Economic incentives for land use change: evidence from Lantapan Ian Coxhead & Bayou Demeke University of Wisconsin.

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  • Economic incentives for land use change: evidence from LantapanIan Coxhead & Bayou DemekeUniversity of Wisconsin

  • Farmers and markets in uplandsPrevious assumption: semi-subsistence productionUpland farmers beyond reach of markets & policiesImplication: direct intervention needed for devt or conservation Projects, command/control approaches to w/shed mgtBut non-market strategies now lag behind reality of commercialized ag.

  • Salespct

    52.6

    100

    76.9

    91.6

    90.9

    92.1

    79.9

    Source: SANREM data

    Sales as percent of major crops,Lantapan, 1994

    Sheet1

    Crop% production sold

    Corn52.6

    Sugarcane100

    Coffee76.9

    Potato91.6

    Cabbage90.9

    Chn Cabb.92.1

    Beans79.9

    Source Coxhead 1995.

    Sheet2

    Sheet3

  • Yellow corn prices, Lantapan farm gate and Agora wholesale market, Cag. de Oro (SANREM data)

    Chart2

    3.9534608

    4.0234615

    4.0834622

    4.2234629

    4.3834639

    4.4534646

    3.734653

    3.734660

    4.2534669

    4.534676

    4.6534683

    4.6534690

    4.985.85

    4.986.55

    6.256.95

    6.257.15

    66.5

    5.856.8

    5.956.65

    5.855.85

    5.926.5

    5.476.2

    6.186.5

    6.236.25

    6.276.9

    6.47

    6.437

    6.46.9

    6.557.45

    6.536.95

    6.656.8

    6.256.4

    6.156.45

    66.9

    6.57.05

    6.36.9

    66

    65.5

    4.55.2019486557

    4.334.9581301167

    4.374.7652788295

    4.64.6201292407

    4.834.5194157969

    4.974.4598729445

    4.534.4382351302

    4.674.4512368004

    4.54.4956124018

    4.734.5680963807

    4.934.6654231839

    54.7843272578

    5.974.9215430489

    6.855.0738050039

    7.15.2378475692

    7.15.4104051914

    7.055.5882123171

    6.55.7680033927

    6.20334331235.9465128649

    6.76.1204751801

    7.756.2866247849

    7.43396667116.4416961258

    6.56.5824236494

    6.17776042096.7055418023

    6.336.8077850309

    6.56.8858877818

    6.456.9365845016

    6.46.9566096368

    6.46.9426976338

    6.46.8915829394

    6.01156199076.8

    5.86.75

    6.156.85

    66.55

    5.556.65

    5.556.85

    5.556.65

    5.856.5

    6.01945673456.5

    6.02197555916.65

    66.75

    66.75

    5.79451922676.7

    5.56.75

    5.256.35

    56

    55.75

    4.75.45

    4.755.55

    4.555.3

    4.855.4

    4.855.35

    4.955.55

    55.55

    4.955.5

    5.055.45

    4.855.4

    4.855.55

    55.7

    55.8

    5.15.7

    5.15.6

    4.855.75

    4.75.55

    5.15.7

    5.15.85

    5.255.65

    5.155.8

    5.36

    5.355.8

    5.256.1

    5.36.6

    6.256.9

    6.257

    5.756.625

    5.656.25

    5.856.25

    5.856.35

    5.86.2

    5.46.55

    5.46.5

    5.46.65

    6.156.7

    6.156.75

    6.156.8

    5.86.6

    5.656.7

    5.50682815636.55

    5.56.7

    5.87

    66.5

    5.76.6

    5.76.75

    5.76.6

    5.7256.2

    5.7256.2

    5.7756.15

    5.8256

    65.3

    65.8

    65.8

    65.8

    5.55.8

    5.555.6

    5.555.45

    5.55.45

    65.45

    65.4

    65.45

    65.3

    75.35

    75.38

    75.35

    75.3

    55.85

    55.8

    5.055.98

    5.055.9

    5.156.1

    5.156.25

    5.26.25

    5.156

    5.056

    5.056.1

    55.9

    5.056.8

    5.056

    5.056

    5.056

    5.056.15

    6.96.2

    6.96.5

    6.96.8

    77.4

    6.97.2

    6.97.2

    6.97.2

    6.97.3

    6.057.2

    6.057.8

    6.057.2

    5.957.2

    6.89

    6.89

    6.89.4

    6.89.6

    6.858.5

    6.858.5

    6.656.5

    6.356.1

    6.46

    6.35.5

    6.455.4

    6.255.4

    45.3

    45

    3.95.1

    3.95.2

    5.25.1

    5.25.1

    5.25.1

    5.25.1

    4.655

    4.654.9

    4.74.9

    4.64.45

    4.24.45

    4.24.7

    4.24.9

    4.155.25

    5.75.4

    5.65.2

    5.54.95

    5.35.25

    5.655.25

    5.65.2

    5.55.3

    55.25

    5.25.3

    55.05

    5.15.35

    65.15

    4.55.45

    4.55.45

    55.35

    55.35

    6.055.35

    6.055.3

    6.055.4

    6.055.35

    3.855.1

    3.854.9

    3.854.85

    3.954.75

    5.95.1

    6.0254.4

    6.14.4

    5.954.4

    5.655

    5.655

    5.55.05

    5.455.5

    5.56.4

    5.55.95

    5.45.85

    5.45.85

    5.25.85

    5.55.85

    5.56.05

    5.56.25

    364966.9

    365036.85

    365106.9

    365177.2

    Lantapan

    Agora

    Pesos per kg.

    Sheet1

    YEARMONTHIDDLantapanMalabalayAgora

    10/1/941013.954.6110/1/94

    10/8/941024.024.2310/8/94

    10/15/941034.084.1610/15/94

    10/22/941044.224.1610/22/94

    11/1/941154.384.511/1/94

    11/8/941164.454.2511/8/94

    11/15/941173.74.1511/15/94

    11/22/941183.74.511/22/94

    12/1/941294.255.0512/1/94

    12/8/9412104.55.3512/8/94

    12/15/9412114.655.412/15/94

    12/22/9412124.655.4512/22/94

    1/1/951134.985.65.851/1/95

    1/8/951144.986.456.551/8/95

    1/15/951156.256.76.951/15/95

    1/22/951166.256.77.151/22/95

    2/1/9521766.46.52/1/95

    2/8/952185.856.16.82/8/95

    2/15/952195.956.46.652/15/95

    2/22/952205.856.25.852/22/95

    3/1/953215.926.46.53/1/95

    3/8/953225.475.86.23/8/95

    3/15/953236.186.26.53/15/95

    3/22/953246.236.61740306976.253/22/95

    4/1/954256.276.756.94/1/95

    4/8/954266.46.7574/8/95

    4/15/954276.436.7574/15/95

    4/22/954286.46.86.94/22/95

    5/1/955296.556.857.455/1/95

    5/8/955306.536.656.955/8/95

    5/15/955316.656.456.85/15/95

    5/22/955326.256.556.45/22/95

    6/1/956336.156.656.456/1/95

    6/8/9563466.86.96/8/95

    6/15/956356.56.927.056/15/95

    6/22/956366.36.966.96/22/95

    7/1/9573766.367/1/95

    7/8/9573866.25.57/8/95

    7/15/957394.55.155.20194865577/15/95

    7/22/957404.334.44.95813011677/22/95

    8/1/958414.374.834.76527882958/1/95

    8/8/958424.64.854.62012924078/8/95

    8/15/958434.835.154.51941579698/15/95

    8/22/958444.975.14.45987294458/22/95

    9/1/959454.535.024.43823513029/1/95

    9/8/959464.675.074.45123680049/8/95

    9/15/959474.55.084.49561240189/15/95

    9/22/959484.735.124.56809638079/22/95

    10/1/9510494.935.264.665423183910/1/95

    10/8/95105055.264.784327257810/8/95

    10/15/9510515.977.44.921543048910/15/95

    10/22/9510526.857.425.073805003910/22/95

    11/1/9511537.17.035.237847569211/1/95

    11/8/9511547.17.035.410405191411/8/95

    11/15/9511557.057.035.588212317111/15/95

    11/22/9511566.57.035.768003392711/22/95

    12/1/9512576.20334331235.685.946512864912/1/95

    12/8/9512586.76.056.120475180112/8/95

    12/15/9512597.756.056.286624784912/15/95

    12/22/9512607.43396667116.526.441696125812/22/95

    1/1/961616.56.426.58242364941/1/96

    1/8/961626.17776042097.426.70554180231/8/96

    1/15/961636.336.586.80778503091/15/96

    1/22/961646.56.436.88588778181/22/96

    2/1/962656.457.036.93658450162/1/96

    2/8/962666.46.86.95660963682/8/96

    2/15/962676.46.276.94269763382/15/96

    2/22/962686.476.89158293942/22/96

    3/1/963696.01156199076.676.83/1/96

    3/8/963705.86.676.753/8/96

    3/15/963716.156.436.853/15/96

    3/22/9637266.236.553/22/96

    4/1/964735.556.46.654/1/96

    4/8/964745.556.46.854/8/96

    4/15/964755.556.46.654/15/96

    4/22/964765.856.036.54/22/96

    5/1/965776.01945673456.16.55/1/96

    5/8/965786.02197555916.16.655/8/96

    5/15/9657966.156.755/15/96

    5/22/9658066.356.755/22/96

    6/1/966815.79451922676.36.76/1/96

    6/8/966825.56.46.756/8/96

    6/15/966835.256.26.356/15/96

    6/22/9668455.366/22/96

    7/1/9678555.35.757/1/96

    7/8/967864.75.35.457/8/96

    7/15/967874.755.455.557/15/96

    7/22/967884.555.55.37/22/96

    8/1/968894.854.85.48/1/96

    8/8/968904.855.255.358/8/96

    8/15/968914.955.355.558/15/96

    8/22/9689255.285.558/22/96

    9/1/969934.955.255.59/1/96

    9/8/969945.055.25.459/8/96

    9/15/969954.855.25.49/15/96

    9/22/969964.855.25.559/22/96

    10/1/96109755.335.710/1/96

    10/8/96109855.535.810/8/96

    10/15/9610995.15.435.710/15/96

    10/22/96101005.15.435.610/22/96

    11/1/96111014.855.45.7511/1/96

    11/8/96111024.75.355.5511/8/96

    11/15/96111035.15.525.711/15/96

    11/22/96111045.15.45.8511/22/96

    12/1/96121055.255.355.6512/1/96

    12/8/96121065.155.555.812/8/96

    12/15/96121075.35.83612/15/96

    12/22/96121085.355.755.812/22/96

    1/1/9711095.255.56.11/1/97

    1/8/9711105.35.96.61/8/97

    1/15/9711116.256.76.91/15/97

    1/22/9711126.257.271/22/97

    2/1/9721135.756.66.6252/1/97

    2/8/9721145.655.956.252/8/97

    2/15/9721155.8566.252/15/97

    2/22/9721165.856.156.352/22/97

    3/1/9731175.86.156.23/1/97

    3/8/9731185.46.456.553/8/97

    3/15/9731195.46.46.53/15/97

    3/22/9731205.46.46.653/22/97

    4/1/9741216.156.456.74/1/97

    4/8/9741226.156.456.754/8/97

    4/15/9741236.156.456.84/15/97

    4/22/9741245.86.456.64/22/97

    5/1/9751255.656.456.75/1/97

    5/8/9751265.50682815636.46.555/8/97

    5/15/9751275.56.46.75/15/97

    5/22/9751285.86.375/22/97

    6/1/97612966.26.56/1/97

    6/8/9761305.76.26.66/8/97

    6/15/9761315.76.26.756/15/97

    6/22/9761325.76.26.66/22/97

    7/1/9771335.7256.02596517656.27/1/97

    7/8/9771345.7255.72379230846.27/8/97

    7/15/9771355.7755.4136368526.157/15/97

    7/22/9771365.8255.215654263867/22/97

    8/1/97813765.255.38/1/97

    8/8/97813865.45.88/8/97

    8/15/97813965.25.88/15/97

    8/22/97814065.555.88/22/97

    9/1/9791415.55.45.89/1/97

    9/8/9791425.555.25.69/8/97

    9/15/9791435.555.15.459/15/97

    9/22/9791445.54.655.459/22/97

    10/1/971014564.755.4510/1/97

    10/8/9710146655.410/8/97

    10/15/9710147655.4510/15/97

    10/22/971014864.95.310/22/97

    11/1/971114974.85.3511/1/97

    11/8/971115074.85.3811/8/97

    11/15/971115175.155.3511/15/97

    11/22/971115275.155.311/22/97

    12/1/971215355.155.8512/1/97

    12/8/971215455.35.812/8/97

    12/15/97121555.055.75.9812/15/97

    12/22/97121565.055.65.912/22/97

    1/1/9811575.155.556.11/1/98

    1/8/9811585.155.556.251/8/98

    1/15/9811595.25.76.251/15/98

    1/22/9811605.155.561/22/98

    2/1/9821615.055.5562/1/98

    2/8/9821625.055.556.12/8/98

    2/15/98216355.555.92/15/98

    2/22/9821645.055.556.82/22/98

    3/1/9831655.055.5563/1/98

    3/8/9831665.055.663/8/98

    3/15/9831675.055.563/15/98

    3/22/9831685.055.66.153/22/98

    4/1/9841696.95.756.24/1/98

    4/8/9841706.95.856.54/8/98

    4/15/9841716.966.84/15/98

    4/22/98417276.87.44/22/98

    5/1/9851736.977.25/1/98

    5/8/9851746.977.25/8/98

    5/15/9851756.96.97.25/15/98

    5/22/9851766.96.97.35/22/98

    6/1/9861776.056.957.26/1/98

    6/8/9861786.056.47.86/8/98

    6/15/9861796.056.77.26/15/98

    6/22/9861805.956.97.26/22/98

    7/1/9871816.86.997/1/98

    7/8/9871826.87.397/8/98

    7/15/9871836.87.69.47/15/98

    7/22/9871846.87.89.67/22/98

    8/1/9881856.858.38.58/1/98

    8/8/9881866.856.88.58/8/98

    8/15/9881876.656.36.58/15/98

    8/22/9881886.355.76.18/22/98

    9/1/9891896.45.469/1/98

    9/8/9891906.34.65.59/8/98

    9/15/9891916.454.555.49/15/98

    9/22/9891926.254.75.49/22/98

    10/1/981019344.65.310/1/98

    10/8/981019444.4510/8/98

    10/15/98101953.94.35.110/15/98

    10/22/98101963.94.25.210/22/98

    11/1/98111975.25.1011/1/98

    11/8/98111985.25.1011/8/98

    11/15/98111995.25.1011/15/98

    11/22/98112005.25.1011/22/98

    12/1/98122014.655.0012/1/98

    12/8/98122024.654.9012/8/98

    12/15/98122034.74.9012/15/98

    12/22/98122044.64.4512/22/98

    1/9/994.24.45

    1/16/994.24.7

    1/23/994.24.9

    1/30/994.155.25

    2/6/995.75.4

    2/13/995.65.2

    2/20/995.54.95

    2/27/995.35.25

    3/6/995.655.25

    3/13/995.65.2

    3/20/995.55.3

    3/27/9955.25

    4/3/995.25.3

    4/10/9955.05

    4/17/995.15.35

    4/24/9965.15

    5/1/994.55.45

    5/8/994.55.45

    5/15/9955.35

    5/22/9955.35

    6/3/996.055.35

    6/10/996.055.3

    6/17/996.055.4

    6/24/996.055.35

    7/1/993.855.1

    7/8/993.854.9

    7/15/993.854.85

    7/22/993.954.75

    8/7/995.95.1

    8/14/996.0254.4

    8/21/996.14.4

    8/28/995.954.4

    9/4/995.655

    9/11/995.655

    9/18/995.55.05

    9/25/995.455.5

    10/7/995.56.4

    10/14/995.55.95

    10/21/995.45.85

    10/28/995.45.85

    11/4/995.25.85

    11/11/995.55.85

    11/18/995.56.05

    11/25/995.56.25

    12/2/996.9

    12/9/996.85

    12/16/996.9

    12/23/997.2

    Sheet1

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    Lantapan

    Agora

    Figure2: Weekly price of yellow (feed) corn, 10/94-12/99 (pesos/kg)

  • Implications of commercializationLand values, and land use decisions depend on commercial considerations rather than household needsGreater reach of market interventions such as price and trade policiesMarket-based policies are cheaper and more efficient than direct interventionsThey affect all commercial farmers, not just those in one project area

  • Philippine upland ag. devel. policyDirect and sectoral interventions:Early (1950s): support for land to the landless programsLater (1970s+): commodity support through R&D, extension, high value crops programsPrice stabilization efforts (corn, palay) through NFATrade policiesVegetable import restrictions: cabbage, potato bans; binding WTO tariffs @ 100% (David 2003)Rising protection for corn and sugar producers -- in spite of WTO accession.

  • Trends in nominal protection rates for corn and sugar (%)Source: David 2003, Table 6.7.

    Crop1970-791980-841985-891990-941995-2000Corn2426677687Sugar54215481106

  • Sheet3

    Sheet2

    COrn NPR

    5854

    3025

    9673

    7658

    9082

    10495

    5460

    9379

    7349

    151110

    145111

    Yellow corn

    White corn

    Source: ISPPS

    Corn: Nominal Protection Rate (per cent)

    corn

    Table 2. Tariff rates, importation, exportation, other uses for corn and Nominal Protection Rates, Philippines, 1990-2000.

    ITEMPre GATT-WTODuring GATT-WTO

    Ave19901991199219931994199519961997199819992000200120022003Ave

    Tariff rate (%)20.0020.0020.0020.0020.0020.0020.00-------

    In-quota tariff rate (%)-------35.00*35.00**35.0035.00***35.0035.003535-

    Out-quota tariff rate (%)-------100.00*80.00**80.0065***65.0065.006550****-

    World price

    US $/MT108.87109.00107.00104.00102.10107.60123.50165.80117.10102.0075.3373.92106.83

    Peso/MT2,838.522,649.002,940.002,654.002,769.902,842.503,175.704,346.603,451.004,171.002,944.573,266.523,635.94

    Exchange rate (PhP/US$)26.0924.3127.4825.5127.1226.4225.7126.2229.4740.8939.0944.1935.97

    Imports ('000 MT)-353.93----206.59558.13334.06367.83177.08625.88412.60

    MAV Allocation ('000 MT)-------200.06144.62154.27163.91173.55183.19192.83202.48176.86

    % of MAV imported-------99.1371.7625.85-73.0941.3024.1572.39

    Exports ('000 MT)3.380.0920.070.000.020.040.070.020.020.170.060.250.10

    Seeds ('000 MT)65.2376.0071.7966.6362.9960.1253.8554.7154.5247.0852.8450.2151.87

    Feeds and Waste ('000 MT)3,090.183,434.003,365.053,002.293,118.642,937.552,683.542,698.352,816.072,485.072,979.982,932.222,782.34

    Per capita consumption (kg/yr)15.9615.9717.3918.0015.4313.2215.7316.8515.7814.9717.6918.5816.77

    Nominal Protection Rate (%)

    Yellow corn765830967690104549373151145103

    White corn6454257358829560794911011182

    * Effective May 3, 1996

    ** Effective July 1, 1997

    *** Effective July 1, 1999

    ****starting July 1, 2003

    De la Pea, B. and Noveno, Ma. L. Philippine Implementation of the WTO Commitment on Agricultural Report for the Accelerated Growth,

    Investment and Liberatlization with Equity Project. DA, Diliman, Quezon City.

    potato

    Table 1. Tariff rates, importation, exportation, and other use for potato and cabbage, Philippines, 1990-2000.

    ITEMPre GATT-WTODuring GATT-WTO

    199019911992199319941995Ave19961997199819992000200120022003Ave

    Potato

    Tariff rate (%)50.0050.0047.5042.50---------

    In-quota tariff rate (%)-------50**45*45.0045.0045.0045.004035***43.75

    Out-quota tariff rate (%)-------100**80*80.0060.00*60.0060.005040***67.14

    Exchange rate (PhP/US$)24.3127.4825.5127.1226.4225.7126.0926.2229.4740.8939.0944.1935.97

    Seeds ('000 MT)0.110.240.260.230.250.130.200.150.15---0.15

    Feeds and Waste ('000 MT)4.003.237.787.057.374.275.624.254.36---4.31

    Per capita consumption (kg/yr)0.592.081.691.501.500.871.370.850.85---0.85

    Cabbage

    Tariff rate (%)50.0050.0047.5040.0035.0030.0042.08------504045.00

    In-quota tariff rate (%)-------30.00**30.0030.0030.0030.00---30.00

    Out-quota tariff rate (%)-------100**80*80.0060*60.00---76.00

    Exchange rate (PhP/US$)24.3127.4825.5127.1226.4225.7126.0926.2229.4740.8939.0944.1935.97

    Seeds (MT)31.9240.6537.3038.3739.5031.5636.5529.4429.0727.10--28.54

    Feeds and Waste ('000 MT)9.3813.6712.0712.4012.1010.4011.677.857.676.84--7.45

    Per capita consumption (kg/yr)1.752.502.162.182.031.742.061.291.231.08--1.20

    Sour

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