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We investigate two puzzles in the export duration literature. The first puzzle has to do with the frequent entries and exits of firms in export markets, which are at odds with the large fixed export costs in such markets. We introduce convex production technologies in a trade model to show how variable marginal costs create direct linkages between export markets. As fixed export costs vary across destinations, more productive firms need not necessarily export to more destinations. Cost convexity implies that the probability of supplying a given export market is adversely affected by positive export shocks in other markets. This is supported by our empirical analysis of bilateral flows for over 200 agri-food products to 176 destinations originating from six large exporting countries. The second puzzle has to do with the paradoxical effect of tariffs reported in empirical export duration studies. When endogeneity is addressed, tariffs increase the probability of an export failure., Dans cet article, nous tentons de réconcilier deux constats empiriques en lien avec la durée des exportations et les théories du commerce international. Tout d’abord, les entrées et sorties fréquentes observées des entreprises sur les marchés d’exportation sont en contradiction avec les théories modernes pour lesquelles les coûts d’exportation fixes ont un rôle central dans les décisions d’exportation. Nous introduisons des couts marginaux de production non constants dans un modèle de commerce international et montrons comment les coûts marginaux variables créent des liens directs entre les différents marchés d’exportation. La convexité des coûts implique que la probabilité de maintenir son activité d’exportation vers un pays dépend négativement des chocs positifs d’exportation vers d’autres marchés. Notre analyse empirique des flux bilatéraux de plus de 200 produits agroalimentaires vers 176 destinations, provenant de six grands pays, confirme cette hypothèse. Ensuite, on questionne l’effet positif paradoxal des tarifs douaniers dans les études empiriques sur la durée des exportations. Lorsque l’endogénéité des tarifs est prise en compte, l’effet devient négatif en accord avec la théorie.

This study compares two methods of predicting the willingness to pay for drinking-water delivery systems in the semi-urban Sahara as a function of the hypothetical characteristics of possible water delivery points. The first, a linear regression model, predicts the monetary amount a household should be willing to pay for each bucket of water from the source. The second, a LOGIT model, explains the decision to purchase water or not. Both methods are based on the full-price budget constrained model of standard demand theory — which explains quantity demanded as a function of prices and the opportunity cost of time spent on consumption. The most consistently significant explanatory variable in our empirical models is the relative distance to the planned new source compared to the best existing source., Consentement à payer pour de l'eau potable au Sahara : le cas de Douentza au Mali La présente étude compare deux méthodes de prévision du consentement à payer pour de l'eau potable dans des systèmes d'adduction en région semi-urbaine au Sahara. Les deux modèles sont estimés en fonction des caractéristiques hypothétiques de divers points d'adduction possibles. Le premier modèle, reposant sur une régression multiple, prévoit la somme d'argent qu'un ménage consentira à payer pour chaque seau d'eau potable provenant d'une source donnée. Le second modèle, employant une spécification de type logit, vise à expliquer la décision d'acheter ou non de l'eau potable. Les deux approches reposent sur le modèle de prix complets tel que proposé par la théorie de la demande. Ce modèle explique la quantité d'eau demandée en fonction des prix et du coût d'opportunité du temps affecté à la consommation. Dans nos modèles empiriques, la variable explicative qui s'avère la plus significative est la proximité de la nouvelle source prévue divisée par la distance à la meilleure source existante., Calkins Peter, Larue Bruno, Vézina Marc. Willingness to pay for drinking water in the Sahara : the case of Douentza in Mali. In: Cahiers d'Economie et sociologie rurales, N°64, 3e trimestre 2002. pp. 37-56.

This paper aims to study the impact of growth and trade openness on the environment at the regional level. We find support for the environmental Kuznet Curve hypothesis for CO2 emissions in Africa, Asia and OECD countries. We find that the pollution haven hypothesis is supported for CO2 in Africa, the Middle East and North Africa, the former United Socialist Soviet Republic and Eastern Europe, and South America, but not for Asia, for which the pollution halo hypothesis could not be rejected. The pollution haven hypothesis is also supported for SO2 emissions in South America while the pollution halo holds for SO2 emissions in Africa. We show that local investment is contributing significantly to both CO2 and SO2 emission increases in most regions while trade openness matters only in OECD and South America.

Specific tariffs are more commonly applied in agriculture than in the rest of the economy. We argue that the volatility of agricultural commodity markets is a contributing factor by showing that higher expected welfare can be achieved with the optimal specific tariff than with its ad valorem counterpart in the presence of volatile market conditions in the exporting countries. Contrary to popular wisdom, more volatility does not warrant higher tariffs unless the distribution of the foreign autarky price is negatively skewed. For arbitrary specific tariffs, the transformation into ad valorem equivalents may decrease or increase the volume of trade and the world price. We also show that countries with more restrictive specific tariffs are less likely to pursue tariff simplification. We estimate a gravity model about beef trade and find that specific tariffs have a small reducing effect, beyond the effect stemming from their ad valorem equivalent rate.

We study the impact of public quality standards on industry structure and trade when firms may be able to develop their own private standard with a higher quality than the public standard. To reach our goal, we introduce vertical differentiation in an international trade model based on monopolistic competition in which firms differ in terms of their productivity and select non cooperatively the quality of their product. Firms must incur two fixed export costs when exporting to any given destination: a generic one (i.e., setting up a distribution system) and a destination‐specific one to meet the quality standard prevailing in the importing country. Variable costs are also increasing in quality. Not surprisingly, the absolute mass of firms in any given country is decreasing in the domestic standard, but contrary to popular wisdom, the relative mass (market share) of foreign firms is increasing in the domestic standard. A relatively lower (higher) wage (labour endowment) in the exporting country helps foreign firms gain market share in the domestic market. We also show that the ratio of minimum productivity required for foreign firms and for domestic firms to be active in the domestic market is increasing in trade costs, but decreasing in quality. The implication for public policy is that lowering tariffs and increasing quality standards benefit highly productive foreign firms which gain from the quality‐induced exit of less productive domestic and foreign firms. Welfare is concave with respect to quality and governments have an incentive to impose standards, but some firms have an incentive to impose higher private standards.

The paper analyzes the welfare impacts of trade liberalization under multiple marginalization through a spatial quilibrium model of provincial dairy markets. Canada’s dairy policy implements a supply management scheme designed to achieve higher domestic prices for farmers, taking into account the mark-up rules used by downstream firms. Our model builds on the reciprocal dumping model of Brander and Krugman (1983) as processing firms from different provinces compete à la Cournot with one another in several provinces. Simulations reveal that welfare in the Canadian dairy sector could increase by as much as $1 billion per year if aggressive tariff cuts were made while moderate liberalization plans would yield annual gains of $234.5 million. Even large producing provinces like Quebec and Ontario gain from trade liberalization. In comparison, a perfect competition model yields more modest welfare gains in the range of $15.6 million and $34.5 million. Finally, we show that the switch in the sign of the transport cost-welfare relation identified by Brander and Krugman (1983) occurs at transport costs that are too high to be policy-relevant.

This paper empirically investigates the implications of the imposition of convexity in output prices and concavity in factor endowments on flexible functional forms for the GNP function. Using macroeconomic data for Switzerland, we estimate the Translog and the Symmetric Normalized Quadratic forms to investigate the manner with which curvature restrictions are imposed, the extend of curvature violations and the robustness of estimated elasticities. We also compare the predictive accuracy of the aforementioned flexible functional forms. Our result show that concavity in factor endowments is violated much more often than convexity in output prices. For the Translog, the date at which local restrictions are imposed matters a great deal in terms of remaining curvature violations in the sample, but far less for estimated elasticities. In contrast, we found that the size and sign of elasticities vary across functional forms. In-sample forecasting analysis demonstrates that the Translog model significantly dominates the Symmetric Normalized Quadratic.

We analyze the effects of mergers and the introduction of concurrent marketing mechanisms on the seller’s revenue, price trend and efficiency in sequential auctions under complete information with asymmetric bidders. First, we provide conditions for bidders to be strategic when the number of objects is less or greater than the number of bidders as this impacts upon the set of possible mergers. Second, we show that mergers may simultaneously increase the seller’s revenue and improve efficiency. Third, we show that having a marketing mechanism working alongside the auction can increase or decrease the average auction price. We use weekly data about Quebec’s daily hog auction to ascertain the effects of a merger and of changes in the weights of concurrent marketing mechanisms on daily auction prices. Our empirical analysis relies on an endogenous structural change test which detected three breaks corresponding to: i) the introduction of a new concurrent mechanism, ii) a joint-venture partnership of the two largest hog processing firms and iii) an announcement by Canada’s Competition Bureau authorizing the full merger of the same two firms.

The imposition of new cheese compositional standards by the Canadian authorities has created divisions within the Canadian dairy industry and has motivated criticisms from several of Canada’s trade partners. The standards impose minimum limits on the percentage of casein coming from fluid milk which vary across cheese types. We develop a theoretical model to investigate the implications of Canada’s compositional cheese standards while accounting for Canada’s tariff rate quota specificities. The “use it or lose it“ clause on import permits makes it possible for cheeses not directly constrained by the standards to be strongly impacted. We also show that the regulations on cheese composition may or may not increase the domestic demand for milk. Without information on technical coefficients in the cheese industry, we were unable to resolve through empirical simulations the ambiguities arising from our theoretical results. Our empirical investigation focused instead on the pricing and composition of cheese imports. We identified structural breaks in the processes determining import unit values shortly before or shortly after the beginning of the implementation of the standards. We found differences in break dates across cheese types and also across countries supplying the same type of cheese. Thus, the standards had some impact on the market shares of our trade partners as well as inflationary effects on cheese prices.

A supply management system governs Canada’s poultry sector. Tariff Rate Quotas (TRQs), with prohibitive above-quota tariffs and low in-quota tariff, mimic import-quotas limit international competition in Canada’s poultry market. The quota part of the TRQs is a minimum access commitment under international trade agreement that is defined as a fraction of domestic production. We show in a 3-stage game involving negotiations between retailers and processors and between processors and farms that increasing minimum access commitment under current trade agreements can produce Metzler effects with larger price increases observed at the farm and processing levels. Simulations based on 2008 data support the Metzler paradox and shed light on import license allocations between retailers and poultry processors in Canada.

We outline new data on non-tariff measures (NTMs) in agricultural trade collected as part of the NTM-Impact project. The data cover product and process standards, conformity assessment measures, and country requirements for the EU and 10 other countries. We create a Heterogeneity Index of Trade (HIT) regulations to aggregate data on different measures, and estimate the impact of regulatory heterogeneity on trade using a gravity framework. Our results suggest that differences in standards reduce trade in beef and pig meat, but have little impact on trade in other agri-food products.

The paper introduces imperfect competition in a spatial equilibrium model of provincial dairy markets to analyze the welfare impacts of trade liberalization. Our model accounts for output restrictions at the farm level and the potential presence of market power at the processing level. Our model builds on the reciprocal dumping model of Brander and Krugman (1983) because processing firms from different provinces compete with one another in several provinces. Simulations reveal that welfare in the Canadian dairy sector could increase by as much as $1 billion per year if aggressive tariff cuts were made while moderate liberalization plans would yield annual gains of $234.5 million. Even large producing provinces like Quebec and Ontario gain from trade liberalization. In comparison, a perfect competition model yields more modest welfare gains in the range of $15.6 million and $34.5 million. Finally, we show that the switch in the sign of the transport cost-welfare relation identified by Brander and Krugman (1983) occurs at transport costs that are too high to be policy-relevant.

We propose an empirical trade model to test for structural change and dynamic effects induced by free trade agreements for the Canadian and US economies. We estimated a translog Gross National Product (GNP) function along with output and factor shares and tested for structural change (abrupt or gradual) which is endogenously determined by the data. After this, we estimated Stolper-Samuelson (SS) and Rybcynski (R) elasticities, and assessed the stability of their sign and magnitude link to the structural change. The null hypothesis of no structural change is soundly rejected for both countries. For Canada, we found gradual structural change that started prior to the implementation of CUSTA and lasted for several years. In the US case, we found evidence of an abrupt structural change occurring in 1995, a year after NAFTA came into force. More interestingly, several SS and R elasticities experienced sign reversals and a magnification effect over the different sub-periods, implying that the categorization of goods in terms of friends or enemies of labour and capital changed during the transition.

Tariff-rate quotas (TRQs) have replaced quotas at the end of the Uruguay Round. We analyze TRQs when a foreign firm competes against a domestic firm in the latter’s market. Our benchmark is the strategic rent-shifting tariff. We show that the domestic price-equivalent TRQ is a better instrument welfare-wise, as it can extract all of the rents from the foreign firm. We show that different pairs of within-quota tariff and quota can support full rent extraction. The implication is that reduction of the former and enlargement of the latter, holding the above-quota tariff constant, may have no liberalizing effects. The first-best TRQ and the strategic tariff generate different prices. When firms have identical and constant marginal cost, the first-best TRQ entails selling a subsidy to the foreign firm and forcing the exit of the domestic firm.

An input distance function (IDF) is estimated to empirically evaluate and analyze the technical and environmental efficiencies of 210 farms located in the Chaudière watershed (Quebec), where water quality problems are particularly acute because of the production of undesirable outputs that are jointly produced with agricultural products. The true IDF is approximated by a flexible translog functional form estimated using a full information maximum likelihood method. Technical and environmental efficiencies are disaggregated across farms and account for spatial variations. Our results show that there is a significant correlation between technical and environmental efficiencies. The IDF is used to compute the cumulative Malmquist productivity index and the Fisher index. The two indices are used to measure changes in technology, profitability, efficiency, and productivity in response to the adoption of 2 selected best management practices (BMPs) whose objective is to reduce water pollution. We found significant differences across BMPs regarding the direction and the magnitude of their effect on profitability, efficiency and productivity.

A gravity-based model is developed to explain bilateral trade flows in primary and processed agri-food commodities. It innovates by explicitly accounting for the vertical production linkages between primary and processed agri-food products, tariffs, and subsidies and by estimating the restrictiveness of non-tariff barriers in the upstream sector. Our application focuses on cattle/beef trade flows between forty-two countries. The structural parameters of the model are used to simulate trade flows under various scenarios of import tariffs and domestic and export subsidies reductions. The United States and Australia emerge as the exporting countries that stand to benefit the most from cuts in tariffs and subsidies as bovine meat imports in the European Union and Japan significantly increase. A bootstrap procedure is used to generate confidence intervals around predicted trade liberalization outcomes.

Evaluation - Auteur hors unité au moment de la publication; International audience; Production and marketing lags in agri-food supply chains often force agricultural producers and food processors to commit to output targets before prices and exchange rates are realized. A theoretical model illustrates how the processor's degree of risk aversion and domestic sales may cause the relationship between volatility of the exchange rate and exports to be non-monotonic. The relationship between exchange rate volatility and Quebec pork exports to the United States and Japan is investigated using linear and non-linear estimation methods. The results support the hypothesis that the relationship between exports and volatility is non-monotonic.; Le décalage entre les décisions de production et de commercialisation dans les filières agroalimentaires force souvent les producteurs et les entreprises de transformation à prendre leurs décisions sous incertitude. Un modèle théorique illustre comment le niveau d'aversion au risque du transformateur et les ventes locales influencent la relation entre la volatilité du taux de change et les exportations. La relation entre les exportations canadiennes de viande porcine vers les États-Unis et le Japon et la volatilité du taux de change est étudiée en utilisant des méthodes d'estimation linéaires et non linéaires. Les résultats supportent l'hypothèse que la relation est non monotone.

One of the most enduring problems in cross-section or panel data models is heterogeneity among individual observations. Different approaches have been proposed to deal with this issue, but threshold regression models offer intuitively appealing econometric methods to account for heterogeneity. We propose three different estimators that can accommodate multiple thresholds. The first two, allowing respectively for fixed and random effects, assume that the firms specific inefficiency scores are time-invariant while the third one allows for time-varying inefficiency scores. We rely on a likelihood ratio test with m − 1 regimes under the null against m regimes. Testing for threshold effects is problematic because of the presence of a nuisance parameter which is not identified under the null hypothesis. This is known as Davies problem. We apply procedures pioneered by Hansen (1999) to test for the presence of threshold effects and to obtain a confidence set for the threshold parameter. These procedures specifically account for Davies problem and are based on non-standard asymptotic theory. Finally, we perform an empirical application of the fixed effects model on a panel of Quebec dairy farms. The specifications involving a trend and the Cobb- Douglas and Translog functional forms support three thresholds or four regimes based on farm size. The efficiency scores vary between 0.95 and 1 in models with and without thresholds. Therefore, productivity differences across farm sizes are most likely due to technological heterogeneity.

This paper investigates price discriminating behaviour and currency invoicing decisions of Canadian pork exporters in the presence of menu costs. It is shown that when export prices are negotiated in the exporter’s currency, menu costs cause threshold effects in the sense that there are bounds within (outside of) which price adjustments are not (are) observed. Conversely, the pass-through is not interrupted by menu costs when export prices are denominated in the importer’s currency. The empirical model focuses on pork meat exports from two Canadian provinces to the U.S. and Japan. Hansen’s (2000) threshold estimation procedure is used to jointly test for currency invoicing and incomplete pass-through in the presence of menu costs. Inference is conducted using the bootstrap with pre-pivoting methods to deal with nuisance parameters. The existence of menu cost is supported by the data in three of the four cases. It also appears that Quebec pork exporters price discriminate and invoice in Japanese yen their exports to Japan. Manitoba exporters also seem to follow the same invoicing strategy, but their ability to increase their profit margin in response to large enough own-currency devaluations is questionable. Our currency invoicing results for sales to the U.S. are consistent with subsets of Canadian firms using either the Canadian or U.S. currency.

Agricultural trade liberalization negotiations are currently at a crossroads. Progress was made to eliminate export subsidies, but small open economies’ demand for lower domestic support and tariffs on agricultural goods do not find much support among large policy active countries. Many non-tariff barriers still also impede agricultural trade. This paper presents the theoretical foundations of a gravity model to explain trade flows of both primary agricultural commodities and processed foods. At the consumer level, commodities are differentiated according to their country of origin while primary agricultural goods are homogenous from the buyers’ perspective. However, primary goods can not be substituted costlessly across destinations from the sellers’ perspective due to differences in technical and sanitary regulations between countries. These assumptions yield well-behaved import demand functions at the consumer level and export supply functions at the producer level. Imperfect substitutability at the consumption and production levels is summarized in two important structural parameters. The role of these parameters in explaining bilateral trade patterns is illustrated for a three-country world market using a numerical example. The simulation investigates whether it is more important for a small open economy that large policy active countries reduce agricultural tariffs or domestic support. It also addresses the implications of tariff escalation on trade flows.

This series of six reports entitled: "On-Farm Food Safety and Environmental Farm Plans: Identifying and Classifying Benefits and Costs" was initiated soon after the launch of the Agricultural Policy Framework (APF) in 2002. The APF recognized the importance of food safety and environmental concerns for the future growth of the agriculture and Agri-food sector. For this reason, Agriculture and Agri-Food Canada (AAFC) commissioned this series of reports to develop a conceptual framework to strengthen our understanding of the potential benefit and cost implications of On-farm Food Safety (OFFS) and Environmental Farm Plans (EFP) that were key components of the APF. The reports were prepared by a group of academics with extensive knowledge of the agriculture and Agri-food sector and issues related to food safety, traceability and the environment. The first report presents a summary of the findings in the five main reports in the series. The second report presents the conceptual framework that was developed to help identify qualitatively the potential benefits and costs that the various players in the agriculture and agri-food supply chain would face in implementing OFFS and EFP programs. The third report applies this framework to pork, the fourth, to beef, the fifth, to grains and the sixth, to dairy. In general, benefits and costs are divided into both demand and supply side effects. In addition, both public and private costs and benefits are considered, especially since they help indicate where a role for government might be required and where markets are not working as well as they might. Based on these preliminary qualitative assessments, the beef and pork sector have more to gain from HACCP-based OFFS and EFP initiatives, due to their ability to gain market share from marketing their products internationally, while the grains sector already benefits internationally from its high quality reputation and the dairy sector is restricted to produce only for the domestic market. However, more work is required in these areas to validate and quantify costs and benefits.

This series of six reports entitled: "On-Farm Food Safety and Environmental Farm Plans: Identifying and Classifying Benefits and Costs" was initiated soon after the launch of the Agricultural Policy Framework (APF) in 2002. The APF recognized the importance of food safety and environmental concerns for the future growth of the agriculture and Agri-food sector. For this reason, Agriculture and Agri-Food Canada (AAFC) commissioned this series of reports to develop a conceptual framework to strengthen our understanding of the potential benefit and cost implications of On-farm Food Safety (OFFS) and Environmental Farm Plans (EFP) that were key components of the APF. The reports were prepared by a group of academics with extensive knowledge of the agriculture and Agri-food sector and issues related to food safety, traceability and the environment. The first report presents a summary of the findings in the five main reports in the series. The second report presents the conceptual framework that was developed to help identify qualitatively the potential benefits and costs that the various players in the agriculture and agri-food supply chain would face in implementing OFFS and EFP programs. The third report applies this framework to pork, the fourth, to beef, the fifth, to grains and the sixth, to dairy. In general, benefits and costs are divided into both demand and supply side effects. In addition, both public and private costs and benefits are considered, especially since they help indicate where a role for government might be required and where markets are not working as well as they might. Based on these preliminary qualitative assessments, the beef and pork sector have more to gain from HACCP-based OFFS and EFP initiatives, due to their ability to gain market share from marketing their products internationally, while the grains sector already benefits internationally from its high quality reputation and the dairy sector is restricted to produce only for the domestic market. However, more work is required in these areas to validate and quantify costs and benefits.

This series of six reports entitled: "On-Farm Food Safety and Environmental Farm Plans: Identifying and Classifying Benefits and Costs" was initiated soon after the launch of the Agricultural Policy Framework (APF) in 2002. The APF recognized the importance of food safety and environmental concerns for the future growth of the agriculture and Agri-food sector. For this reason, Agriculture and Agri-Food Canada (AAFC) commissioned this series of reports to develop a conceptual framework to strengthen our understanding of the potential benefit and cost implications of On-farm Food Safety (OFFS) and Environmental Farm Plans (EFP) that were key components of the APF. The reports were prepared by a group of academics with extensive knowledge of the agriculture and Agri-food sector and issues related to food safety, traceability and the environment. The first report presents a summary of the findings in the five main reports in the series. The second report presents the conceptual framework that was developed to help identify qualitatively the potential benefits and costs that the various players in the agriculture and agri-food supply chain would face in implementing OFFS and EFP programs. The third report applies this framework to pork, the fourth, to beef, the fifth, to grains and the sixth, to dairy. In general, benefits and costs are divided into both demand and supply side effects. In addition, both public and private costs and benefits are considered, especially since they help indicate where a role for government might be required and where markets are not working as well as they might. Based on these preliminary qualitative assessments, the beef and pork sector have more to gain from HACCP-based OFFS and EFP initiatives, due to their ability to gain market share from marketing their products internationally, while the grains sector already benefits internationally from its high quality reputation and the dairy sector is restricted to produce only for the domestic market. However, more work is required in these areas to validate and quantify costs and benefits.

This series of six reports entitled: "On-Farm Food Safety and Environmental Farm Plans: Identifying and Classifying Benefits and Costs" was initiated soon after the launch of the Agricultural Policy Framework (APF) in 2002. The APF recognized the importance of food safety and environmental concerns for the future growth of the agriculture and Agri-food sector. For this reason, Agriculture and Agri-Food Canada (AAFC) commissioned this series of reports to develop a conceptual framework to strengthen our understanding of the potential benefit and cost implications of On-farm Food Safety (OFFS) and Environmental Farm Plans (EFP) that were key components of the APF. The reports were prepared by a group of academics with extensive knowledge of the agriculture and Agri-food sector and issues related to food safety, traceability and the environment. The first report presents a summary of the findings in the five main reports in the series. The second report presents the conceptual framework that was developed to help identify qualitatively the potential benefits and costs that the various players in the agriculture and agri-food supply chain would face in implementing OFFS and EFP programs. The third report applies this framework to pork, the fourth, to beef, the fifth, to grains and the sixth, to dairy. In general, benefits and costs are divided into both demand and supply side effects. In addition, both public and private costs and benefits are considered, especially since they help indicate where a role for government might be required and where markets are not working as well as they might. Based on these preliminary qualitative assessments, the beef and pork sector have more to gain from HACCP-based OFFS and EFP initiatives, due to their ability to gain market share from marketing their products internationally, while the grains sector already benefits internationally from its high quality reputation and the dairy sector is restricted to produce only for the domestic market. However, more work is required in these areas to validate and quantify costs and benefits.

This series of six reports entitled: "On-Farm Food Safety and Environmental Farm Plans: Identifying and Classifying Benefits and Costs" was initiated soon after the launch of the Agricultural Policy Framework (APF) in 2002. The APF recognized the importance of food safety and environmental concerns for the future growth of the agriculture and Agri-food sector. For this reason, Agriculture and Agri-Food Canada (AAFC) commissioned this series of reports to develop a conceptual framework to strengthen our understanding of the potential benefit and cost implications of On-farm Food Safety (OFFS) and Environmental Farm Plans (EFP) that were key components of the APF. The reports were prepared by a group of academics with extensive knowledge of the agriculture and Agri-food sector and issues related to food safety, traceability and the environment. The first report presents a summary of the findings in the five main reports in the series. The second report presents the conceptual framework that was developed to help identify qualitatively the potential benefits and costs that the various players in the agriculture and agri-food supply chain would face in implementing OFFS and EFP programs. The third report applies this framework to pork, the fourth, to beef, the fifth, to grains and the sixth, to dairy. In general, benefits and costs are divided into both demand and supply side effects. In addition, both public and private costs and benefits are considered, especially since they help indicate where a role for government might be required and where markets are not working as well as they might. Based on these preliminary qualitative assessments, the beef and pork sector have more to gain from HACCP-based OFFS and EFP initiatives, due to their ability to gain market share from marketing their products internationally, while the grains sector already benefits internationally from its high quality reputation and the dairy sector is restricted to produce only for the domestic market. However, more work is required in these areas to validate and quantify costs and benefits.

This series of six reports entitled: "On-Farm Food Safety and Environmental Farm Plans: Identifying and Classifying Benefits and Costs" was initiated soon after the launch of the Agricultural Policy Framework (APF) in 2002. The APF recognized the importance of food safety and environmental concerns for the future growth of the agriculture and Agri-food sector. For this reason, Agriculture and Agri-Food Canada (AAFC) commissioned this series of reports to develop a conceptual framework to strengthen our understanding of the potential benefit and cost implications of On-farm Food Safety (OFFS) and Environmental Farm Plans (EFP) that were key components of the APF. The reports were prepared by a group of academics with extensive knowledge of the agriculture and Agri-food sector and issues related to food safety, traceability and the environment. The first report presents a summary of the findings in the five main reports in the series. The second report presents the conceptual framework that was developed to help identify qualitatively the potential benefits and costs that the various players in the agriculture and agri-food supply chain would face in implementing OFFS and EFP programs. The third report applies this framework to pork, the fourth, to beef, the fifth, to grains and the sixth, to dairy. In general, benefits and costs are divided into both demand and supply side effects. In addition, both public and private costs and benefits are considered, especially since they help indicate where a role for government might be required and where markets are not working as well as they might. Based on these preliminary qualitative assessments, the beef and pork sector have more to gain from HACCP-based OFFS and EFP initiatives, due to their ability to gain market share from marketing their products internationally, while the grains sector already benefits internationally from its high quality reputation and the dairy sector is restricted to produce only for the domestic market. However, more work is required in these areas to validate and quantify costs and benefits.

This paper investigates PTM behaviour and currency invoicing decisions of Canadian pork exporters in the presence of menu costs. It is shown that when export prices are negotiated in the exporter's currency, menu costs cause threshold effects in the sense that there are bounds within (outside of) which PTM is not (is) observed. Conversely, PTM is not interrupted by menu costs when export prices are denominated in the importer's currency. The empirical model focuses on pork meat exports from Canada to the U.S. and Japan. Hansen's (2000) threshold estimation procedure is used to jointly test for currency invoicing and PTM in the presence of menu costs. Inference is conducted using bootstrap methods. PTM effects are smaller when accounting for currency invoicing decisions and menu costs than under standard linear models. The data does not reject the null hypothesis that Quebec pork exporters exercise PTM behaviour in the Japanese market and invoice their sales in Japanese currency. Evidence of PTM behaviour and foreign currency invoicing is weak for the U.S. market. Ontario pork exporters do not exercise PTM behaviour in any market.

International audience