Li Li, Atsushi Tsunekawa, Ian MacLachlan, Guicai Li, Atsushi Koike and Yuanyuan Guo
The purpose of this paper is to examine the factors (including conservation payments) that influence household decisions to participate in off-farm work and estimate the impact of…
Abstract
Purpose
The purpose of this paper is to examine the factors (including conservation payments) that influence household decisions to participate in off-farm work and estimate the impact of participation on household welfare under the auspices of the Grain for Green (GfG) program.
Design/methodology/approach
The authors used survey data from 225 farm households on the Loess Plateau and addressed the possible sample selection and endogeneity problems by employing a jointly estimated endogenous switching regression (ESR) model.
Findings
The findings of this paper are as follows: off-farm participation is positively related to households’ educational attainment and negatively related to their land resource endowment and the presence of children; participation in off-farm work exerts positive effects on household income and per capita household income, but negative effects on farm productivity; and conservation payments show no significant impact on off-farm participation, no significant impact on any of the three household welfare indicators for off-farm non-participant households, but a significantly negative impact for off-farm participant households.
Originality/value
This paper makes two contributions. First, the authors address the selection bias and endogeneity problem of GfG participating households by employing the ESR method and explicitly estimating the treatment effects of off-farm participation on their household welfare. Neglecting these problems leads to biased estimates and misleading policy implications. Second, this analysis stresses the important role of government in reducing market or institutional failure and other barriers that impede farmers’ efficient allocation choices instead of compensating households for conserving sloping land, shedding new light on the most effective policy options to achieve the program’s goals.
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Kai Liu, Masato Yamazaki and Atsushi Koike
The purpose of this paper is to compare the Armington elasticities for world average values and country-specific values and obtain evidence for whether the world average…
Abstract
Purpose
The purpose of this paper is to compare the Armington elasticities for world average values and country-specific values and obtain evidence for whether the world average elasticities and the “rule of two”, which have been applied in many papers, are accurate for cereals in trade policy studies related to an individual country.
Design/methodology/approach
The authors use panel data with a nested model to estimate and compare Armington elasticities based on world average values and country-specific values from 10 countries and regions.
Findings
The results suggest that cereals’ elasticities vary between world average values and country-specific values, and the “rule of two” is not strictly applicable. In fact, the “less than two” concept fits well in many cases.
Originality/value
This study sheds light on the effects of country heterogeneity on the elasticities and the accuracy of using world average elasticities in a trade policy study for an individual country. In addition, this paper offers estimated values of country-specific elasticities for 10 countries and regions.
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Kai Liu, Masato Yamazaki, Atsushi Koike and Yueying Mu
Corn, which has the highest domestic production, planting area and consumption, is the top cereal in relation to demand and supply in China. However, the comparative advantage of…
Abstract
Purpose
Corn, which has the highest domestic production, planting area and consumption, is the top cereal in relation to demand and supply in China. However, the comparative advantage of China in corn has continuously deteriorated in recent years and based on the recent situation and possible supply and demand trends, it is widely accepted that a corn self-sufficiency rate of 95% is difficult to achieve. Under current import-restriction policies, corn may stand at the crossroads of reforms to solve its predicted insufficient supply. In this study, the authors analyse the necessity of relaxing trade restrictions on corn in China and explore the effects of trade restrictions by reducing tariffs and expanding tariff-rate quotas on corn and related industries and the welfare change caused by possible relaxations.
Design/methodology/approach
The authors construct a computable general equilibrium (CGE) model and design nine scenarios for the analysis.
Findings
The results show that relaxations of import restrictions are probable methods to meet the aim of sufficient corn supply during shortages. They are simulated to reduce corn's domestic production and price, increase import and import prices and lead to a decline in self-sufficiency but benefit the production of corn-related industries of corn. The results also imply that expanding the quota is a better method for releasing trade restrictions in China.
Originality/value
The comparative advantage of China in corn deteriorated with an increase in prices. Based on the current situation and possible trends of supply and demand, the referenced goal of achieving 95% corn self-sufficiency appears difficult, implying that reliance on imports is probably imminent and vital. This study provides simulation results in future scenarios and offers policy implications for China's corn trade policies.