European Review of Agricultural Economics

Di Falco, Salvatore; Lagerkvist, Carl-Johan; Nauges, Céline; Richards, Timothy J

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad022

In this article, we celebrate the first 50 years of the European Review of Agricultural Economics. We intend to convey some understanding of how the interests of European Review of Agricultural Economics (ERAE) readers change over time as a reflection of how shifting interests show up in our research. To document how the issues, methods, and content of the ERAE evolve over time, we summarise the content of the top-cited articles by decade. We conclude with a summary, and our thoughts as to where applied economics research in the Review may go over the next 50 years.

Just, David R

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad019

The past decade has seen the transition of agricultural economics from perceived irrelevance to being seen as key to saving the world from an array of grand challenges. These challenges include global climate change, non-communicable diseases, hunger and poverty. These challenges require international cooperation. Such cooperation is undermined by global conflicts in which agricultural trade is disrupted either to incentivise policy change or through conflict. The world is vulnerable if trade can be exploited for political power or disrupted by other actions taken for political power. Agricultural economists are uniquely situated to address these issues.

Finger, Robert

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad021

Digitalisation is rapidly transforming the agri-food sector. This paper investigates emerging opportunities, challenges and policy options. We show that digital innovations can contribute to more sustainable and resilient agricultural systems. For example, digital innovations enable increased productivity, reduced environmental footprints and higher resilience of farms. However, these optimistic outcomes of increasing digitalisation of the agricultural sector will not emerge on their own, but this development comes with several challenges, costs and risks, e.g. in economic, social and ethical dimensions. We provide policy recommendations to explore opportunities and avoid risks. Moreover, we discuss implications for future research in agricultural economics.

Deconinck, Koen; Jansen, Marion; Barisone, Carla

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad018

Powerful long-term drivers are increasing both the demand and supply of quantified environmental impact information in food systems. The trend is fast (with many initiatives underway) and furious (presenting a confusing landscape) but has so far received little attention from economists. Better information can inform public and private efforts to reduce environmental pressures. However, the use of different methodologies and reporting requirements could lead to a fragmented landscape. Moreover, there is a risk that poor producers will be disproportionately affected. We discuss the trend, its drivers, impacts and potential pitfalls, as well as the many open research and policy questions.

Roosen, Jutta; Neubig, Christina M; Staudigel, Matthias; Agovi, Herdis

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad020

Research has highlighted the need for drastic shifts in eating patterns towards healthy and sustainable diets. One element would be the successful introduction of new or reformulated products. This paper discusses the opportunities for studying the role of sensory properties in determining food choices. We illustrate the methodology with the example of mueslis in Germany. We span the sensory space using the check-all-that-apply method and analyse consumer demand in a discrete choice experiment. We identify two sizable segments with a preference for less sweet mueslis. Future research avenues for the combination of economic and sensory studies are discussed.

Zezza, Alberto; McGee, Kevin; Wollburg, Philip; Assefa, Thomas; Gourlay, Sydney

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad017

The Coronavirus disease pandemic has disrupted survey systems globally and especially in low- and middle-income countries. Phone surveys started being implemented at a national scale in many places that previously had limited experience with them. As in-person data collection resumes, the experience gained provides the grounds to reflect on how phone surveys may be incorporated into survey and data systems in low- and middle-income countries. Reviewing evidence and experiences from before and during the pandemic, the paper provides guidance on the scope of and considerations for using phone surveys for agricultural data collection and the integration of phone interviews with in-person data.

Chabé-Ferret, Sylvain; Le Coent, Philippe; David-Legleye, Valentin; Delannoy, Véronique

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad014

Payments for Environmental Services (PESs) are increasingly used to foster farmers’ adoption of greener practices, but their effectiveness is often undermined by low enrollment. In a large randomized field experiment (N = 20,000), we test several non-monetary incentives to increase enrollment into the French implementation of the Agri-Environmental Schemes program of the European Union. We find that sending 10,000 information letters triggers the enrollment of 75 ± 52 farmers at a cost of 102 $\pm\ $71 Euros/new enrollee. Pre-stamped reply forms increase contacts with caseworkers but fail to raise enrollment. Testimonies by other farmers seem to decrease the effectiveness of the letters. Diffusion effects could increase the impact of our non-monetary incentives by 40% to 50% and decrease the cost of an additional enrollee by around 30%.

He, Xinyue; Bian, Siyu; Serra, Teresa

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad026

The existence of a negative variance risk premium on agricultural futures contracts suggests that market participants pay to hedge unexpected increases in the volatility of these contracts. In this paper, we decompose the variance risk premium in corn and soybeans markets into jump and diffusive components using options and futures data from 2009 to 2021. We find that market participants on average only pay to hedge unexpected increases in jump volatility but not those in diffusive volatility. Furthermore, growing season uncertainty and the arrival of United States Department of Agriculture (USDA) announcements play important roles in driving the market’s fear of unexpectedly large price jumps.

Bakas, Dimitrios; Konstantakopoulou, Ioanna; Triantafyllou, Athanasios

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad015

We empirically investigate the impact of commodity price uncertainty on US and Euro Area (EA) trade flows. Our results indicate that the response of US and EA trade flows to commodity uncertainty shocks is larger, in magnitude and persistence, when compared with the respective impact of commodity supply and demand shocks. Moreover, our analysis shows that a one-standard deviation shock in commodity price volatility has a higher (in magnitude) and more persistent effect on trade when compared with the respective shocks in exchange rates and commodity prices. Finally, an uncertainty shock in various agricultural and metals markets has a similar negative impact on trade flows to that of energy uncertainty shocks.

Latruffe, Laure; Niedermayr, Andreas; Desjeux, Yann; Dakpo, K Herve; Ayouba, Kassoum; Schaller, Lena; Kantelhardt, Jochen; Jin, Yan; Kilcline, Kevin; Ryan, Mary; O’Donoghue, Cathal

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad023

In order to tackle climate change and biodiversity loss, the European Union (EU) promotes extensive farming. However, identifying such farms across countries and assessing their performance for policy purposes remains challenging. This paper combines a latent class stochastic frontier model (LCSFM) with a novel nested metafrontier approach. The resulting model enables the identification of intensive and extensive farms across countries, estimation of farm efficiency and identification of different technology gaps. Based on Farm Accountancy Data Network data of French, Irish and Austrian dairy farms,we find poorer environmental but better economic performance of intensive farms, compared to extensive farms. The largest productivity differences stem from technology gaps and not from inefficiency. The approach enables a more nuanced analysis of sources of inefficiency to assist policy design for future green payments in the EU.

Čop, Tajana; Cerroni, Simone; Njavro, Mario

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad025

The income stabilisation tool (IST) is the latest tool proposed by the European Union (EU) to manage agricultural risks. It aims at stabilising farm income by compensating income losses. Using a discrete choice experiment, this paper investigates grapevine farmers’ acceptance of the IST in Croatia and tests whether behavioural factors such as risk preferences, probability weighting and subjective probabilities related to future farm income explain acceptance of this new tool. Results suggest that there is demand for the IST. Pessimistic farmers are more likely to participate in the IST than others, suggesting that subjective probabilities influence farmers’ decisions about agricultural risk management.

Nicholson, Charles F; Eaton, Michael; Gómez, Miguel I; Mattson, Neil S

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad016

We assess landed costs and selected environmental metrics for field-based and controlled-environment agriculture greenhouse (GH) supply chains for leaf lettuce delivered to New York City. Landed costs for a GH are 46 to 174 per cent higher than field production, with the lower value for an automated GH located in the peri-urban area. Energy use and global warming potential per kg lettuce delivered were larger for the GH, particularly if located in a peri-urban area. Water use was much higher for the field-based supply chain. Controlled-environment GH technologies will require further development to meet goals for lower costs and environmental impact.

Mérel, Pierre; Qin, Zhiran; Sexton, Richard J

2023 European Review of Agricultural Economics

doi: 10.1093/erae/jbad024

Public policies increasingly support the expansion of organic agriculture as part of a menu of food and environmental initiatives. A little-studied yet crucial element of such expansion, especially in light of scientific evidence on lower yields of organic crops, is its impact on overall food production and food prices, especially for poorer households. In this paper, we first establish a positive empirical relationship between countries’ propensity to produce and consume organic foods and their per-capita income. Such correlation suggests that, even if rich countries’ consumers can benefit from an increase in the organic farmland share, poor countries’ consumers would likely face higher conventional food prices. We then develop and calibrate a model of world food demand and supply to assess the implications of a policy-driven expansion in organic farmland. Our results for four major grains and oilseeds show that raising the organic cropland share in rich countries from 3 to 15 per cent increases food prices in poor countries by up to 6.3 per cent, with central values of 1.2–2.5 per cent, and a commensurate reduction in consumer welfare. Model parameterisations indicate that farmers in poor countries benefit from higher crop prices, while consumers in rich countries are largely unaffected and sometimes benefit. In all cases, poor countries’ consumers bear most of the distortion burden. In our preferred parameterisation, a 3 per cent increase in cropland in rich countries is needed to offset the food price increase in poor countries.