates Directive. More specifically, the model represents the standard that limits the spreading of organic manure to 170 kg/ha as a production right assigned to each farm. Secondly, this paper proposes an empirical model in which the theoretical assumption that productive abilities are fully exploited is relaxed. In order to describe the disparity that exists between individual situations, an empirical model represents the production technology by means of a directional distance function. Finally, the aggregation properties of the directional distance function are used to simulate the practice of looking for off-farm lands as a means of complying with the standard. We look at how land can be allocated among producers in such a way as to combine the disposal of manure in accordance with the limit of the Nitrates Directive with an improvement in the productive and environmental efficiency of all farms. Using a sample of French pig farms, results indicate only a low potential for a reduction in nitrogen pollution based on the reduction in productive inefficiencies and the allocation of spreading lands among farmers in a same area.

Over the last few years, a number of events have produced deep change in Spanish agriculture. The agreements ensuring from the negotiations within the World Trade Organization (WTO), the new exigencies of the demand for reducing the surpluses of certain food and feed crops (cereals, oil-seeds, sugar beet…) and the Common Agricultural Policy (CAP) expenses, the reform of CAP and the different Common Markets Organizations (CMO’s), along with the vocation to produce (greatly influenced by geo-climatic factors), have led to a deep and long-lasting crisis of the sector in many important agricultural regions in Spain, as is the case in Castile and Leon. This crisis implies depopulation and alteration of the population structure and the rural environment, with subsequent environmental, socio-cultural and territorial consequences. Within this framework, energy crops are one of the scarce local productive orientations which could allow Castile and Leon farmers to produce an output demanded by the markets. This paper examines the current situation and the possibilities of development for this sector, using the Rural Rapid Appraisal (RRA) and Strengths, Weaknesses, Opportunities, Threats (SWOT) methods, in order to identify and assess the profitability of the main energy crops as well as the technical, socio-cultural, political and economic barriers for introducing these crops in the local productive farming sector. The study also provides an evaluation of the last energy and CAP measures and an outlook for future market developments and policy recommendations.

This paper incorporates interdisciplinary New Institutional and Transaction Costs Economics and analyzes the governance of agro-ecosystem services in Bulgaria. Firstly, it presents a comprehensive framework of analyses of environmental governance including: definition of agroecosystem services and governance; specification of governance needs and spectrum of governing modes (formal and informal institutions, market, private, public and hybrid forms); assessment of efficiency of different modes of governance in terms of their potential to protect diverse eco-rights and investments, assure a socially desirable level of agro-ecosystem services, minimize overall costs, coordinate and stimulate eco-activities, meet individual and social preferences and reconcile conflicts of related agents etc. Secondly, it identifies and assesses the governance of agro-ecosystem services in Bulgaria. It proves that post-communist transition and EU integration brought about significant changes in the state and the governance of agro-ecosystems services. Newly evolved market, private and public governance has led to a significant improvement of the part of agro-ecosystems services introducing modern eco-standards and public support, enhancing environmental stewardship, disintensifying production, recovering landscape and traditional productions, diversifying quality, products and services. At the same time, the novel governance is associated with new challenges such as unsustainable exploitation, lost biodiversity, land degradation, water and air contamination etc. Moreover, it demonstrates that implementation of the EU common policies would have no desired impact on agro-ecosystem services unless special measures are taken to improve management of public programs, extend public support to dominating small-scale and subsistence farms.

When included as part of a larger emissions rights trading system, carbon offset projects can automatically achieve a given reduction of emissions in a cost-effective manner. One major concern with this system, however, is the risk of emissions reversal-the deliberate or accidental release of carbon back to the atmosphere long after carbon credits have changed hands. This downside risk may adversely affect the market value of offset credits and undermine the integrity of the carbon trading system. To address this weakness, at least two financial responsibility rules have been proposed. One calls for the imposition of liability, ex post, upon project developers. The other alternative, an ex ante measure, requires that project developers have adequate liability insurance coverage prior to undertaking any offset projects. Taking the view that project developers can control the severity of financial losses arising from reversal and assuming a negligence rule of liability for harm, this paper employs the methods of mechanism design to examine the impact of ex-post liability rules and ex ante liability insurance requirements on incentives to reduce risk. We find that the relative ranking of these two rules crucially depends on the extent of uncertainty regarding the legal standard under liability rules: if uncertainty regarding the legal standard is sufficiently large, then incentives are more pronounced under insurance rules than under liability rules; if the uncertainty regarding the legal standard is sufficiently small, however, then the converse is true.

This paper presents the results of a Choice Experiment (CE) conducted to estimate the values derived from a highway construction project in Greece. To account for preference heterogeneity conditional logit with interactions and random parameter logit models are estimated. The results indicate that individuals have significant values for travel time savings, percentage decrease in traffic accidents, percentage decrease in traffic related emissions and landscape modifications. Models where the attributes are interacted with socioeconomic variables perform better and produce lower welfare estimates compared to models without interactions with important implications for cost benefit analysis.

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