2018

Alistair Campbell, M.Sc. Candidate

Business risk management (BRM) programs can help reduce the risk inherent in the agricultural industry that is associated with income variability. These programs are commonly in the form of insurance (yield insurance, net margin insurance, etc.). There is a vast literature on investment decision under risk and uncertainty, but there exists a gap in empirical analysis of the risk-reducing effect BRM programs have on investment. This project examines the relationship between Canadian BRM programs, specifically AgriStability/CAIS and production insurance, and on-farm capital investment. This is done using theory and empirical analysis under a risk-balancing framework put forward by Gabriel and Baker (1980). Previous papers have researched BRM programs using the risk-balancing approach, but do not separate investment from other factors that influence the level of financial risk (Uzea et al. 2014; de Mey et al. 2014). Analysis on repeated cross-sectional data from the Farm Financial Survey is conducted. Results show that there exists a significant and positive correlation between Canadian BRM programs and the decision to invest. Results also show that BRM program participation is positively correlated with higher levels of financial risk, consistent with the risk balancing theory, as well as findings by Uzea et al. (2014). Understanding the effects of BRM programs on investment is important for designing and directing Canadian agricultural policy, with implications for technology adoption and long-term farm productivity.

Dr. Chad Lawley
Associate Professor, Agribusiness & Agricultural Economics
University of Manitoba
An underlying issue in discussions of farmland ownership restrictions is their impact on farmland values and on land acquisition costs for local farmers. In this article, I examine the farmland value consequences of relaxing a particularly stringent farmland ownership restriction in the Canadian province of Saskatchewan. The Saskatchewan Farm Security Act was introduced in 1974 and prohibited non-Saskatchewan residents and corporations from owning Saskatchewan farmland. In 2003, the Act was amended to allow Canadian residents and Canadian corporations to acquire farmland, bringing Saskatchewan in line with neighboring provinces and states that restrict foreign ownership but are open to domestic ownership. I estimate the impact of the 2003 amendment on Saskatchewan farmland values using 1995 through 2010 parcel-level farmland transactions in Saskatchewan and its neighboring province of Manitoba. The impact of the 2003 amendment is assessed in a series of econometric models that use differential trends in farmland prices in the two provinces before and after the amendment. I find that the 2003 amendment led to a 1.9 to 3.1% per year increase in Saskatchewan farmland values.

Modern farm machinery captures geocoded data on all aspects of a farming operation. These detailed datasets are called big data. Although some of this data is useful to individual farmers, much of it has little value to the farmer that collects it. Capturing the true value of big data comes when it is aggregated over many farms, allowing researchers to find underlying trends.

To analyze farmers’ willingness to share data we conduct a hypothetical choice experiment that asked farmers in Saskatchewan whether they would join a big data program. The choice tasks varied the type of organization that operated the big data program, and included financial and non-financial incentives. Heteroscedastic and random effects probit models are presented using data from a survey constructed for this study. The results are consistent across models and find that farmers are most willing to share their data with university researchers, followed by crop input suppliers or grower associations, and financial institutions or equipment manufacturers. Farmers are least willing to share their data with government. Farmers are more willing to share data in the presence of a financial incentive or non-financial incentive such as comparative benchmark statistics or prescription maps generated from the data submitted.

Many recreational fisheries are managed under regulated open access governed by seasonal closures and bag limits. This approach has often promoted a “race to the fish” with cascades of shorter seasons and shrinking bag limits. These effects have been particularly conspicuous in the Gulf of Mexico (GOM) red snapper fishery, where season lengths have fallen to weeks or even days per year. This paper uses data on recreation demand for for-hire offshore fishing trips in the GOM to understand the welfare implications of status-quo management. We estimate a travel cost demand model that focus on intertemporal substitution and incorporate a flexible, individualized approach to measuring how people value their leisure time. We find substantial improvements in angler welfare in moving towards a more efficient and flexible approach – such as a catch share system.