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Essays on economic modelling of farmers’ behaviours

special cases of structural change, technology adoption and policy changes

Basnet, Shyam Kumar (2018). Essays on economic modelling of farmers’ behaviours. Diss. (sammanfattning/summary) Uppsala : Sveriges lantbruksuniv., Acta Universitatis Agriculturae Sueciae, 1652-6880 ; 2018:18
ISBN 978-91-7760-176-0
eISBN 978-91-7760-177-7
[Doctoral thesis]

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Multiple socio-economic and biophysical factors affect farmers’ behavioural responses to economic policy and technology adoption, but personal beliefs and expert opinions are also important for making actual choices on farm policy and agricultural innovations. Using econometric and mathematical programming models, this thesis assessed farmers’ behavioural responses to farm structural changes, technology adoption and policy interventions. For structural changes, the results showed that conversion to organic farming in the European Union (EU) is a two-tier decision, with a first choice of staying conventional or moving to conversion and a second choice of mixed or organic production. This gradual conversion process encourages the presence of nested structures within the process, largely influenced by socio-economic and biophysical variables such as milk prices, policy incentives and technology factors. Following milk quota abolition under the EU Common Agricultural Policy (CAP) reform, risk of price uncertainty emerged as another key factor for the organic conversion process of Swedish dairy farms.

In econometric modelling of farmers’ choices and impacts of responses to adopting agricultural technology, the parametric econometric specification is commonly applied. However, it cannot guarantee the true specification of behavioural responses to agricultural innovation. In this thesis, a recently developed nonparametric (NP) kernel density estimator was applied in impact assessment of agricultural technology adoption, using the case of zero tillage technology in the rice-wheat cropping system of the Indo-Gangetic Plains (IGP) region. This estimator can capture possible nonlinearities in the data generation process that cannot be known a priori. The results showed that the NP specification outperformed the parametric specification in predicting propensity scores and produced impact estimates with small standard error. For the study area, the results showed that introduction of the new technology generated the economic benefits of markedly lower tillage costs yield in zero-tilled plots.

In a study of policy interventions, the wealth effect of the CAP direct payment system on agricultural crop production decisions was analysed using Bayesian econometrics and positive mathematical programming (PMP). Under risk, lump-sum payments may influence risk-averse farmers on crop production decisions. In simulations, no direct payment in a risky environment caused a shift in land use away from risky crops towards low-risk crops, altering the crop mix. Moreover, the farm-level wealth effect varied greatly between farms, although its magnitude was influenced by regional characteristics, e.g. historical farm structure and region-specific conditions.

Authors/Creators:Basnet, Shyam Kumar
Title:Essays on economic modelling of farmers’ behaviours
Subtitle:special cases of structural change, technology adoption and policy changes
Series Name/Journal:Acta Universitatis Agriculturae Sueciae
Year of publishing :13 March 2018
Depositing date:13 March 2018
Number of Pages:32
IBasnet, S.K., Manevska-Tasevska, G., Surry, Y. T Karantininis, K. (2018). The end of milk quotas: Structural impacts on conventional and organic dairy farms in Sweden (Manuscript).
IIBasnet, S.K., Manevska-Tasevska, G. & Surry, Y. (2018). Explaining the process for conversion to organic dairy farming in Sweden: An alternative modelling approach. German Journal of Agricultural Economics, 1: 14-30
IIIBasnet, S.K. (2018). Analysing and measuring the economic effects of zero-tillage technology: The case of the rice-wheat cropping system of the Indo-Gangetic Plains (Manuscript).
IVBasnet, S.K., Jansson, T. & Heckelei, T. (2018). A Bayesian econometrics and risk programming approach for analysing the impact of decoupled payments in the European Union (Manuscript).
VJansson, T., Basnet, S.K. & Heckelei, T. (2018). A note regarding the estimation of covariance matrices using unbalanced panels (Manuscript).
Place of Publication:Uppsala
Publisher:Department of Economics, Swedish University of Agricultural Sciences
ISBN for printed version:978-91-7760-176-0
ISBN for electronic version:978-91-7760-177-7
Publication Type:Doctoral thesis
Full Text Status:Public
Agris subject categories.:E Economics, development, and rural sociology > E10 Agricultural economics and policies
E Economics, development, and rural sociology > E16 Production economics
L Animal production > L01 Animal husbandry
Subjects:(A) Swedish standard research categories 2011 > 5 Social Sciences > 502 Economics and Business > Economics
Agrovoc terms:farmers, human behaviour, dairy cows, milk production, organic agriculture, adjustment of production, structural change, risk, Bayesian theory, mathematical models
Keywords:organic dairy, nested logit, zero tillage, nonparametric specification, direct payment, positive mathematical programming, risk, Bayesian econometrics
Permanent URL:
ID Code:15357
Faculty:NJ - Fakulteten för naturresurser och jordbruksvetenskap
Department:(NL, NJ) > Dept. of Economics
External funders:EU FP7
Deposited By: Shyam Kumar Basnet
Deposited On:16 Mar 2018 09:39
Metadata Last Modified:09 Sep 2020 14:17

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