Abstract: In response to global opportunities and domestic challenges, Ethiopia is revising its energy policy to switch from high-cost imported fossil fuel to domestically produced biofuels. Currently, there are biofuel investment activities in different parts of the country to produce ethanol and biodiesel. However, there is no rigorous empirical study to assess impacts of such investments. This paper assesses the distributive effect and food security implications of biofuels investment in Ethiopia, using data from 15 biofuels firms and 2 NGOs in a CGE (computable general equilibrium) analysis. Findings suggest that biofuels investments in the context of Ethiopia might have a ‘win-win’ outcome that can improve smallholder productivity (food security) and increase household welfare. In particular, the spillover effects of certain biofuels can increase the production of food cereals (with the effect being variable across regions) without increasing cereal prices. When spillover effects are considered, biofuel investment tends to improve the welfare of most rural poor households. Urban households benefit from returns to labor under some scenarios. These findings assume that continued government investment in roads allows biofuels production to expand on land that is currently unutilized, so that smallholders do not lose land. Investment in infrastructure such as roads can thus maximize the benefits of biofuels investment.

Abstract: In developing countries, consumers can buy many goods either in formal markets or in informal markets and decide where to purchase based on the product's price and anticipated quality. We assume consumers cannot assess quality prior to purchase and cannot, at reasonable cost, identify who produced the good they are considering. Many products (meats, fruits, vegetables, fish, grains) sold both in formal groceries and, less formally, on the street fit this description. We assume that producers can adjust quality at a cost and only firms in the formal sector are subject to government regulation. In the long run, producers migrate to the sector that is more profitable. Using this model, we demonstrate how regulations in the formal sector can lead to a quality gap between formal and informal sector goods. We moreover investigate how changes in regulation affect quality, price, aggregate production, and the number of firms in each sector.

Abstract: Soil fertility depletion is considered the main biophysical limiting factor to increasing per capita food production for most smallholder farmers in Africa. The adoption and diffusion of sustainable agricultural practices (SAPs), as a way to tackle this impediment, has become an important issue in the development policy agenda for sub-Saharan Africa. This paper examines the adoption decisions for SAPs, using multiple crosssectional plot-level observations, collected in 2010 from 681 farm households and 1,539 plots, in 4 districts and 88 villages of rural Tanzania. We employ a multivariate probit technique to model simultaneous adoption decisions by farm households. Our study reveals that rainfall shocks, insects and disease shocks, government effectiveness, tenure status of plot, social capital, plot location and size, and asset ownership, all influence the adoption decision of sustainable practices. Policies that target SAPs and are aimed at organizing farmers into associations, improving land tenure security, and enhancing skills of civil servants can increase the likelihoodthat smallholder farmers will adopt SAPs.

Abstract: This paper studies the patterns of farmers’ crop choices for a multiple-crop portfolio, where production risk considerations and rainfall uncertainty are likely to be critical factors. Our analysisemploys plot-level panel data from Ethiopia, combined with seasonal and yearly rainfall variability (from 30 years of meteorological data corresponding to the survey villages). Using the single indexapproach, our results indicate that the combined riskiness of crop portfolios at a household level responds negatively to annual rainfall variability, while seasonal rainfall variability has less consistent impact. Farmers are more likely to select less risky crops with less return, even when intercrop interactions are taken into account. Moreover, development policies designed to enhance accumulation and risk taking should take into account the importance of such exogenous factors as weather in ex-ante risk taking.

Abstract: This paper analyses the economic impacts of climate change on Ethiopia’s agriculture using a countrywide computable general equilibrium model. The impacts on agriculture are based on results from a Ricardian model where current (and future) agricultural production is analyzed as a function of temperature and precipitation. We project that the effect of overall climate change will be relatively benign until approximately 2030 and then worsen considerably. Our simulation results indicate that, over a 50-year period, the projected reduction in agricultural productivity may lead to 30 percent less average income, compared with the possible outcome in the absence of climate change. Autonomous adaptations that the farmers make and government policies in response will be crucial for Ethiopia’s future development.

Abstract: This paper uses data from household- and plot-level surveys conducted in the highlands of the Tigray and Amhara regions of Ethiopia to examine the contribution of sustainable land-management practices to net values of agricultural production in areas with low- and high-agricultural potential. A combination of parametricand nonparametric estimation techniques is used to check result robustness. Both techniques consistently predict that minimum tillage is superior to commercial fertilizers—as are farmers’ traditional practices without use of commercial fertilizers—in enhancing crop productivity in the low-agricultural potential areas. In the highagricultural potential areas, by contrast, use of commercial fertilizers is superior to both minimum tillage andfarmers’ traditional practices without commercial fertilizers. The results are found to be insensitive to hidden bias. Our findings imply a need for careful agroecological targeting when developing, promoting, and scaling up sustainable land-management practices.

Abstract: We examine the value of terroir, which refers to the special characteristics of a place that impart unique qualities to the wine produced. We do this by conducting a hedonic analysis of vineyard sales in the Willamette Valley of Oregon to ascertain whether site attributes, such as slope, aspect, elevation, and soil types, or designated appellations are more important determinants of price. We find that prices are strongly determined by sub-AVA appellation designations, but not by specific site attributes. These results indicate that the concept of terroir matters economically, although the reality of terroir – as proxied for by locational attributes – is not significant.

Abstract: Eco-certification of coffee, timber and other high-value agricultural commodities is increasingly widespread. In principle, it can improve commodity producers’ environmental performance, even in countries where state regulation is weak. However, evidence needed to evaluate this hypothesis is virtually nonexistent. To help fill this gap, we use detailed farm-level data to analyze the environmental impacts of organic coffee certification in central Costa Rica. We use propensity score matching to control for self-selection bias. We find that organic certification improves coffee growers’ environmental performance. It significantly reduces chemical input use and increases adoption of some environmentally friendly management practices.

Abstract: Eco-certification of coffee, timber and other high-value agricultural commodities is increasingly widespread. In principle, it can improve commodity producers’ environmental performance, even in countries where state regulation is weak. However, evidence needed to evaluate this hypothesis is virtually nonexistent. To help fill this gap, we use detailed farm-level data to analyze the environmental impacts of organic coffee certification in central Costa Rica. We use propensity score matching to control for self-selection bias. We find that organic certification improves coffee growers’ environmental performance. It significantly reduces chemical input use and increases adoption of some environmentally friendly management practices.

Abstract: The importance of providing secure land rights to smallholder farmers in developing countries is now widely recognized. In line with this, our paper analyzes the impact of land certification on boosting productivity of female-headed households in Ethiopia, which are believed to be systematically more tenure insecure than their male counterparts. Based on parametric and semi-parametric analyses, the impact of certification on plot-level productivity is positive and significant. However, certification has different impacts on male and female productivity: male-headed households gain significantly and women gain only modestly. Hence, the results indicate that, while certification is clearly beneficial to farm-level productivity, it does not necessarily lead to more gains for female-headed households.

Abstract: Individuals extracting common-pool resources in the field sometimes form outputsharing groups to avoid costs of crowding. In theory, if the right number of groups forms, Nash equilibrium aggregate effort should fall to the socially optimal level. Whether individuals manage to form the efficient number of groups and to invest within the chosen groups as theory predicts, however, has not been previously determined. We investigate these questions experimentally. We find that subjects do vote in most cases to divide themselves into the optimal number of output-sharing groups, and in addition do decrease the inefficiency significantly (by 50% to 71%). We did observe systematic departures from the theory when the group sizes are not predicted to induce socially optimal investment. Without exception these are in the direction of the socially optimal investment, confirming the tendency noted elsewhere in public goods experiments for subjects to be more “other-regarding” than purely selfish.

Abstract: Soil degradation is one of the most serious environmental problems in the highlands of Ethiopia. The prevalence of traditional agricultural land use and the absence of appropriate resource management often result in the degradation of natural soil fertility. This has important implications for soil productivity, household food security, and poverty. Given the extreme vulnerability of farmers inthis area, we hypothesized that farmers’ risk preferences might affect the sustainability of resource use. This study presents experimental results on the willingness of farmers to take risks and relates the subjective risk preferences to actual soil conservation decisions. The study looks at a random sample of 143 households with 597 farming plots. We found that a high degree of risk aversion significantly decreases the probability of adopting soil conservation. This implies that reducing farmers’ risk exposure could promote soil conservation practices and thus more sustainable natural resource management. This might be achieved by improving tenure security, promoting access to extension services and education, and developing off-farm activities that generate income.

Abstract: Devoting time to off-farm activities, while complementing agricultural incomes, may be constrained by labor availability and financial capacity. This paper assesses the importance of rainfall patterns, which condition the availability of agricultural labor, and financial constraints on off-farm employment decisions. Using panel data from Ethiopia, which include experimental rate-of-time preferencemeasures, we found that these and rainfall are significant determinants off-farm employment. Rural development policies should take into account the financial capacity of households and the role of offfarm opportunities as safety nets in the face of weather uncertainty.

Abstract: Today a new generation of food safety policy is emerging in OECD countries and international public health forums. The United States has actively contributed to the thinking and scientific researchunderlying this new generation of policy. A consensus has emerged among nations about the basic components of an effective food safety system based on modern science and management practices. In shorthand, the vision is of a farm-to-fork, risk-based, scientifically supported safety control system. This system is built on several decades of experience with risk management in national governments,particularly in U.S. environmental and occupational and consumer safety policy. This paper describes the elements of a risk-based, farm-to-fork food safety system as it is emerging in OECD countries guided by discussions through Codex Alimentarius and traces its roots in the development of risk management policy in the United States.

Abstract: This paper provides an overview of developments in food safety policy in major industrial countries and of economic analysis of this policy. It describes the elements of a risk-based, farm-to-fork food safety system as it is emerging in OECD countries guided by discussions through Codex Alimentarius and traces its roots in the development of risk management policy in the United States. Thegoal of this paper is to provide a nontechnical introduction to food safety policy and economics for students, economists and others interested in food safety policy, but new to the field.

Abstract: This paper analyzes the economic impacts of climate change-induced adjustments on the performance of the Tanzanian economy, using a countrywide CGE (computable general equilibrium) model. The generalequilibrium framework enables comparison of the effects of climate change to the overall growth of the economy because responsiveness to shocks is likely to depend on the macroeconomic structure of the economy. Effect of overall climate change on agricultural productivity is projected to be relatively limited until approximately 2030 and become worse thereafter. Our simulation results indicate that, despite the projected reduction in agricultural productivity, the negative impacts can potentially be quite limited. This is because the time scales involved and the low starting point of the economy leave ample time for factor substitutability (i.e., replacing reduced land productivity with increased use of capital and labor) and increased overall productivity. This indicates that policies that give farmers opportunity to invest in autonomous climate adaptation, as well aspolicies that improve the overall performance of the economy, can be as important for reducing the impacts of climate change in the economy as direct government policies for climate adaptation. The study results can inform policymakers when choosing between direct climate-change adaptation policies or measures aimed at strengthening the fundamentals of the economy, as ways of insulating against external shocks.