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Article
Publication date: 31 July 2009

Pamela Guiling, Damona Doye and B. Wade Brorsen

This paper aims to determine the effects of agricultural, recreational and urban variables on Oklahoma land prices.

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Abstract

Purpose

This paper aims to determine the effects of agricultural, recreational and urban variables on Oklahoma land prices.

Design/methodology/approach

An econometric model is estimated using price of agricultural land parcels as the dependent variable and independent variables representing agricultural, recreational and urban uses. Recreational variables include county‐level recreational income from Agricultural Census data as well as deer harvest for each county. Urban variables are functions of population and income for each county. The agricultural variables include rainfall as well as crop returns for cropland and cattle prices for pasture.

Findings

Agricultural variables are the most important, followed by urban and then recreational variables. Transaction prices are higher than commonly used land‐value survey data. The major recreational variable is deer harvest, which is more important in small tracts. The value of pasture is now greater than cropland. Small tract sizes receive substantial premiums.

Research limitations/implications

Agriculture is still an important part of the Oklahoma economy, so the findings might differ in more densely populated states. As with most econometric models, there are possible biases due to errors in measurement or missing explanatory variables.

Practical implications

The paper provides information that could be used by those wanting to estimate land value or wanting to manage land to increase its value.

Originality/value

The paper differs from previous work in both variables considered and the data used. Also, most previous work has not as directly addressed the issue of the relative importance of agricultural, recreational and urban variables.

Details

Agricultural Finance Review, vol. 69 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 13 October 2023

Raymond K. Dziwornu, Eric B. Yiadom and Sampson B. Narteh-yoe

The cost of agricultural loans is a major constraint to the growth of the agriculture sector. This paper examines agricultural loan pricing by banks in Ghana using panel data…

Abstract

Purpose

The cost of agricultural loans is a major constraint to the growth of the agriculture sector. This paper examines agricultural loan pricing by banks in Ghana using panel data analysis.

Design/methodology/approach

Data were obtained from audited financial reports of 15 agricultural loan lending banks from 2010 to 2017. The study applies the random-effect model and the fixed-effect model in the analysis and uses the system generalized system method of moment to check the robustness of the results from the baseline models.

Findings

The study found that agricultural loan pricing by banks is significantly influenced by risk premium, cost of funds, loan impairment, agricultural growth rate and food inflation. Banks should leverage emerging technologies to de-risk agriculture loan pricing to allay the fear of default. Farmers should look for long-term and relatively cheaper funds to support agricultural loans. Increasing credit to the agricultural sector could increase output, thereby reducing food inflation uncertainty for competitive pricing of agricultural loans.

Originality/value

Agriculture employs about 52% of Ghana's labor force, contributing about 20% to GDP. But it is “under” financed. This study leads the way in unraveling the factors accounting for the high prices of agricultural loans in Ghana. This study further contributes to policy development toward increasing credit to the agricultural sector.

Details

African Journal of Economic and Management Studies, vol. 15 no. 1
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 2 June 2023

Harold Glenn A. Valera, Badri Narayanan Gopalakrishnan, Sumathi Chakravarthy, Sindhu Bharathi, Jean Balié and Valerien Olivier Pede

This paper investigates the effects of the total abolition of all forms of agricultural subsidies to producers and border tariffs on the prices of staple cereals.

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Abstract

Purpose

This paper investigates the effects of the total abolition of all forms of agricultural subsidies to producers and border tariffs on the prices of staple cereals.

Design/methodology/approach

The authors use the GTAP global economy-wide model and focus on 27 countries and 8 regions. The GTAP database that is used contains information on budgetary transfers to producers and market price support such as domestic price support, tariffs, export subsidies, quotas on exports or imports and other border measures.

Findings

The removal of subsidies is estimated to significantly increase the prices of wheat and other cereal grains in Japan, paddy rice in Malaysia and Indonesia, processed rice in Malaysia and Indonesia and wheat in Brazil and India. When border tariffs are removed, cereal prices are projected to fall in several countries, but the decline is more pronounced for wheat in Kenya and Japan, other cereal grains in South Korea and all staples in Nepal.

Research limitations/implications

The alternative scenarios on the removal of agricultural subsidies in all agricultural sectors and the elimination of border tariffs are purely speculative as the analysis ignores important political economy considerations of agricultural and food policy reforms.

Practical implications

The findings from this study point to the importance of implementing additional policy measures to mitigate the possible negative effect of repurposing the support to agriculture and ensure the food security and welfare of those categories of buyers who heavily depend on the price of staple food for their livelihoods.

Social implications

This study’s findings confirm that the elimination of agricultural subsidies would impact global food security directly by making staple food less affordable to the poorest and indirectly by decreasing the available household budget for other presumably more nutritious food groups. Consequently, it is expected that these price increases could make segments of the world population poorer, particularly the net-food buyers due to a decline in their real income.

Originality/value

The authors assess the impact of removing the subsidies on the economy in a comprehensive way, particularly given the recent policy focus on net zero emissions and Sustainable Development Goals that include healthy foods. The authors also consider the counter effects of tariff reduction on this, which is price-reducing.

Details

Journal of Economic Studies, vol. 51 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 30 September 2014

Christina Kleinau and Nick Lin-Hi

This paper aims to conceptually analyse the role of speculation in society to determine whether agricultural commodity index funds, a new form of speculation, contribute to…

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Abstract

Purpose

This paper aims to conceptually analyse the role of speculation in society to determine whether agricultural commodity index funds, a new form of speculation, contribute to sustainable development.

Design/methodology/approach

The theoretical arguments justifying the value of the market economic system for generating sustainable development and the positive contribution speculators make too in this context are elaborated. It is then considered whether the arguments justifying traditional speculation hold for agricultural commodity index funds.

Findings

Traditional forms of speculation contribute positively to sustainable development; primarily due to the information they uncover on demand and supply factors which affect prices. Agricultural index funds are a danger to sustainable development, as their transactions are not based on demand and supply factors but simply represent demand for the diversification effect which commodities generate when added to an investment portfolio.

Originality/value

The article offers a new approach to assessing whether agricultural index funds contribute to sustainable development. Empirical research has been conducted on whether speculation via index funds has unjustifiably affected commodity prices. However, results of these investigations have been inconclusive due to stark limitations in data availability. By approaching the issue from a conceptual point of view, the article delivers theoretically sound arguments as to why agricultural commodity index funds are likely to have an unjustifiable effect on prices and, hence, are a danger to sustainable development. This has strong implications for finance practice and regulation.

Details

Corporate Governance, vol. 14 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 6 November 2018

Ismail Olaleke Fasanya, Temitope Festus Odudu and Oluwasegun Adekoya

This paper aims to model the relationship between oil price and six major agricultural commodity prices using monthly data from January 1997 to December 2016.

Abstract

Purpose

This paper aims to model the relationship between oil price and six major agricultural commodity prices using monthly data from January 1997 to December 2016.

Design/methodology/approach

The authors use both the linear autoregressive distributed lag by Pesaran et al. (2001) and the nonlinear autoregressive distributed lag by Shin et al. (2014), and they also account for structural breaks using the Bai and Perron (2003) test that allows for multiple structural changes in regression models.

Findings

These findings are discernible from the authors’ analyses. First, the linear analysis indicates a significant positive effect of oil prices on the agricultural commodity prices, which supports evidence on the non-neutrality hypothesis. Second, oil price asymmetries seem to matter more when dealing with agricultural commodity prices, except for groundnut. Third, it may be necessary to pre-test for structural breaks when modelling the relationship between oil price and agricultural prices regardless of the commodity being analysed. Fourth, the asymmetric effect for the agricultural commodity prices is non-neutral to oil prices, except for rice in the case of structural breaks.

Originality/value

This paper contributes to the on-going debate on the oil–agricultural commodity nexus using the recent technique of asymmetry and also considering the role structural breaks play in the relationship between oil price and agricultural commodity prices.

Details

International Journal of Energy Sector Management, vol. 13 no. 2
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 10 December 2018

Saeed Solaymani

The global energy market has been facing lower prices of crude oil in recent years. Lower fuel price leads to lower transport cost and cheaper agricultural inputs (such as…

Abstract

Purpose

The global energy market has been facing lower prices of crude oil in recent years. Lower fuel price leads to lower transport cost and cheaper agricultural inputs (such as pesticides and chemical fertilizer), resulting in lower prices of agricultural commodities in the international markets. On the other hand, lower global oil price reduces the oil revenues of oil exporting countries, resulting in a decrease in government expenditures. Therefore, the purpose of this study is to examine the impacts of lower global oil and agricultural commodity prices and government expenditure on the entire economy and poverty level of Malaysia.

Design/methodology/approach

This study used a computable general equilibrium model (CGE) to investigate four simulation scenarios based on the latest Malaysia’s input-output table belonging to 2010. The first scenario is a 30 per cent fall in the export and import prices of agricultural commodity prices, while the second is a 50 per cent decline in the export and import prices of crude oil, and the third combines them. In the fourth scenario, government operating expenditure declines by 4 per cent because of the fall in government’s oil revenues as a result of the decline in global oil prices.

Findings

The simulation results suggest that lower international oil price decreases real gross domestic product (GDP) and investment in Malaysia and influences positively the output and employment of some agriculture sectors. However, lower agricultural commodity price increases real GDP and investment in the country and negatively influences the output, employment and exports of all agriculture sectors. The decline in government expenditures also increases the output and the employment in the economy, whereas it decreases household consumption. In conclusion, results show that the agriculture sector losses from the current decline in international agricultural commodity prices, while it benefits from lower oil and government expenditure.

Originality/value

The main contribution of this study is comparing the impacts of recent falls in global oil and agricultural prices on the entire economy and agriculture sector of Malaysia. Investigating the impacts of these issues on the poverty level of Malaysian households is another contribution to the study. Another contribution is analyzing the impact of a reduction in government expenditures because of the decline in global oil price on the economy and welfare of Malaysia. Therefore, this study makes a useful contribution to the small literature of the topic.

Details

International Journal of Energy Sector Management, vol. 13 no. 2
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 2 August 2011

Jabir Ali and Kriti Bardhan Gupta

In line with the ongoing global and domestic reforms in agriculture and allied sectors, the Indian Government is reducing its direct market intervention and encouraging private…

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Abstract

Purpose

In line with the ongoing global and domestic reforms in agriculture and allied sectors, the Indian Government is reducing its direct market intervention and encouraging private participation based on market forces. This has led to increased exposure of agricultural produce to price and other market risks, which consequently emphasize the importance of futures markets for price discovery and price risk management. The purpose of this paper is to analyze the efficiency of agricultural commodity markets by assessing the relationships between futures prices and spot market prices of major agricultural commodities in India.

Design/methodology/approach

The efficiency of the futures market for 12 agricultural commodities, traded at one of the largest commodity exchanges of India, i.e. National Commodity & Derivatives Exchange Ltd, has been explored by using Johansen's cointegration analysis and Granger causality tests. Unit root test procedures such as Augmented Dickey‐Fuller and non‐parametric Phillips‐Perron were initially applied to examine whether futures and spot prices are stationary or not. The hypothesis, that futures prices are unbiased predictors of spot prices has been tested using econometric software package.

Findings

Results show that cointegration exists significantly in futures and spot prices for all the selected agricultural commodities except for wheat and rice. This suggest that there is a long‐term relationship between futures and spot prices for most of the agricultural commodities like maize, chickpea, black lentil, pepper, castor seed, soybean and sugar. The causality test further distinguishes and categorizes the commodities based on direction of relationship between futures and spot prices. The analysis of short‐term relationship by causality test indicates that futures markets have stronger ability to predict subsequent spot prices for chickpea, castor seed, soybean and sugar as compared to maize, black lentil and pepper, where bi‐directional relationships exist in the short run.

Practical implications

The results of this study are useful for various stakeholders active in agricultural commodities markets such as producers, traders, commission agents, commodity exchange participants, regulators and policy makers.

Originality/value

There are very few studies that have explored the efficiency of the commodity futures market in India in a detailed manner, especially at individual commodity level.

Details

Agricultural Finance Review, vol. 71 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 6 May 2020

Moumita Basu and Ranjanendra Narayan Nag

This is a theoretical paper in the field of structuralist macroeconomics. The paper focuses on commodity price fluctuation which has emerged as one of the major macroeconomic…

Abstract

Purpose

This is a theoretical paper in the field of structuralist macroeconomics. The paper focuses on commodity price fluctuation which has emerged as one of the major macroeconomic factors with significant bearing on the relationship between the agricultural and nonagricultural sectors.

Design/methodology/approach

The paper develops a dual economy model consisting of an agricultural sector and an industrial sector. The commodity price is subject to the fluctuations due to the fact that stock of primary goods is an asset which is sensitive to speculations. The paper considers a standard methodology of dynamic adjustment process involving change in stock of agricultural goods and price of agricultural goods under perfect foresight. The saddle path properties of the equilibrium are also examined.

Findings

The paper shows that the balanced budget fiscal expansion, capital account liberalization and the agricultural expansion lead to expansion of the industrial sector as well as level of employment. The increase in world interest rate may lead to contraction of the industrial sector and depress employment.

Originality/value

We will consider the openness of the economy in explaining how different macroeconomic policies and capital account liberalization generate multiple cross effects on the inter-connectedness between agricultural and the non-agricultural sector. The paper will discuss the issue of employment generation in conjunction with commodity price fluctuation. We depart from the literature by using Taylor rule under which interest rate is fixed by the Central Bank such that money supply becomes endogenous.

Details

Journal of Economic Studies, vol. 47 no. 6
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 6 February 2024

Yitian Xiao, Jiawu Dai and J. Alexander Nuetah

The purpose of this paper is to test the overshooting effects of monetary expansion on prices of agricultural products at farm production, processing and circulation stages in…

Abstract

Purpose

The purpose of this paper is to test the overshooting effects of monetary expansion on prices of agricultural products at farm production, processing and circulation stages in China, and to investigate the heterogeneity of the overshooting mechanisms in these three links.

Design/methodology/approach

Empirical results are obtained through the vector error correction model and the overshooting framework proposed by Saghaian et al. (2002b). Specifically, we first apply the Dickey–Fuller generalized least squares (DF-GLS) method to test the stationarity of the key variables, and then use the Johansen’s (1991) method to conduct the cointegration test. Finally, the vector error correction model is employed to examine the overshooting hypotheses in the three stages of China’s agricultural sector.

Findings

Empirical results indicate that overshooting of prices relative to monetary expansion in China’s agricultural sector is a common phenomenon, but with significant heterogeneity. Firstly, at the stage of agricultural production, the overshooting degree and restoration rate of material price are greater than those of agricultural products price. Secondly, at the processing stage of agricultural products, both the purchase price of agricultural products and industrial producer price have an overshooting effect, but the overshooting effect of the former is more significant than the latter. Thirdly, at the circulation stage of agricultural products, the overshooting coefficient of the wholesale price index of agricultural products is the most significant, while that of the retail and purchase price of agricultural products is not significant.

Originality/value

The paper contributes to proposing a comprehensive framework on testing the overshooting effects for three main stages of agricultural sector in China and empirically investigating the heterogeneity of the overshooting mechanisms in different stages with time series methods.

Details

China Agricultural Economic Review, vol. 16 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 5 December 2023

Dezhao Tang, Qiqi Cai, Tiandan Nie, Yuanyuan Zhang and Jinghua Wu

Integrating artificial intelligence and quantitative investment has given birth to various agricultural futures price prediction models suitable for nonlinear and non-stationary…

Abstract

Purpose

Integrating artificial intelligence and quantitative investment has given birth to various agricultural futures price prediction models suitable for nonlinear and non-stationary data. However, traditional models have limitations in testing the spatial transmission relationship in time series, and the actual prediction effect is restricted by the inability to obtain the prices of other variable factors in the future.

Design/methodology/approach

To explore the impact of spatiotemporal factors on agricultural prices and achieve the best prediction effect, the authors innovatively propose a price prediction method for China's soybean and palm oil futures prices. First, an improved Granger Causality Test was adopted to explore the spatial transmission relationship in the data; second, the Seasonal and Trend decomposition using Loess model (STL) was employed to decompose the price; then, the Apriori algorithm was applied to test the time spillover effect between data, and CRITIC was used to extract essential features; finally, the N-Beats model was selected as the prediction model for futures prices.

Findings

Using the Apriori and STL algorithms, the authors found a spillover effect in agricultural prices, and past trends and seasonal data will impact future prices. Using the improved Granger causality test method to analyze the unidirectional causality relationship between the prices, the authors obtained a spatial effect among the agricultural product prices. By comparison, the N-Beats model based on the spatiotemporal factors shows excellent prediction effects on different prices.

Originality/value

This paper addressed the problem that traditional models can only predict the current prices of different agricultural products on the same date, and traditional spatial models cannot test the characteristics of time series. This result is beneficial to the sustainable development of agriculture and provides necessary numerical and technical support to ensure national agricultural security.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

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