Primary food producers are permitted to bargain as a group for higher prices. Supply response, however, is critical to the long-run success of producer cartels. This article presents a model that elucidates that role of supply response in agricultural price bargaining when no overt action is taken to limit quantity and participation in the cartel is voluntary. Free-riding, for example, is seen as having a dual nature: it undermines the cartel's influence at the negotiating table but it enhances the cartel's ability to sustain a negotiated price increase by attenuating supply response. That price bargaining can result in significant transfers from processors to producers when demand is inelastic and supply is uncontrolled is highlighted in the empirical application.

Climate change is one of the largest threats for biodiversity as changing climatic conditions often make existing habitat sites less suitable. This poses new challenges for species conservation, in particular in agricultural landscapes, where climate change may also induce modifications in agricultural land use. To conserve species in agricultural landscapes, agri-environment schemes (AES) which compensate farmers for implementing conservation measures are commonly used. However, current research on the cost-effective design of AES largely ignores necessary adaptations of conservation measures given climate change. We develop a climate-ecological-economic (CEE) model to examine how the cost-effective design of AES has to be modified under climate change. We apply the model to the conservation of eight meadow bird species in Northern Germany and determine the cost-effective conservation measures under recent and future climatic conditions. We find that the timing of conservation measures in the AES needs to be changed in the RCP8.5 scenario given the species’ phenological adaptations and the impact of extreme events (inundations) on costs. The novelty of the research lies in the development of a CEE model which considers both spatial and temporal changes in costs and benefits to develop recommendations for the cost-effective design of AES under climate change.

This paper estimates welfare losses in thirty-eight U.S. food and tobacco industries at the four-digit SIC level, then relates such losses to market structure and conduct variables to identify the welfare loss determinants. Empirical findings indicate that these losses are higher in markets characterized by high export intensity, high advertising expenditures, economies of scale, mergers and acquisitions, and market concentration. In addition, losses are larger in industries that sell finished consumer products and face lower import competition.

The growth of the poultry industry in Arkansas has exploded in the past decade. As a result, approximately 1.5 million tons of litter are produced every year. Concerns about possible contamination of ground and surface water from land applications of poultry litter have been raised. This paper compares four policy scenarios in terms of their efficiency and practicality to manage land applications of poultry litter. The results indicate that a litter tax per ton of litter applied could achieve the same level of litter control as that of a land tax on litter applications, but at a lower tax rate.

With the passage of the Dairy and Tobacco Adjustment Act of 1983, dairy fanner investment in product research, nutrition education, advertising, and promotion in the United States increased from $60 million to $200 million annually. A key decision faced by boards managing these funds is how best to allocate available advertising funds among the various dairy products. In this paper an economic model is developed that shows the allocation of funds among products that would maximize sales in a given market. The model is applied to the New York City market with results suggesting that over the study period diverting funds from fluid milk to cheese advertising would have enhanced milk-equivalent sales in the market by as much as 1.17% or 8.21 million gallons annually. Alternatively, the model suggests that the same sales level could have been achieved with a different allocation of funds resulting in an estimated 14.6% savings in the amount spent advertising the two products.

Because of public health concerns, regulators are considering requiring post-harvest treatment of halfshell and shucked oysters by wholesalers and processors. Two recently developed post-harvest treatment technologies may actually reduce the costs of producing shucked oysters, but would increase the costs of halfshell oysters. An interregional model of the wholesale oyster industry is developed to estimate the effects of treatment requirements on prices, output, and employment. If post-harvest treatment is required for all Gulf oysters, price increases are estimated to be less than 20% and, in some cases, prices decrease. Results indicate producer and consumer losses in the halfshell market are partially or more than offset by gains in the shucked market.

Legislative authorization for the Livestock Mandatory Reporting Act of 1999 was renewed in October of 2006. One of the cited justifications for implementing mandatory reporting was that the voluntary reporting system for the slaughter cattle cash market was unable to provide accurate and timely market information. We extend the spatial market analysis literature by developing a methodology for detecting distortions in spatial relationships across related price series. Using spatially linked regional markets, we compare state-level mandatory price-reporting data to the U.S. Department of Agriculture voluntarily reported state data to determine if the spatial relationship between price-reporting mechanisms was disrupted by market distortions prior to implementation of federal mandatory price reporting. We found no empirical evidence of system failure; therefore, we conclude that market thinning or noncompetitive behavior had not reached the level necessary to disrupt the ability of the voluntary price-reporting system to provide timely and accurate price information.

We present a game-theoretic model of a firm’s production decision to analyze the conditions under which the firm would engage in sustainable practices when there exists a certification agency that can audit the firm. Our results show that when the certification agency is firm-owned or when it is an independent, profit-maximizing entity, then there is no equilibrium in which the firm chooses to produce in a sustainable manner. We also present real-world examples from the apparel and footwear industry, as well as the mining industry, that are consistent with our theoretical results. We consider what would happen if the certification agency is government-operated or a non-profit organization with a mandate to monitor the firm’s production process. We show that – combined with tax incentives or subsidies for the firm if necessary, and greater specificity regarding what is sustainable – there exists an equilibrium in which the firm would choose to engage in sustainable production in this case. We analyze extensions of the model to examine conditions under which the phenomenon of greenwashing can arise as an equilibrium outcome. We also propose a “bounty system” that the government can implement to incentivize monitoring of firms’ production processes, and we show how such a policy can induce more sustainable production practices by the firm.

This paper examines the petroleum industry's willingness to participate in conservation agreements for the lesser prairie chicken, a candidate for listing under the Endangered Species Act (ESA). Voluntary conservation agreements with assurances (VCAAs) can incentivize habitat conservation and sustain economic development. Using data on oil and natural gas wells in Kansas and Oklahoma, I develop a discrete choice model to examine company preferences for locating wells and participating in VCAAs for the lesser prairie chicken. Participation in VCAAs is low, but I find participating wells are concentrated in areas with the most crucial habitat.

This study estimates demand for wheat differentiated by classes using a dynamic AIDS model for the United States and the European Union (EU). The results suggest that imported wheat is more price responsive than domestic wheat in the U.S. market but not in the EU market. This may suggest that the Canadian policy that reduces prices of Canadian wheat in the U.S. market or U.S. export subsidies that raise prices of U.S. wheat could be expected to give rise to substantial substitution of Canadian for U.S. wheat. It is also found that in the EU, complementary relationships exist between spring and other wheat groups. This complementary relationship between the lower and higher quality wheat in the EU is not surprising because EU millers blend cheaper wheat such as EU common wheat and U.S. other wheat with high protein (spring) to obtain the preferred characteristics.

Perspective is very important in understanding the area of food safety. This importance is illustrated by a favorite cartoon of mine that features an older, experienced mouse giving advice to a young mouse. The older mouse, in wrapping up, says to the younger, “… and stay away from scientists—they cause cancer.” Facing an avalanche of information on links between diet and health, consumers may, in frustration, sympathize with the mouse's view, and are having some difficulty sorting out which are the important cause-and-effect relationships. Government and industry also are struggling to develop a coherent approach to food safety and nutrition.

The relationships between intersectoral export and local employment and regional economic growth are analyzed in a long-run equilibrium framework. Dynamic location quotients decompose regional employment into export and local components for multiple sectors. Johansen's Full-Information Maximum Likelihood (FIML) approach is used to identify the existence and resultant rank of the co-integrating relationship between sectoral export and local employment in West Virginia's four metropolitan areas. Empirical results indicate inter-sectoral basic and non-basic employment form a co-integrating system of equations. Furthermore, this analysis shows that inter-sector shocks to local and export employment may cause multipliers to be positive or negative in magnitude.

Economic and environmental analyses of manure handling systems have implications for programs to regulate agricultural nonpoint sources of water pollution and programs to subsidize manure handling practices. Previous economic analyses in the literature are discussed. Manure systems are evaluated in a consistent framework to determine construction and operating costs. The effect of soil type on nutrient conservation is examined for two hypothetical farms. Dissolved phosphorous runoff is estimated for the farms varying storage capacity and soil type. Costs of phosphorus reduction by handling system, housing type and soil type are examined. Conclusions for cost-sharing policy are drawn.

This paper summarizes some results of a Sea Grant-funded economic input-output study of marine-related activity in the Southern New England Marine Region. Data were obtained from 390 personal interviews; in addition, a wealth of secondary data was used. Type I and Type II income and employment multipliers were estimated for each of the nineteen marine-related industries included in the model. The results provide a basis to assist analysts concerned with assessing the impacts on regional income and employment of marine-related policies or developments proposed for the Region.

A theory-based participation model is developed using the assumptions of perfect capital markets and perfect information. Given this specification it is shown that participation in a PDR program is always equivalent in present value terms to selling the land, and is always at least as good as not participating and remaining in farming.

In order to investigate participation rates in the Maryland PDR program a less restrictive model is developed which relaxes the perfect capital markets assumption. It is found that a PDR program is most likely to be successful in regions characterized by relatively low levels of development pressure, and least likely to be successful in areas experiencing high rates of growth or areas that are not undergoing development pressure.

This paper illustrates differences in estimated returns to public agricultural research investments for the U.S. and the Northeast when value-added (VA) as opposed to gross production (GP) functions are estimated. Commodity groups considered are dairy, poultry, other livestock, and cash grains. Sizable differences are evident in returns estimated with VA as opposed to GP functions, with the VA estimates generally being larger. Cash grains research yields the largest returns at the margin. Dairy research is more productive in the Northeast than the rest of the country.

While access to reliable electricity can significantly constrain industrial production, little is known as to how unreliability impacts firm level productivity. This is a particularly salient issue for firms in developing countries, where electricity provision is still unreliable and self-generation is costly. This paper analyzes the impact of electricity provision on productivity, instrumenting for electricity demand with district level solar irradiance. Results indicate that firms exhibit decreasing productivity in the initial stages of electricity adoption that decreases over time. Furthermore, I find that unreliability negatively impacts productivity initially and over time, and this effect is larger for smaller firms.

Withdrawal from the Trans-Pacific Partnership (TPP) could be costly for U.S. beef exports to Japan given existing trade agreements such as the Japan-Australia Economic Partnership Agreement (JAEPA). We estimate the demand for imported beef in Japan by source and product and assess the impact of tariff reductions on exporting countries. Our results suggest JAEPA will result in considerable increases in Australian beef exports to Japan, largely at the expense of the U.S. beef. However, similar tariff reductions for U.S. beef could eliminate these negative effects and even result in a net increase in beef imports from both countries.

Impacts of historic and cultural amenities on property values and the economy have not been widely studied in part because of problems isolating statistical effects using nonmarket valuation and lack of study areas. Three jurisdictions in Virginia containing major historic sites provide a unique setting in which to isolate the effects of historical amenities on residential property values using revealed preferences and quantify their economic benefits. We find that historic areas provide both open space and historic amenities. Furthermore, being adjacent to a historical area is not a positive benefit on average, perhaps because of activity and congestion associated with tourism. Residing close to such areas is valuable to buyers.

Decreased care or offsetting behavior by potential victims can reduce or reverse benefits provided by some safety policies. We explore reasons for offsetting behavior associated with food safety policies using a survey of a nationally representative sample of almost 3,000 consumers. Results reveal that positive food safety information can change consumers’ risk perceptions and attitudes, causing them to be less vigilant and to consume more of relatively unsafe foods. This behavioral anomaly plausibly explains ongoing incidences of food poisoning after a meat processing facility implements a pathogen-reduction hazard analysis of critical control points (PR/HACCP).