The acceptance of agricultural and food production practice by consumers is crucial for the success of innovation and marketing. This is an introduction to a collection of papers that were presented at the 28th Congress of the IAAE. The papers apply different choice modeling methods in this context in order to study the choice of food products offering credence aspects regarding functionality (health), tracability (safety), and denomination of origin and production practice (tradition) in various countries.

In response to increasing concerns about domestic food safety issues, establishing tracking systems in the food industry is mandatorily required under newly launched food safety laws. However, the kinds of monitoring and certification systems that should be set up to ensure practical adoption and the effectiveness of the regulation remain unclear. This study aims to analyze consumers’ preferences for milk traceability, with particular interest in investigating how consumers’ preferences could be affected by monitoring and certification systems of the regarding system. Survey data from a choice-based conjoint (CBC) experiment are used to achieve this objective. In the experiment, milk is defined by a set of attributes in which we assume that milk traceability can be certified by three entities: the government, an industrial association, and a third party. The CBC data are then analyzed by using the alternative-specific form of a conditional Logit (McFadden's Choice) model. We found that urban Chinese consumers have a strong desire for traceable milk, but their preference for traceable milk is significantly related to the associated certificate issuers. Currently, the highest willingness-to-pay goes to government certificated traceable milk, followed by industrial association certificated and third-party certificated milks. In the future, however, consumers are likely to give more credit to third-party certification with rising income and knowledge.

Agricultural index insurance indemnifies a farmer against losses based on an index that is correlated with, but not identical to, her or his individual outcomes. In practice, the level of correlation may be modest, exposing insured farmers to residual, basis risk. In this article, we study the impact of basis risk on the demand for index insurance under risk and compound risk aversion. We simulate the impact of basis risk on the demand for index insurance by Malian cotton farmers using data from field experiments that reveal the distributions of risk and compound risk aversion. The analysis shows that compound risk aversion depresses demand for a conventional index insurance contract some 13 percentage points below what would be predicted based on risk aversion alone. We then analyze an innovative multiscale index insurance contract that reduces basis risk relative to conventional, single-scale index insurance contract. Simulations indicate that demand for this multiscale contract would be some 40% higher than the demand for an equivalently priced conventional contract in the population of Malian cotton farmers. Finally, we report and discuss the actual uptake of a multiscale contract introduced in Mali.

Asparagus is a perishable, highly seasonal crop. We find that out-of-season imports of asparagus caused habit formation that increased demand in the U.S. growing seasons. We find that habit effects offset about 64% of the welfare losses to U.S. asparagus producers from increased Mexican imports under NAFTA and all of the U.S. producer welfare losses from increased Peruvian imports under the Andean Trade Preference Act. We estimate that the U.S. producer welfare losses from NAFTA are less than the annualized value of market loss assistance provided them in the 2008 Farm Bill.

We extend the Tobit (censored) linear equation system procedure to utility-theoretic demand functions, along with a mapping mechanism to impose the adding-up restriction implied by consumer utility maximization theory—a theoretical restriction very often ignored in previous empirical studies with censored demand systems. In this context, the Bayesian Markov Chain Monte Carlo (MCMC) procedure is applied to the censored linear approximate almost ideal demand system (LAIDS) for 12 food products, using data from the Turkish Household Expenditure Survey. All own-price elasticities are negative and expenditure elasticities positive. Uncompensated own-price elasticities for rural households are generally much higher than those for their urban peers, though demand for most food products are own-price elastic for both types of households. The differential patterns in demand elasticities between urban and rural households become even more evident (almost twice) as relatively more expensive foodstuffs are consumed, showing that accessibilities to alternative products have made rural Turkish households more cognizant toward price changes in foods. Household characteristics play a key role in food expenditures, notably so in urban areas, and regional and seasonal differences are also present.

This article investigates whether political competition plays an important role in determining the level of agricultural protection. In order to do so, we exploit variation in political and economic data from 74 developing and developed countries for the post-war period. We use two measures of political competition: one that captures the extent to which political power can be freely contested regardless of election results and one based on vote share at last parliamentary elections. Our results, based on static and dynamic panel estimators, show unambiguously that the higher the level of political competitions is, the higher the agricultural protection.

We examine the consistency of risk preference measures based on eight hypothetical elicitation methods and a lottery game applied to smallholder farmers in a marginal upland environment in Vietnam. Using these measures, we identify influencing factors of risk aversion via regression analysis, whereby unlike previous studies, we include several proxies of social capital such as social networks and norms. Data were collected from household heads and spouses separately in a random sample of 300 households. Although correlations between most of the various risk preference measures are all statistically highly significant, most are weak. On average, respondents have a high degree of risk aversion and specific characteristics—gender, age, idiosyncratic shocks, education, social norms, network-reliance with extended family, and connections to local authorities—are significant determinants of risk preferences across most elicitation methods, whereas others—the household's dependency ratio, wealth, and covariate shocks—are significant in a few methods only. The explanatory power of the models is limited, indicating that other factors are likely to be of greater importance in determining risk preferences. The results can help target safety nets, encourage investments, and lead to the development of more applicable methods for assessing risk preferences of smallholders in developing countries.

One of the objectives of agricultural policy worldwide concerns the support of farm income. Common Agricultural Policy direct payments (DPs) are the main instruments to support farm income in the European Union. This article addresses their role in the concentration of farm income. This is done by calculating the Gini coefficient and its disaggregation in a large sample of Italian farms in the period between 2006 and 2007. Although this approach has been used to develop ex-post analysis in previous studies, this article is innovative given that it is used here in an ex ante analysis aimed at evaluating the likely impact of a recent reform proposal. This latter requests changing the current model to a regional model of DPs application to make payment rates (i.e., payment per hectare) homogeneous among farms in the same region.

The analysis shows that DPs and farm incomes are both very concentrated but that DPs allow for an income concentration reduction in Italian farms. The shift to a regional implementation reduces DPs concentration and, to a limited extent, farm income concentration. Of the considered regionalization scenarios, those that redistribute DPs among regions are the most effective in reducing concentration. The extension of the Gini considered approach to an ex ante setting seems effective because it provides insights that could feed the policy debate regarding the forthcoming reform.

In this article, we examine the relationship between public investments in agricultural research and development and the productivity-enhancing benefits they generate. Knowledge productivity functions are estimated for U.S. agriculture using data on multifactor productivity and public knowledge stocks. We examine the time-series properties of the data and compare alternative econometric estimation procedures. The results are used to calculate economic performance measures such as internal rates of return and benefit-cost ratios. The real rate of return to public investments in agricultural research and development in the United States is in the range of 8–10% per annum.

In emerging markets for high-value food products in developing countries, processing companies search for efficient ways to source raw material of high quality. One widely embraced approach is contract farming. But relatively little is known about the appropriate design of financial incentives in a small farm context. We use the example of the Vietnamese dairy sector to analyze the effectiveness of existing contracts between a processor and smallholder farmers in terms of incentivizing the production of high quality milk. A framed field experiment is conducted to evaluate the impact of two incentive instruments, a price penalty for low quality and a bonus for consistent high quality milk, on farmers’ investment in quality-improving inputs. Statistical analysis suggests that the penalty drives farmers into higher input use, resulting in better output quality. The bonus payment generates even higher quality milk. We also find that input choice levels depend on farmers’ socio-economic characteristics such as wealth, while individual risk preferences seem to be less important. Implications for the design of contracts with smallholders are discussed.

Unlike most investor-owned enterprises, cooperatives often have freedom to choose among a variety of firm objectives. Using 2002–2008 plant- and province-level data, we ask in the present article which of several alternative maximands a Korean cooperative rice processing firm pursues. In contrast to earlier studies, farmer-member supply functions are incorporated into the cooperative's optimization framework. We show that only large cooperative firms have operated at efficient scale, while small and medium-sized ones have been scale-inefficient. Because the latter operate where scale returns are increasing, mergers of small and medium-sized cooperatives likely would be cost-reducing and member-return-enhancing.

Data from a farm survey and choice experiment are used to value the benefits of Bt cotton in Pakistan. Unlike previous research on the economic impacts of Bt, which mostly concentrated on financial benefits in terms of gross margins, we also quantify and monetize health and environmental benefits associated with technology adoption. Due to lower chemical pesticide use on Bt cotton plots, there are significant health advantages in terms of fewer incidents of acute pesticide poisoning, and environmental advantages in terms of higher farmland biodiversity and lower soil and groundwater contamination. Farmers themselves value these positive effects at US$ 79 per acre, of which half is attributable to health and the other half to environmental improvements. Adding average gross margin gains of US$ 204 results in aggregate benefits of US$ 283 per acre, or US$ 1.8 billion for the total Bt cotton area in Pakistan.

DNA profile information has begun appearing in purebred bull auction catalogs; however, the value of this information is as of yet unknown. This study uses data from actual bull sales at a test station and combines it with stated-preference survey data to determine the value of the DNA profile information. Consistent with previous research, we find that expected progeny differences (EPDs), test performance, and ultrasound information significantly influence bull-buyers’ willingness-to-pay. The newer DNA profile information, however, was unrelated to buyers’ preferences. Methodologically, we find statistically significant differences (but highly correlated willingness-to-pay values) across the stated and revealed preference data sources.

In this article we investigate the factors affecting levels and growth of incomes in rural Indonesia following the crisis of 1997–1998. In particular, we investigate the relative roles of nonfarm incomes and productivity improvements achieved via changes in crops versus improvements on the same crops on income dynamics. Framing the article in the context of an optimal labor allocation model, relying on unique household panel data from Central Sulawesi, and using advanced panel econometric methods, we find that local innovations related to the adoption and intensification of new cash crop varieties, more specifically the shift from coffee to cocoa production, can explain a substantial part of the observed post-crisis developments. Causal estimates of the effect of growing cocoa suggest that households were on average able to achieve about 14% higher income levels during the post-crisis period compared to the planting of other crops, most notably coffee. Also, our results demonstrate the importance of engagement in nonfarm activities for household income growth. Comparative analyses using a nationally representative survey suggest that similar processes are at play in other parts of Indonesia.

Cash transfer programs are increasingly utilized to combat poverty and hunger while building the human capital of future generations; however, they have been faulted by some for failing to build the productive capacity of current generations. This article analyzes the impact of the Malawi Social Cash Transfer Scheme on agricultural production. The results show strong increases in ownership of productive agricultural assets, in time devoted to household farms, and in food types consumed from own production, coupled with a sharp decrease in ganyu labor, which is often used as a coping mechanism once food stores have been depleted. These results are most likely achieved by helping farmers overcome credit and liquidity constraints. This research shows that cash transfer programs can help the capacity of extremely poor farm households to expand agriculture production even if the goal of the program is focusing on other dimensions of poverty.