Staff View: Competitiveness with sustainable agriculture: win, lose or draw?

Competitiveness with sustainable agriculture: win, lose or draw?

Through the Polluter-Pays-Principle (PPP), it is generally assumed that the additional cost of internalization is passed on to consumers. However, stiff competition in the world market could make it difficult for exporters to pass on to international consumers, thus profit margin on export commoditi...

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Main Authors:	Abdul Rahim, Khalid, Wong, Swee Kiong, Liwan, Audrey
Format:	Article
Language:	English
Published:	Faculty of Economics and Management, Universiti Putra Malaysia 2009
Online Access:	http://psasir.upm.edu.my/id/eprint/39448/1/39448.pdf http://psasir.upm.edu.my/id/eprint/39448/ http://econ.upm.edu.my/ijem/vol3_no1.htm
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id	my.upm.eprints.39448
record_format	eprints
spelling	my.upm.eprints.394482015-08-03T04:36:35Z http://psasir.upm.edu.my/id/eprint/39448/ Competitiveness with sustainable agriculture: win, lose or draw? Abdul Rahim, Khalid Wong, Swee Kiong Liwan, Audrey Through the Polluter-Pays-Principle (PPP), it is generally assumed that the additional cost of internalization is passed on to consumers. However, stiff competition in the world market could make it difficult for exporters to pass on to international consumers, thus profit margin on export commodities is eroded and exports may be curtailed. This situation prevails in many developing countries which export a large proportion of their commodity production. When pollution control costs are substantial, voluntary implementation of environmental policy in the commodity export sector of a country may be problematic. Studies have shown mixed results that generalizations on the competitive effects of eco-friendly agriculture are unwise. Results of our study reveal that stricter environmental regulation to increase the cost of chemical inputs to encourage farmers to produce eco-friendly pepper products would enhance the export market competitiveness of both black pepper and white pepper production in Malaysia. On the other hand, to produce cocoa in a manner consistent with eco-friendly objectives requires huge sum of investment by the government. Each producer has different cost structure such that internalization of production externalities may result in higher cost of production for some countries but reduced cost for others. Cocoa growers in Brazil estimated an increased cost of 13.33% over variable costs at average productivity to compensate for adequate soil management, disease prevention and maintenance of production infrastructure. In Malaysia, one-third of the cost of production is accounted for the labour in combating the cocoa pod borers in estates in Sabah thus increasing the overall cost of production by 14%. However, evidence shows a reduction in the cost of production by 77% in Indonesia due to low wages in agriculture. Faculty of Economics and Management, Universiti Putra Malaysia 2009-06 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/39448/1/39448.pdf Abdul Rahim, Khalid and Wong, Swee Kiong and Liwan, Audrey (2009) Competitiveness with sustainable agriculture: win, lose or draw? International Journal of Economics and Management, 3 (1). pp. 87-99. ISSN 1823-836X http://econ.upm.edu.my/ijem/vol3_no1.htm
institution	Universiti Putra Malaysia
building	UPM Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Putra Malaysia
content_source	UPM Institutional Repository
url_provider	http://psasir.upm.edu.my/
language	English
description	Through the Polluter-Pays-Principle (PPP), it is generally assumed that the additional cost of internalization is passed on to consumers. However, stiff competition in the world market could make it difficult for exporters to pass on to international consumers, thus profit margin on export commodities is eroded and exports may be curtailed. This situation prevails in many developing countries which export a large proportion of their commodity production. When pollution control costs are substantial, voluntary implementation of environmental policy in the commodity export sector of a country may be problematic. Studies have shown mixed results that generalizations on the competitive effects of eco-friendly agriculture are unwise. Results of our study reveal that stricter environmental regulation to increase the cost of chemical inputs to encourage farmers to produce eco-friendly pepper products would enhance the export market competitiveness of both black pepper and white pepper production in Malaysia. On the other hand, to produce cocoa in a manner consistent with eco-friendly objectives requires huge sum of investment by the government. Each producer has different cost structure such that internalization of production externalities may result in higher cost of production for some countries but reduced cost for others. Cocoa growers in Brazil estimated an increased cost of 13.33% over variable costs at average productivity to compensate for adequate soil management, disease prevention and maintenance of production infrastructure. In Malaysia, one-third of the cost of production is accounted for the labour in combating the cocoa pod borers in estates in Sabah thus increasing the overall cost of production by 14%. However, evidence shows a reduction in the cost of production by 77% in Indonesia due to low wages in agriculture.
format	Article
author	Abdul Rahim, Khalid Wong, Swee Kiong Liwan, Audrey
spellingShingle	Abdul Rahim, Khalid Wong, Swee Kiong Liwan, Audrey Competitiveness with sustainable agriculture: win, lose or draw?
author_facet	Abdul Rahim, Khalid Wong, Swee Kiong Liwan, Audrey
author_sort	Abdul Rahim, Khalid
title	Competitiveness with sustainable agriculture: win, lose or draw?
title_short	Competitiveness with sustainable agriculture: win, lose or draw?
title_full	Competitiveness with sustainable agriculture: win, lose or draw?
title_fullStr	Competitiveness with sustainable agriculture: win, lose or draw?
title_full_unstemmed	Competitiveness with sustainable agriculture: win, lose or draw?
title_sort	competitiveness with sustainable agriculture: win, lose or draw?
publisher	Faculty of Economics and Management, Universiti Putra Malaysia
publishDate	2009
url	http://psasir.upm.edu.my/id/eprint/39448/1/39448.pdf http://psasir.upm.edu.my/id/eprint/39448/ http://econ.upm.edu.my/ijem/vol3_no1.htm
_version_	1643832424470151168
score	13.211869

Competitiveness with sustainable agriculture: win, lose or draw?

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