Global Food Security
An innovative seed industry is essential for sustainable growth in crop yields. However, recent mergers and takeovers in the global seed industry have attracted much debate in terms of their potential to stifle competition and innovation. A recent OECD study has collected new detailed information on the degree of concentration in markets for seed across a broad range of crops and countries. These data allow a more informed debate on the extent, causes, and potential effects of market concentration. The data indicate important differences across crops and countries in the level of concentration, but show no systemic evidence for harmful effects on prices or innovation.
Many developing economies suffer from a lack of reliable rainfall measurements due to a lack of funds and a shortage of equipment – such as gauges and radars. Even if countries are equipped with these monitoring instruments, they all have limitations. Rain gauges, meteorological instruments that collect falling water drops, only provide a very local observation. However, the intensity of rainfall can be completely different from one location to another, sometimes even if it's less than a few hundreds of metres away. Radars use radio waves to get precipitation estimates but they may not always be efficient. For example, their beams might get blocked in mountainous regions.
Kenya faces one of the most challenging years when it comes to food security. According to the Food and Agricultural Organisation, food security is achieved. when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life. Even before the COVID-19 pandemic knocked on its door, the country faced a devastating desert locust invasion. This added to constraints posed by excessive rainfall experienced from October 2019. The worst food insecurity that Kenya has faced in recent years was in 2017 and 2008. The food production deficit and food prices were their highest ever in these years.
[学术文献] The influence of crop insurance agents on coverage choices: The role of agent competition 进入全文
We examine how competition among crop insurance agents affects coverage choice in the federal crop insurance program. Agents may influence producers’ insurance decisions to maximize their total compensation. We develop a theoretical model of producer–agent interaction to examine how loss potential, agent compensation mechanisms, and market competition affect the coverage level selected. Using crop insurance unit‐level datasets from five states, we find evidence that agent market concentration and agents’ market share matter in the insurance coverage decisions of producers but that the economic significance of the influence is relatively small. Agent influence over coverage level, premium, and liability choice is generally positive but inconsistent across states, which may be attributable to differences in loss risk and agent compensation mechanisms.
[学术文献] Measurement errors in agricultural data and their implications on marginal returns to modern agricultural inputs 进入全文
The low uptake of modern agricultural technologies in sub‐Saharan African countries has encouraged researchers to revisit the returns to (or profitability of) these agricultural inputs. A related strand of literature is exploring the allocative efficiency of these factors of production in African agriculture. However, all these studies rely on self‐reported agricultural data, which are prone to nonclassical measurement errors, the errors in these data are correlated with the true values of variables of interest. In this article we investigate the implication of measurement errors in self‐reported agricultural input and production data on marginal returns to these modern agricultural inputs. We consider a generic two‐sided measurement error problem where both production and inputs can be measured with error, and these errors can be correlated. We employ both self‐reported and objective measures of production and plot size to compute output elasticities under these alternative measurement scenarios. We find that using self‐reported production and plot size overestimates output elasticities and hence marginal returns to modern agricultural inputs (including chemical fertilizer and improved seed). These results are noteworthy in terms of informing conventional technology diffusion strategies as well as in view of revisiting existing presumptions about the profitability of modern agricultural inputs.
Global Food Security
Many governments subsidize agricultural insurance for farmers. There are several reasons behind these subsidies, some having to do with market failures that constrain the development of private insurance markets, and some having more overt political and social objectives. While there would appear to be many contexts in which subsidized agricultural insurance has the potential to offer attractive benefits, experience shows that once introduced, well known challenges with the design and operation of agricultural insurance programs, poor design of subsidies, plus political dynamics can all contribute to disappointing results, an expensive draw on government budgets, and the creation of disincentive problems that lead to significant economic costs and inefficiencies, and in some circumstances, to environmental degradation. To avoid these problems, any insurance subsidy needs to be carefully designed to be “smart”, in the sense that it is cost effective in achieving its underlying purpose, minimizes disincentive problems, and does not become a growing financial burden on the government. Also, before subsidizing insurance, governments should first ensure that the basic public goods needed to create an enabling environment for insurance are in place, without which insurance markets cannot be expected to work well nor subsidies to achieve their intended purposes. This paper discusses these issues and proposes some best practice guidelines for the design and implementation of subsidized agricultural insurance.