Sources of Growth in French Agriculture

Abstract

Growth of French agriculture is addressed with production disaggregated among cereals, noncereal crops, milk, and animal products. Short-run and long-run supply functions are derived from a restricted profit function model in which capital and family labor are assumed quasi-fixed and measures of French public agricultural research expenditures and international technology availability are included. Production is found to be price responsive, but the estimated supply functions are inelastic even when the quasi-fixed factors adjust optimally. Technical change as a source of output growth is also supported. Domestic research is estimated to be the primary cause of increased cereals output over the 1960-84 period, while international technology transfers and domestic research seem to be important for milk production.

SUPPLY AND DEMAND FUNCTIONS FOR UK AGRICULTURE: BIASES OF TECHNICAL CHANGE AND THE RETURNS TO PUBLIC R&D

“…Thus, more recent studies, such as Sidhu and Baanante (1981) have employed dual flexible functional forms and have extended the analysis to incorporate multi le outputs (McKay et al, 1983, Weaver, 1983. Brown and Christensen (19817 adapted the short-run model to incorporate "the full static equilibrium conditions for a quasi-fixed input", allowing estimation of the long-run equilibrium levels of quasi-fixed inputs and thus the optimal long-run levels of outputs and variable inputs, conditional on the levels of quasi-fixed inputs (Bouchet et al, 1989). This approach avoids restrictive assumptions as to the nature of short-run disequilibrium and leads naturally to estimates of the returns to R&D. It also avoids using a time trend as an index of technology, which Clark and Youngblood (1992) demonstrate to be incompatible with difference-stationary production and price data.…”

Estimating the price elasticity of demand for family and hired farm labour in England and Wales

“…Using the Autoregressive Distributed Lag (ADL) It must be noted at this stage that the definitions of the framework, a labour demand model can be estimated in the short-run differ between different approaches. The profit form function systems approaches of Bouchet et al (1989) and in k n Khatri (1994) for example, define the short-run as the period Y t = a + 1 "liYr-i+ 2 x $ ' j t x j i -j +~r over which there is quasi-fixity in inputs, and the long-run i= 1 j = l i -0…”

“…The equations assume inputs and outputs are always at optimal levels given each price combination and the vector of quasifixed and fixed input quantities. From the system of equations, the short run price elasticities can be derived and by employing the 'full static equilibrium conditions' for the quasi-fixed inputs, we can derive the long run elasticities (Bouchet et al, 1989;Khatri, 1994). The approach used here however, combines the system model with the ECM framework to develop a system similar to that employed by Blundell (1982, 1983).…”

“…'Estimation of the full ECM in one step was not possible due again to limited degrees of freedom. Downloaded by [Florida Atlantic University] at 19:02 27 August 2015 inputs in the profit or cost function and thus allow for a partial equilibrium approach, deriving the long run solutions by setting the shadow prices of the quasi-fixed inputs to their market prices (Brown and Christensen, 1981;Bouchet et al, 1989;Khatri, 1994). The advantage of the ECM system is that it allows the investigation of short and long run responses in the system, taking into account the time-series properties of the variables (hence splitting I(1) and I(0) variables) and allowing a general adjustment mechanism (nesting various common dynamic models).…”

The economic consequences of reduced fertilizer use: A virtual pricing approach

“…The reduced levels of fertilizer use represent profit maximizing levels consistent with a virtual price that may require reducing the The methodology for decomposing output growth followed the approach used by Bouchet et al (1989) and by Quiroga and Bravo-Ureta (1992). The results of this analysis are available from the authors upon request.…”