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Irz, X., & Kuosmanen, N. (2013). Explaining growth in demand for dairy products in Finland: an econometric analysis. Food Economics, 9(sup5), 47–56.
Abstract: The dairy sector represents the cornerstone of Finnish agriculture but faces new challenges linked to the decoupling of farm subsidies and abolition of milk production quotas. Because of its increasing exposure to market forces, the sector must anticipate future changes in demand and deliver precisely what Finnish consumers want. This paper contributes to that goal by analyzing retroactively the drivers of demand for dairy products over the period 1975–2010 using National Accounts Data. After presenting the evolution of consumption for dairy products, we estimate a complete system of demand for food and dairy products and use it to decompose demand growth into a substitution effect, income effect, and trend effect. The analysis points to the severity of the challenges that the sector is facing. Stagnant consumption is at least partially the result of continuous but adverse taste changes, and as Finnish consumers grow more prosperous, they allocate an increasingly smaller share of their food budget to the dairy group. The low own-price elasticity of demand for dairy products also limits the benefits to the sector of growth in milk production. Hence, business-as-usual will result in the dwindling importance of the dairy sector in the Finnish food chain. Innovation and product differentiation, perhaps emphasizing the attributes of livestock production processes, are clearly required to counter this evolution.
Keywords: Consumption; food; almost ideal demand system; decomposition; elasticities; milk; demand analysis; farm
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Jägermeyr, J., Gerten, D., Heinke, J., Schaphoff, S., Kummu, M., & Lucht, W. (2015). Water savings potentials of irrigation systems: global simulation of processes and linkages. Hydrol. Earth System Sci., 19(7), 3073–3091.
Abstract: Global agricultural production is heavily sustained by irrigation, but irrigation system efficiencies are often surprisingly low. However, our knowledge of irrigation efficiencies is mostly confined to rough indicative estimates for countries or regions that do not account for spatiotemporal heterogeneity due to climate and other biophysical dependencies. To allow for refined estimates of global agricultural water use, and of water saving and water productivity potentials constrained by biophysical processes and also nontrivial downstream effects, we incorporated a process-based representation of the three major irrigation systems (surface, sprinkler, and drip) into a bio- and agrosphere model, LPJmL. Based on this enhanced model we provide a gridded world map of irrigation efficiencies that are calculated in direct linkage to differences in system types, crop types, climatic and hydrologic conditions, and overall crop management. We find pronounced regional patterns in beneficial irrigation efficiency (a refined irrigation efficiency indicator accounting for crop-productive water consumption only), due to differences in these features, with the lowest values (< 30 %) in south Asia and sub-Saharan Africa and the highest values (> 60 %) in Europe and North America. We arrive at an estimate of global irrigation water withdrawal of 2469 km(3) (2004-2009 average); irrigation water consumption is calculated to be 1257 km(3), of which 608 km(3) are non-beneficially consumed, i.e., lost through evaporation, interception, and conveyance. Replacing surface systems by sprinkler or drip systems could, on average across the world’s river basins, reduce the non-beneficial consumption at river basin level by 54 and 76 %, respectively, while maintaining the current level of crop yields. Accordingly, crop water productivity would increase by 9 and 15 %, respectively, and by much more in specific regions such as in the Indus basin. This study significantly advances the global quantification of irrigation systems while providing a framework for assessing potential future transitions in these systems. In this paper, presented opportunities associated with irrigation improvements are significant and suggest that they should be considered an important means on the way to sustainable food security.
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Lehtonen, H. S., & Irz, X. (2013). Impacts of reducing red meat consumption on agricultural production in Finland. Agriculture and Food Science, 22(3), 356–370.
Abstract: This paper summarises the simulated effects on Finnish agrcultural production and trade of a 20% decrease in Finnish demand for red meat (beef, pork, lamb). According to our results, reduced red meat consumption would be offset by increased consumption of poultry meat, eggs, dairy products and fish, as well as small increases in consumption of fruits and vegetables, peas, nuts, cereal products and sweets. By including the derived demand changes in an agricultural sector model, we show that livestock production in Finland, incentivised by national production-linked payments for milk and bovine animals, would decrease by much less than 20% due to the complex nature of agricultural production and trade. Overall, assuming unchanged consumer preferences and agricultural policy, a 20% reduction in red meat consumption is not likely to lead to a substantial decrease in livestock production or changed land use, or greenhouse gas emissions, from Finnish agriculture.
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Lotze-Campen, H., von Lampe, M., Kyle, P., Fujimori, S., Havlik, P., van Meijl, H., et al. (2014). Impacts of increased bioenergy demand on global food markets: an AgMIP economic model intercomparison. Agric. Econ., 45(1), 103–116.
Abstract: Integrated Assessment studies have shown that meeting ambitious greenhouse gas mitigation targets will require substantial amounts of bioenergy as part of the future energy mix. In the course of the Agricultural Model Intercomparison and Improvement Project (AgMIP), five global agro-economic models were used to analyze a future scenario with global demand for ligno-cellulosic bioenergy rising to about 100 ExaJoule in 2050. From this exercise a tentative conclusion can be drawn that ambitious climate change mitigation need not drive up global food prices much, if the extra land required for bioenergy production is accessible or if the feedstock, for example, from forests, does not directly compete for agricultural land. Agricultural price effects across models by the year 2050 from high bioenergy demand in an ambitious mitigation scenario appear to be much smaller (+5% average across models) than from direct climate impacts on crop yields in a high-emission scenario (+25% average across models). However, potential future scarcities of water and nutrients, policy-induced restrictions on agricultural land expansion, as well as potential welfare losses have not been specifically looked at in this exercise.
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Nelson, G. C., van der Mensbrugghe, D., Ahammad, H., Blanc, E., Calvin, K., Hasegawa, T., et al. (2014). Agriculture and climate change in global scenarios: why don’t the models agree. Agric. Econ., 45(1), 85.
Abstract: Agriculture is unique among economic sectors in the nature of impacts from climate change. The production activity that transforms inputs into agricultural outputs involves direct use of weather inputs (temperature, solar radiation available to the plant, and precipitation). Previous studies of the impacts of climate change on agriculture have reported substantial differences in outcomes such as prices, production, and trade arising from differences in model inputs and model specification. This article presents climate change results and underlying determinants from a model comparison exercise with 10 of the leading global economic models that include significant representation of agriculture. By harmonizing key drivers that include climate change effects, differences in model outcomes were reduced. The particular choice of climate change drivers for this comparison activity results in large and negative productivity effects. All models respond with higher prices. Producer behavior differs by model with some emphasizing area response and others yield response. Demand response is least important. The differences reflect both differences in model specification and perspectives on the future. The results from this study highlight the need to more fully compare the deep model parameters, to generate a call for a combination of econometric and validation studies to narrow the degree of uncertainty and variability in these parameters and to move to Monte Carlo type simulations to better map the contours of economic uncertainty.
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