Purpose The purpose of this paper is to identify sources and quantifying distortions to agricultural incentives to produce along the small ruminant value chains in Ethiopia. Design/methodology/approach National and district level average nominal rate of protection (NRPs) were computed for a five-year period (2010–2015). The authors developed four scenarios based on combinations of the different data generation processes employed in relation to each of the key variables. Findings The NRPs at farm gate and retail market for both sheep and goats are negative indicating a strong deviation of producer and retailer prices from the comparable export prices over the five-year period. Policy induced distortions were separated from market inefficiencies through use of data on access costs throughout the value chain. These access costs are positive and significant in value. It is clear that market inefficiencies are also due to government policy to a certain extent. Research limitations/implications This study focuses only on sheep and goat value chains and covers only five-year period. This certainly limits the extrapolability of the results. Originality/value This study presents the extent to which smallholder livestock keepers are discouraged through disincentives in a unique context. This is the first study done on small ruminant value chains in the developing world.
Understanding how policies affect price transmission and incentives for producers and consumers along the complete value chain is a relevant research question due to the more globalized structure of agricultural value chains. In particular, Nigerian agricultural value chains have been targeted by a number of policy decisions. We analyze the import‐oriented palm oil value chain and the export‐oriented cacao value chain, estimating the price distortions from policies and their implications for production incentives at the regional level. For palm oil, due to protective trade policies and domestic initiatives, the nominal rate of protection (NRP) at the farmgate for palm oil producers shows that producers have been protected. NRPs at the border for cacao beans and cocoa products are negative, which may be due to a quality gap, the export market structure, and the concentration of buyers in global markets. Negative NRPs at the farmgate are seen for all regions, showing disincentives in the cacao beans export market reverberate through the domestic market despite domestic support policies. In both value chains, NRPs at farmgate vary across regions partially due to regional policy frameworks and partially due to local conditions impacting price transmission.
We extend the nominal rate of protection (NRP) methodology to a value chain framework. We develop our methodology for three types of value chains: a new value chain created by policy, a value chain in which a by-product is created in the processing of a commodity, and a value chain in which processing of a commodity generates new product(s). We consider two cases of value chains: when the commodity is tradable and when it is non-tradable. The proposed indicator, value chain NRP, allows policy-makers to see an aggregate measure of all policy impacts on all the commodities and products in the value chain, normalised at the farm level. We apply the methodology to selected value chains in India. Our results indicate that farmers are subsidised, but at different rates. Both sugarcane producers and sugar producers are protected, but sugar producers are protected at higher rates. Producers of downstream products such as ethanol and molasses are taxed, whereas the crushing industry is subsidised. We observe that there is increasing protection along the value chain from commodity to product for the oilseeds sector, whereas the picture is less clear for the sugarcane value chain.
Perennial bioenergy crops provide substantial carbon mitigation benefits but have risky returns. We couple economic analysis with a biogeochemical model (DayCent) to examine the effect of carbon mitigation payments on the spatially varying bioenergy crop returns and risk profiles relative to conventional crops across the rainfed United States. These payments increase the likelihood of positive profit in the Midwest for miscanthus and southern states for switchgrass. At low biomass prices, these payments make bioenergy crops appealing to risk‐averse farmers. At moderate biomass prices, these payments make bioenergy crops appealing to all farmers regardless of risk preference.
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