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The performance of pulp and paper industries in four Canadian regions is compared based on the estimation of an input distance function both with and without pollutant outputs. The environmentally sensitive approach provides higher productivity growth estimates for all regions, indicating the need for adjusting conventional measures that ignore the non-marketed benefits of pollution abatement activities. The results also consistently indicate the presence of substantial differences in the regional levels of technical efficiency.

This study focuses on the demand for meat and the market vulnerabilities that apply to four selected Asian markets that are of potential importance to meat exporters. The markets identified for this purpose are Japan, South Korea, Indonesia, and Singapore. An initial overview of market prospects and vulnerabilities based on previous studies is reported. Detailed assessments of import demand and substitution between various meats for meat exports from Canada/Alberta to each of these markets was also undertaken. This required collection and analysis of extensive data relating to consumption and imports of major meat groups in the four Asian countries. Two different econometric models were applied. These included source-differentiated Almost Ideal Import Demand Systems and Multiple Competitive Interaction models. Detailed estimates are reported of the substitution tendencies, in the form of cross-elasticities between various meats (beef, pork, poultry and other) and between different sources of the various meats. Meat sources include Canada, the United States, European Union, Oceania, Developing Asia and others. Developing Asia exports reflect that Thailand, Taiwan and China are all major meat exporters to other countries in Asia; Latin America is also a significant exporter of beef to some countries in this region. Market share elasticities are negative and significant with respect to own prices in almost all cases in each of the four importing countries. Furthermore, the own price elasticities are elastic in the majority of cases except in the meat import market of South Korea. It can be concluded that the meat market in East Asia is very price responsive and that price is the most important determinant of meat market share in these countries. Cross-price elasticities may be grouped into two classes: cross price elasticities between same products from different sources (e.g., between U.S. beef and beef from Oceania in the Japanese beef import market) and cross price elasticities between goods (e.g., between U.S. beef and poultry from any source in the Japanese meat import market). Findings about cross product-price elasticities are not as conclusive as the own price elasticities. The cross-elasticities are positive only in 61 percent of the cases. In Indonesia, Japan, and Singapore, substitution relationships are more prevalent in pork import markets than in any other meat market, while in South Korea, such relationships are more prevalent in the beef import market than in any other meat market. This implies that competition is stiffer in the pork and beef markets of these countries. A combination of high expenditure elasticity for imports and inelastic own price elasticity for imports from a given exporter imply strong export potential for that export source in a given import market. The U.S. appears to enjoy such a position in Indonesia, Japan, and South Korea for most of the meats for which it is a major exporter. Canada faces elastic own price and expenditure elasticities in its pork exports to both Japan and South Korea, but inelastic own price and expenditure elasticities in the beef market of South Korea. Although East Asian meat import markets are dominated by the closely located exporters of Australia, New Zealand and some Asian countries, significant swings are observed in the market shares of these sources from time to time, particularly in Indonesia and South Korea. Thus there are real opportunities for more distant exporters, like Canada, to take advantage of these. This will require strategic planning, to build the information capacity to service these markets through knowledge of their preferences, organizations and trade practices. It will also require appropriate positioning, through aggressive, appropriately directed, effective promotion and development activities. Investment in market information is necessary to improve both capacity and positioning activities. Even so, price and quality are important features for the potential of export to these markets to be achieved. Investment in food safety provisions, and development of an associated "safe food" image is likely to be an important feature of reputation in this context.

This study proposes non-parametric techniques for environmentally sensitive analysis of economic performance. The techniques are implemented using Canadian pulp and paper industry data covering the period from 1959 to 1994. The results indicate that productivity improvement has been more successful than conventional measures would suggest.

This study evaluates the impacts of the Uruguay Round Agreement (URA) on Canadian agriculture in a single-country general equilibrium framework. For this purpose a computable general equilibrium model of the Canadian economy that involves six agricultural and two non-agricultural sectors was constructed and calibrated on 1991 data. To assess whether Canadian agriculture benefits from the URA, two sets of anticipated changes in world prices, taken from studies of the global effects of the URA, were introduced into the model exogenously. The simulation experiments show that the minimum increases in world prices from global studies are too small to offset the negative effects on agriculture of the reductions in tariffs, export subsidies and domestic support. However, if world prices were to change by the maximum level of global projections, Canadian agricultural producers gain from the URA. The sectors that benefit the most are wheat, other grains, and processed foods, for which production and exports increase appreciably. Imports of milk and poultry products increase substantially and livestock sector imports also increase. Labour and capital demand increase in agriculture, particularly in the wheat and other grains sectors. The highest increase in factor returns in agriculture is for agricultural land. Since the export prices applied above are exogenously determined, a third experiment is conducted to determine the extent of the world price changes for agricultural exports that would offset the negative effects on sectoral domestic production of the URA policy commitments. This would require world prices that are about eleven per cent higher than in the base period for wheat and about ten per cent higher for other grains. The greatest increase in prices--by nearly thirteen per cent--would be required for the milk and poultry sector. More modest changes in world prices for the other agricultural sectors are needed to offset the impacts of the reductions in sectoral support necessitated by the URA. Most of these price changes lie within the ranges of world price projections from studies of the global effects of the URA.

The effective management of water resources in Alberta is crucial to sustainable agriculture, industrial development, and environmental management. The historical water allocation mechanism, administrative apportionment, has been viewed in recent years as ineffective and cumbersome. Accordingly, the revision of the Water Act in 1996, included an attempt to improve the efficiency of water allocation. By making the transfer of water rights possible, the revised Act provides many new options for water use and flexibility. The implications of transferable water rights in Alberta water policy must be carefully considered in order to determine the viability and suitability of such a system in the provincial context. This project examines some of the economic aspects of transferable water rights and the potential for effective water allocation by way of transfers in an Alberta setting. As a major part of this project, a hedonic price model, focusing on land values in southern Alberta, was constructed based on similar models, which have been used elsewhere to value water rights or agricultural products. The hedonic approach to market analysis uses the relationship between the price of land and the attributes of the land, such as water availability, soil quality and location, to explain differences in land prices. In this process, the hedonic model is used to estimate the implicit marginal price or value of each land attribute -- in our case, the marginal value of irrigation water. This value will provide us with an indirect estimate of the value of water rights in the region studied. An advantage of the technique is that it estimates the value that farmers express for irrigation water in the market place for land. Such values, then, give us an indication of the anticipated prices, which might prevail for water rights in southern Alberta. The focus of the study was an area of southern Alberta encompassing the counties of Wheatland, Newell, Cypress, Forty Mile, Taber, Warner, Lethbridge and Vulcan and the irrigation districts of Western, Eastern, St.Mary's, Taber, Lethbridge Northern, and portions of Raymond. Information was collected on the physical and economic characteristics of 230 land parcels, which were sold in this region in 1993 and early 1994. A crude comparison of the value of irrigated agricultural land and non-irrigated agricultural land in the sample reveals that irrigated land was worth, on average, $325 more per acre than non-irrigated land. In the ensuing analysis, it was estimated that the value of a parcel of land was determined largely by the buildings on it, the number of acres in the parcel, the proximity of the parcel to a major city (in this case Calgary or Lethbridge), and by the availability of irrigation water. In the hedonic model, the coefficient values of the variables included represent the marginal impact of each of these characteristics on land prices holding all other things constant. For example, the value of water rights represents the average difference between land values of farms that have access to irrigation and farms that do not. This study estimated that every dollar of improvements to farm buildings translates to a one cent increase in the per acre price of the land parcel, where the addition of one extra acre of land to a land parcel lowers the price per acre by $5.17 per acre. Land prices were seen to increase with the proximity of the parcel to large cities. Similarly, the results of the preferred model indicate that the implicit value of having access to irrigation water in southern Alberta is approximately $190 per acre, or, using the conventional estimate that irrigating one acre of land requires 1.5 acre feet of water, this translates to $126 per acre foot of irrigation water. Accordingly, it is revealed that the existence of water rights adds approximately 35% to the value of non-irrigated land. Since this value represents the implicit amount farmers are willing to pay for access to water, it could also be construed as an indirect measure of the value of water rights. From these results, it is reasonable to conclude that water rights do have a measurable impact on land values. Accordingly, proper incentives may be needed to ensure that water is used efficiently and not incorrectly treated as a relatively free or cheap good. One possible method of policy reform to achieve such a system would be the institution of a system of transferable water rights, permitting water to be traded, or effectively sold, at its market price or scarcity value. Further work was done to determine the potential effects of transferable water rights on the Eastern Irrigation District in southern Alberta. Farm budget information was used to gather information and create twelve representative farm types whose financial performance was analysed using linear programming with increasing water quantity constraints. The resulting productive water values were then used to imply potential reallocations of water among farm types and cropping systems. Analysis of the data gathered revealed that all representative farms faced downward sloping demand functions for water. The overall value of water for a 1% reduction ranged from $8 to $250 per acre foot, with the lowest value belonging to largely pasture operations and the highest value attributed to specialty crop producers. This large range in water values for the region indicates that there is sufficient heterogeneity within the EID to accommodate a transferable rights system. Further analysis of the data reveals that the implementation of a transfer system would result in water being transferred to specialty crop producers and the acreage devoted to specialty crops would increase. Small irrigated pasture operations and cereal crop producers would be the first to give up their water allocations under a transfer system. The analysis indicates that there is considerable potential for economic gains from water trade within this district, the main constraint being the market limitations to expanded specialty crop production. Using these two major studies and other sources, this report concludes with a brief evaluation of the economic advantages, disadvantages and other issues involved in instituting a system of transferable water rights in Alberta. Experience elsewhere, primarily in Australia and the western United States, strongly suggests that transferable water rights, despite some drawbacks and problems of implementation, can be a very worthwhile water policy tool. Now that such tradable water rights are permissible under the revised Water Resources Act of 1996, it is recommended that a pilot project involving transferable water rights be instituted in a water short basin or sub-basin in southern Alberta once a water management plan for that basin is completed.

This project addresses several issues related to efficiency, productivity, and competitiveness in Alberta's agriculture and food sector, in both its primary agricultural sector and its secondary processing industry related to food and beverages. A major underlying theme of this work is that the competitiveness and economic sustainability of Alberta's agriculture and food sector is considerably driven by long run trends in productivity. Two emerging trends in Alberta's agriculture and food sector are initially documented: the increasing role of specialty crop production and the rising importance of value added production. Productivity trends and competitiveness issues are examined for Alberta's primary agricultural production sector. Index numbers for agricultural output, aggregate input, and (total factor) productivity were constructed, using Tornqvist-Theil indexing procedures, for both Alberta and the Prairies for the period 1948 to 1994. Alberta's annual output growth rate of 2.43 percent and its productivity growth rate in agriculture of 1.9 percent over this time period closely mirror output and productivity performance for the entire Prairies. Since 1978, however, both output growth and productivity performance in Alberta has been somewhat slower than in the prairie region as a whole. The foregoing aggregate productivity trends in primary agriculture mask considerably different trends for the crops sector in Alberta versus the livestock sector. Both crop output growth and crop productivity growth have been consistently stronger than output and productivity growth in the livestock sector. Productivity, for example, has grown annually at 2.75 percent in the crop sector but only at 0.81 percent per year in the livestock industry in Alberta. Alberta's lagging agricultural productivity performance since 1980, albeit with some modest recovery in the 1990s, is largely attributable to negative productivity growth in the livestock sector. Historical productivity performance in the crops and livestock sectors in Alberta roughly parallels experience in nearby American states. A simple econometric model was constructed to explore the relationship between total factor productivity (TFP) in primary agriculture and proxies for expenditures on research and development (R&D). Lagged R&D expenditures are found to be a statistically significant influence on productivity, lending empirical credence to the widely held belief that expenditures on R&D are vital to productivity growth in agriculture. The Alberta food and beverage industry is one of the largest manufacturing industries in the province, and it has been greatly influenced by the implementation of recent trade agreements, as well as rapidly changing global business environments, changing consumer preferences, and rising living standards. Therefore, the performance of the industry is critical to Alberta's economy. In the thirty-two year period of 1961-1993, the Alberta food and beverage industry has experienced fundamental structural changes toward greater scale economies featured by higher levels of concentration and larger facilities. The number of plants has been reduced by 40%. On the other hand, the industry's total value added rose 2.6 times. As a result, the average value added per establishment has been growing at an annual compound rate of 4.67%, so that the 1993 level is 4 times the level in 1961. Despite this gain, the average scale of production is larger at the national level, and the difference between the two tends to be wider in the last ten years of the study. The competitiveness assessment of the food and beverage industry shows the overall Canadian sector performed better in terms of profitability and market share. Total factor productivity, measured by the index number approach, has been used to assess the performance of the food and beverage industry in both Alberta and Canada in this report. Although both output and inputs grow faster in Alberta than in Canada, Alberta's TFP growth in the processing sector has been sluggish, if not negative. In the period of 1961-1974, TFP climbed marginally at annual rates of 0.33% for Alberta and 0.35% for Canada. But in the period of 1974-1993, with annual decreasing rates of 1.52% and 1.15% respectively, the food and beverage industries in both Alberta and Canada suffered from a loss of productivity, with the Canadian sector in a relatively better position. Factors which affect the growth of TFP include: lagging research and development, excessive cost of inputs, and sluggish market demand. In comparison to the food processing industry overall, Alberta's slaughtering and meat processing industry shows much more promising performance. Overall it is in the strongest position among all Alberta food and beverage industries, and it is also more competitive than its Canadian counterpart. The red meat industry in Alberta, especially the beef packing subsector, has benefited from structural change in the industry, the exploitation of economies of scale, and increases in labour productivity. Finally, it is important to note the beneficial impacts that productivity improvement in primary agriculture has on the processing sector, and vice versa. Gains in productivity in primary production may be transferred to the processing sector in the form of cheaper inputs. Conversely, efficiency gains in the processing sector result in an increased derived demand for the products of primary agriculture. Policies which encourage productivity growth in either sector can increase the competitiveness of both sectors. Further, policies which stimulate increased expenditure on research and development lie at the heart of productivity enhancement in both primary agriculture and the food processing sector.

The major determinants of cereal import demand in 7 4 less-developed countries (LDCs) were analysed using an econometric cross-sectional model. Key explanatory factors included the level of income and degree of urbanization, financial capacity proxies, and domestic grain supply variables. A major innovation involved the analysis of the impact of income distribution on LDC cereal import demand in 1986 and 1987 for a more restricted sample of 23 nations. These~ developing countries exhibit a greater than proportional increase in cereal imports due to an increase in the income share of the poorest 40 percent of their populations. The inclusion of regional slope and intercept dummies in the cereal import demand model also provides improved results. High levels of government debt appear to have inhibited cereal imports in nations in South America but not in Asia and Africa. In all three continental regions, particularly Africa, there is a positive relationship between food aid and cereal imports. The model predicts cereal imports more satisfactorily for nations in Asia and South America than for those in Africa. Finally, the results support the view that improvements in income distribution in developing nations would considerably stimulate cereal imports.

This study focuses on the question of whether variations in total consumption of meat and the mix of different types of meats consumed in Canada over the past twenty-five years have been primarily due to changes in the levels of prices and consumers' income or whether structural changes in red meat demand, due to change in consumers' tastes, have occured. Since recent economic literature indicates that findings of structural change in demand may be senstive to functional form or other features of model specification, several model specifications were tested. In the initial phase of the study, issues of demand specification were analysed using two single-equation functional forms of the various meat demand models fitted to annual time-series data for beef, pork, poultry, and fish from 1960 through 1987. The models are the widely used but theoretically inconsistent double logarithmic model and the single-equation version of the almost ideal demand model. Various tests of the appropriate measure of the explanatory income variable support the use of expenditure on meat, rather than per capita disposable income, as the income variable. Exogeneity tests of the appropriateness of single equation demand specification are not conclusive but tend to support the use of non-simultaneous quantity- or price-dependent models. The analysis of structural change in the single equation models indicates a structural shift in the Canadian demand for meat during the mid-1970s. In the second and major phase of the study, two multiple-equation demand systems, the almost ideal demand system and the translogarithmic demand system, were fitted the quarterly data for beef, pork, chicken, and turkey from 1967 through 1987. One contribution of this study to applied demand analysis is to confirm the importance of habit persistence in analyzing demand. Inconclusion of lagged meat consumption variables materially improve the fit, performance, and consistency with theory-based restirctions of both demand systems. Results from the system analyses of demand also indicated a change in the structure of the demand functions for meat dating from the mid 1970s. Use of a variety of tests of structural change indicated a shift in the intercept terms, rather than in the slopes of the demand functions, implying a change in consumer preferences or tastes away from beef and toward chicken after accounting for the influence of changes in prices and income. A minor or nonsignificant structural change is evident for pork. The cause of the change in preferences is not clear. Perceptions of healthy diets, changes in the availability of and preferences for fast food items, and changes in the demographic structure of the population as the population has aged are possible explanations. The study provides updates estimates of the responsiveness of Canadian consumption of the various meats to changes in prices and consumers' expenditure or income. The estimates based on the system analyses are preffered, since theya re more strongly grounded in economic theory. As expected, all estimates of price elasticity of demand are less than unity. Both system model approaches indicate that chicken and pork consumption are slightly more responsive to changes in price than is beef consumption. Turkey consumption varies much less than other meats in response to price changes. As expected, the demand estimates based on quarterly data are slightly more responsive to price changes than the estiamates based on annual data. Overall, habit persistence is important in red meat consumption and consumption changes have occured in response to changes in prices and incomes. Nontheless, after accounting for these influences, there is evidence of a structural change in demand away from beef and towards chicken. This has accounted for a decrease of 6% in the expenditure share of beef and an increase of 33% in the budget share of chicken. In relative terms, about 20% of the increase per capita chicken consumption and about 25% of the decrease in per capita beef consumption seems to have been associated with the changes in consumer preferences. The results from this study suggest potential market strategies for livestock producers are to emphasize production of lean meat, encourage fast food products, and encourage cost competitiveness throughout the industry

The subject of this study is the economic characteristics of Canada's export markets for foodgrains and feedgrains. The focus is on economic analysis of barley export markets. Over time Canada has become the largest barley exporter, replacing France as the leading source of barley. On the import side, developing countries have become the fastest growing market segment for barley imports, replacing developed countries as the leading market outlet. Canada's export profile data reveal that developing and Eastern European countries became expansionary markets in the 1980s while developed countries have imported a decreasing share of Canada's barley exports. Constant market share analyses of the world barley and course grain markets reveal that those exporters with the highest export concentration in the rapidly expanding markets in richer developing countries registered positive export growth impacts due to this concentration. While corn is still the dominant feedgrain traded on world markets, barley became, by 1985, the fastest growing feedgrain export, resulting in positive export growth for exporters, like Canada, for which barley is a prominent feedgrain. Despite appreciable reliance on less rapidly growing import markets for barley, Canada has ben relatively competitive in world barley markets, at least up to the mid 1980s. In wheat, Canada's exports have tended to be mroe concentrated on less rapidly growing market segmetns and on less rapidly growing classes of wheat. Canada's competitve position in world wheat markets has varied over time and, toward the end of the 1980s, was worsened by the United States export enhancement program subsidies. The major determinants of cereal import demand in seventy-four developed countries (LDCs) were analyzed through the use of an econometric cross-sectional model. Key explanators of import demand in these increasingly important markets included the level of income and degree of urbanization, financial capacity proxies, and domestic grain supply variables. A contribution to the study of cereal markets involved the analysis of the impact of income distribution on less developed countries' cereal import demand in1986 and 1987 for a more restricted sample of twenty-three nations. These developing countries exhibit a greater than proportional increase in cereal imports due to an increase in the income share of the poorest 40 percent of their populations. The inclusion of regional slope and intercept dummies in the cereal import demand model was an innovation that provided improved results. High levels of government debt appear to have inhibited cereal importation in nations in South America, but not in Asia and Africa. In all three continental regions, particularly in Africa, there is a positive relationship between food aid and cereal imports. The model predicts cereal imports for nations in Asia and South America more satisfactorily than for those in Africa. The results support the view that improvements in income distribution in developing nations would considerably stimulate cereal imports. In models where cereal imports were disaggregated into feedgrains and foodgrains, the estimated income elasticity of import demand for feedgrains is higher than that for foodgrains. In other words, feedgrain import demand is more sensitive to either upward or downward changes in income than is foodgrain import demand. This is one factor which helps to explain why feedgrain exports grew more rapidly in the 1970s and collapsed to a greater degree than wheat exports in the 1980s. World import demand for wheat appears to be relatively more "recession proof" than is the case for world barley imports. However, World barley markets show potential for greater future growth subject to improvements in the income levels of importing regions. Detailed time series studies of barley import demand in four Canadian export markets--the (former) USSR, Japan, Colombia and China—were undertaken. The results revealed that Russia's characteristic pattern of import fluctuations is caused mainly by domestic barley and livestock production fluctuations. The price of barley imports also affects USSR barley import decisions, implying financial constraints are an important aspect of the Soviet market. In the Japanese market, barley import demand underwent a structural shift around 1972 when usage of barley changed from a foodgrain to feedgrain. Canadian barley changed from an inferior foodgrain to a normal feedgrain, as reflected in the income elasticity of demand. The Canadian dollar-Japanese yen exchange rate is an important determinant of Japan's barley import demand. Colombia's import demand for barley has been influenced by barley import price and foreign exchange reserves. As a developing country, Columbia faces financial constraints that influence import decisions. For China, another developing country, barley imports are affected by the price of barley imports and by the price of wheat imports which is, for China, a substitute for barley imports. Domestic barley and hog production also influence this nation's barley imports. Overall, our empirical analysis supports the contention that the fortunes of the developed and the developing nations are closely intertwined in the world food economy. The pace at which poor nations can develop, both through increasing income levels and improving income distribution, significantly influences their cereal imports and, concomitantly, cereal exports from rich nations such as Canada. A successful conclusion to the negotiations within the General Agreement on Tariffs and Trade and efforts to improve the economic situation of developing countries will benefit the Canadian grain producing and exporting sector.

The major determinants of cereal import demand in seventy-four less developed countries (LDCs) were analyzed through the use of an econometric cross-sectional model. Key explanators included the level of income and degree of urbanization, financial capacity proxies, and domestic grain supply variables. A major innovation involved the analysis of the impact of income distribution on LDC cereal import demand in 1986 and 1987 for a more restricted sample of twenty-three nations. These developing countries exhibit a greater than proportional increase in cereal imports due to an increase in the income share of the poorest 40 percent of their populations. The inclusion of regional slipe and intercept drummies in the cereal import demand model also provided improved results. High levels of government debt appear to have inhibited cereal importation in nations in South America, but not in Asia and Africa. In all three continental regions, particularly in Africa, there is a positive relationship between food aid and cereal imports. The model predicts cereal imports for nations in Asia and South America more satisfactorily than those in Africa. Finally, the resuults support the view that improvements in income distribution in developing nations would considerably stimulate cereal imports.