China Agricultural Economic Review

Xian Xin; Tun Lin; Xiaoyun Liu; Guanghua Wan; Yongsheng Zhang

2013 China Agricultural Economic Review

doi: 10.1108/CAER-03-2013-0049

Purpose – This paper aims to investigate the impacts of climate change on the People's Republic of China's (PRC) grain output using rural household survey data. The paper highlights the regional differences of impacts by estimating output elasticities (with respect to climate change) for different grain crops and different regions. Design/methodology/approach – The paper uses production function to investigate the responses of grain output to climate variables as well as other traditional input variables. The use of production function approach allows us to do away with the competitive land market assumption as required in the Ricardian approach. The paper will use interaction terms of climate variables and regional dummies to capture the regional differences of climate change impact on grain crops. Findings – The results indicate that the overall negative climate impacts on the PRC's grain output range from −0.31 to −2.69 percent in 2030 and from −1.93 to −3.07 percent in 2050, under different emission scenarios. The impacts, however, differ substantially for different grain crops and different regions. Originality/value – This paper addresses the limitations of existing literature by highlighting regional differences and crop varieties using the most recent nationwide rural household survey data. The results indicate pronounced regional differences and crop differences in the impacts of climate changes on PRC's grain output.

Stefan Meyer; Xiaohua Yu

2013 China Agricultural Economic Review

doi: 10.1108/CAER-05-2012-0045

Purpose – Because of large time lags between the production decision, completion and sale of output, any uncertainty during the process of production, such as bad weather, disease or financial crisis, can affect the prices within food markets systematically. Therefore, the paper aims to analyze the influence of production uncertainties on world's wheat and corn prices. Design/methodology/approach – In a specially designed two‐step method, at first, the contributions of deterministic and uncertainty factors to wheat and corn production in around 100 countries are decomposed. Then, a panel model is applied to estimate the combined impact of each type of factors on the prices. Furthermore, the authors decompose the explained variances of the panel models in order to determine the importance of each type of factors for price adjustments. Findings – The uncertainties in wheat production do significantly affect both wheat and corn prices on a global scale, whilst those of corn do not. Moreover, the variance decompositions reveal that deterministic factors contribute much more to the explanation of world food prices than indeterministic factors. Practical implications – As deterministic factors are much more important than uncertainty factors for explaining market price movements, farmers should organize themselves to coordinate production in order to stabilize world food prices. Originality/value – The paper proposes a simple methodology, which enables scholars to integrate production uncertainties into food price analyses.

Gucheng Li; Zhongchao Feng; Liangzhi You; Lixia Fan

2013 China Agricultural Economic Review

doi: 10.1108/CAER-09-2011-0108

Purpose – Whether there exists an inverse relationship (IR) between farm size and its efficiency remains a hotly debated question among agricultural economists. In most studies to date, farm efficiency is measured by land productivity. Thus, the IR actually measures the relationship between farm size and land productivity. The purpose of this paper is to examine and understand the IR from a novel angle by using multiple definitions of farm efficiency indicators like labor productivity, profit ratio, total factor productivity (TFP) and technical efficiency (TE). Design/methodology/approach – By using the farm‐level panel data from Hubei province in China from 1999 to 2003, this paper employs the two‐way fixed effect model of panel data and the stochastic frontier analysis of Battese and Coelli model to investigate the relationship between farm size and its production efficiency derived from the multiple definitions of production efficiency indicators including land productivity, labor productivity, profit ratio, TFP and TE. Findings – The study confirmed the IR between land productivity and farm size, as in many formal studies. However, the relationship between farm size and other agricultural efficiency indicators may be positive, negative or uncorrelated at, depending on how the farm efficiency is defined. Therefore, the paper concluded that the relationship between farm size and its production efficiency is mixed. This paper provides economic explanations for the IR through the comprehensive study using the expansion of agricultural efficiency indicators. Practical implications – Because different agricultural efficiency indicators have different policy implications for China's future agricultural and land policy, the findings have tremendous policy implications, particularly in terms of the current debate on large or small farm development strategy, the also so‐called “go big or small” agricultural strategy. In this sense, the Chinese household responsibility system has played a critical role in its agriculture and will continue to play a critical role in terms of social security and social equality. Any reform to this system should proceed with caution. Originality/value – While most existing studies only try to explain the IR from the perspective of land productivity, this paper attempts to propose a novel angle to examine the IR by using multiple definitions of agricultural efficiency and hopes to find some new conclusions.

Chih‐Chun Kung; Bruce McCarl; Xiaoyong Cao; Hualin Xie

2013 China Agricultural Economic Review

doi: 10.1108/CAER-01-2012-0002

Purpose – This study aims to explore Taiwan's potential for bioenergy production using feedstocks grown on set‐aside land and discusses the consequent effects on Taiwan's energy security plus benefits and greenhouse gas (GHG) emission. Design/methodology/approach – The Modified Taiwan Agricultural Sector Model (Modified TASM), based on price endogenous mathematical programming, was used to simulate different agricultural policies related to bioenergy production. To do this simulation, the TASM model was extended to include additional bioenergy production possibilities and GHG accounting. Findings – Taiwan's bioenergy production portfolio depends on prices of ethanol, electricity and GHG. When GHG prices go up, ethanol production decreases and electricity production increases because of the relatively stronger GHG offset power of biopower. Originality/value – Taiwan is interested in producing bioenergy but only limited information is available. This study provides the information on potential bioethanol and bioelectricity production from various energy crops, GHG emission offset from bioenergy, and regional energy security.

Kaixing Huang; Jinxia Wang; Junfei Bai; Huanguang Qiu

2013 China Agricultural Economic Review

doi: 10.1108/CAER-02-2012-0008

Purpose – The purpose of this paper is to examine the discharge volume of domestic solid waste in rural China and to explore the potential impact of various factors that contribute to it. Design/methodology/approach – The data used in this study come from a large‐scale field survey conducted in six Chinese provinces. Based on the collected survey data, econometric model on the determinants of domestic solid waste discharge was constructed and used for analysis. Findings – Results from the study show that the per capita daily discharge of rural domestic solid waste was close to 1 kg in 2010, slightly less than the urban level of 1.2 kg. Results from descriptive statistical analysis and econometric estimation indicate that by implementing selected policy measures, the discharge of solid waste can be significantly reduced. In addition, the discharge of domestic solid waste is also closely related with local socio‐economic development. In particular, the results show an obvious inverted U‐shaped curve between discharge volume and income. The increase of off‐farm labor opportunities would also reduce solid waste discharge in rural China. Originality/value – This paper focuses on domestic solid waste discharge and its determinants in rural China, a research area very important but seldom reported.

Zhen Zhong; Shufen Chen; Xiangzhi Kong

2013 China Agricultural Economic Review

doi: 10.1108/CAER-07-2011-0081

Purpose – The purpose of this paper is to present an econometric model to empirically analyze the influence of production patterns and transaction style on raw milk quality. More specifically, the paper examines the effects of these institutions on both nutrition and safety aspects of raw milk quality. Design/methodology/approach – Using data collected from 396 households in Inner Mongolia, this paper adopts a multiple linear regression model (OLS/FGLS) and a zero‐inflated Poisson regression model to test two hypotheses proposed according to theory and descriptive analysis. Findings – The empirical results indicate that both production pattern and transaction style significantly affect raw milk quality. Production pattern has a more significant effect on raw milk nutrition, while transaction style has a more significant effect on raw milk safety. Research limitations/implications – Current government policies focus on reducing household production and regulating private milk collection stations. From a comprehensive quality perspective, these policies are not effective in that they cannot guarantee raw milk safety and have little effect on improving raw milk nutrition. Alternatively, promoting dairy farmers' specialized cooperatives may be a more effective policy measure. Originality/value – In contrast to other studies, this paper adopts a comprehensive quality perspective that examines both nutritional and safety characteristics rather than focusing on any single quality indicator, separately analyzing the factors influencing raw milk nutrition and raw milk safety. Therefore, the conclusion of this paper provides a new perspective in addressing the current raw milk quality problems facing China's dairy industry.

Lei Xing; Peter Goldsmith

2013 China Agricultural Economic Review

doi: 10.1108/CAER-06-2012-0069

Purpose – Two effects simultaneously shape the future soybean meal (SBM) demand in China: the income effect on meat consumption and the transition effect due to commercial feed usage in animal production. The income effect has been studied intensively in previous research and results in rapidly growing animal product consumption. The commercial feed transition effect, however, is not well understood. The accurate forecast of SBM demand requires an integration of both effects. This study aims to contribute to the commodity forecast literature: by estimating the non‐commercial to commercial feed effect and then comparing to the income effect. Design/methodology/approach – This research addresses the gap in the literature by considering the diffusion path of commercial feeding technology when forecasting China's future SBM demand. The paper addresses the following five objectives to accomplish this goal. Objective 1: estimate income elasticity of demand for meat; Objective 2: estimate the current commercial feeding gap; Objective 3: analyze the reasons for low SBM feeding ratios; Objective 4: estimate future SBM feeding ratios; Objective 5: forecast future soybean demand in China. Findings – China needs 33 years from 2009 to achieve the SBM feeding ratio of 98 percent. The difference in future derived demand for SBM mainly comes from the transition effect of animal production industry in China. The income effect only contributes on average 2.1 percent of the theoretical SBM consumption quantity over the next 20 years. The feeding technology diffusion effect, however, causes an additional 3.6 percent annual compound growth rate on the demand increase for SBM over the same time periods. The livestock industry's transition effect is roughly equivalent to 1.5 times the income effect. Practical implications – Policy makers, industry managers, and analysts will now have not only a more accurate estimate of future SBM demand, but also a better understanding of the structural components of that estimation. In particular, the role of commercial feed adoption is explicitly estimated. Originality/value – This research is the first to estimate the effect of the shift from non‐commercial to commercial feeding systems on overall SBM demand. The results show that not accounting for the diffusion of new commercial feeding technology creates under the estimates of future SBM demand.

Xinye Lv

2013 China Agricultural Economic Review

doi: 10.1108/CAER-05-2013-0086

Purpose – This paper analyzes the factors that potentially affect grain security in China and reviews the techniques used for prediction. It reviews and compares forecasts for grain security in 2020 and 2030 with the aim of making some judgments, from the perspective of grain supply and demand, about the future grain security situation in China. Design/methodology/approach – In this article, the paper will introduce the methods and results of the forecast and also focus on the predictions for grain security in 2020 and 2030 in order to give a clear review of previous researches in this regard. Findings – The results indicate that the traditional threats to food supply and demand in China still exist, while demand for biomass energy continues to rise. With regard to grain aggregate, the grain supply‐demand balance will still be relatively tight for both 2020 and 2030. In terms of structure, grain for feed will experience increase – mainly driven by the supply of corn – adding to the unabated structural issues confronting regional grain supply and demand. In the future, therefore, China should try to preserve favorable factors that increase grain production, optimize grain structure and production, maintain the proper scale and make‐up of grain imports and exports, and work for a sound global trading environment for grain. Originality/value – This article contributes to existing literature by analyzing the factors affecting grain security in China and reviewing prediction techniques and forecasts for grain security in China in 2020 and 2030. The findings suggest that China needs to take appropriate measures to ensure future grain security.