W. Hartley Furtan’s research while affiliated with University of Saskatchewan and other places

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Publications (30)


Reverse franchising: Reversng the road to mega farms
  • Article
  • Full-text available

January 2013

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3,349 Reads

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W.H. Furtan

Reverse franchising is the business format where a number of small firms (or farms) through collective action create an entity (a firm, a cooperative, a marketing order, a joint venture, a strategic alliance, etc) which undertakes certain activities on behalf of the members' franchisees. We use two illustrative examples of reverse franchising in the farm sector, the Danish agricultural system and the Canadian Wheat Board. Through these reverse franchise structures farmers have been able to enjoy economies of size and market power, and thus maintain the family farm. The creation of superstructures by farmers has helped them maintain a smaller scale at the primary level. These two examples illustrate that in order for the family farm to survive and become a mega farm, it will have to integrate backward and forward into mega structures, such as large cooperatives, federated structures or marketing orders. The family farm needs to achieve economies of size wherever this is necessary through external organisations. These organisations, besides production costs are loaded with transaction and agency costs. The ability of the stakeholders to minimise these costs is 'path dependent' and depends very much on the 'macro-culture' and the overall institutional framework within which the farms and their organisations operate.

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Assessing the Impact of State Trading Enterprises

January 2011

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45 Reads

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4 Citations

International Economic Journal

State Trading Enterprises (STEs) are periodically subject to intense scrutiny for their suspected negative impact on the international trade of agricultural goods. Sound empirical assessment of the impact of STEs is scant, in spite of the ongoing and intense debate over their impacts, especially in the context of reform at the WTO. In this paper we use the case of world wheat trade between 2212 country pairs over a 35 year span to assess STE impacts. Using a gravity model, we estimate a Poisson pseudo maximum likelihood fixed effects model of world wheat trade to assess the role of both the presence of STEs and STEs with monopoly power. Further addressing estimation challenges, we also estimate zero-inflated versions of Poisson and Negative Binomial Regression models. We find consistent support for the hypothesis that monopoly export STEs are associated with higher exports for their host country. Similarly, import STEs appear to inhibit wheat imports, suggesting a protectionist function.


Innovation and integration in the agri-food industry

April 2010

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426 Reads

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121 Citations

Food Policy

We deal with the link between innovation and market structure using the empirical example of the Danish agri-food industry. Vertical integration may resolve hold-up problems and here we test for the importance of vertical integration and networks on innovation. We further examine the effects of network relationships on innovation behaviour. We use data from an extensive survey of 444 Danish firms over two years, 2000 and 2005 to estimate a bootstrapped zero-inflated Poisson regression model. The first and most significant result is that organization matters. Further we find that vertical integration as well as contractual arrangements are significant determinants for firms' innovation behaviour. The direction of integration is important as well. Also, economies of size seem to play an important role. Similarly, the export orientation of the firm is a significant determinant of innovation whereas the sector the firm is operating in is not significant for its innovation behaviour.


CUSFTA Effects: A Joint Consideration of Trade and Multinational Activities

December 2009

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97 Reads

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7 Citations

Journal of International Trade and Economic Development

This paper estimates the effects of the Canada-US Free Trade Agreement (CUSFTA) on trade, sales of foreign affiliates of multinational enterprises, and total bilateral commerce (aggregate of both trade ands sales of foreign affiliates) in the manufacturing sector. The empirical investigation is carried out over a panel dataset covering the US bilateral transactions with the Organization for Economic Cooperation and Development (OECD) countries for the period 1983-1998. The empirical specification is guided by a gravity-based model that accounts for trade and the operation of foreign affiliates as alternative modes of accessing foreign markets. The results show that the CUSFTA induced an increase in inward and outward trade between the US and Canada, but also led to a significant reduction in sales of their foreign affiliates in the corresponding CUSFTA partner country. This outcome implies that the trade-generating effect of the CUSFTA is overstated.


Home market effect in the presence of multinational activities: Location and nationality

December 2009

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22 Reads

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1 Citation

International Review of Economics

This study examines the phenomenon of home market effect (HME) through a framework where firms can serve a foreign market either via trade or via foreign direct investment (FDI). The results show that HME holds when determined through both location-based and nationality-based criteria. However, compared to the original measure of HME in the absence of FDI, the magnitude of the location-based HME is smaller whereas that of the nationality-based HME is larger. Comparative statics indicate that an increase in trade barriers reduces the magnitude of the location-based HME and that an increase in operative barriers facing foreign affiliates reduces the magnitude of the nationality-based HME. Also, larger restrictions on the foreign ownership of capital accentuate the location-based HME but attenuate the nationality-based HME.


Agricultural Policy: High Commodity and Input Prices

April 2009

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18 Reads

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2 Citations

Agricultural and Resource Economics Review

Because of high commodity prices, beginning in 2006, subsidies to farmers in the United States, the European Union, and Canada have been reduced significantly. However, significant losses have been experienced by the red meat sector, along with escalating food prices. Because of rising input costs, the “farm boom†may not be as great as first thought. Ethanol made from corn and country-of-origin labeling cloud the U.S. policy scene. Higher commodity prices have caused some countries to lower tariff and non-tariff barriers, resulting in freer commodity trade worldwide. Policymakers should attempt to make these trade-barrier cuts permanent and should rethink current policy legislation to deal with the possibility of a collapse of world commodity markets. Agricultural commodity prices have dropped significantly since early 2008.


Induced Innovation in Canadian Agriculture: 1926–87

November 2008

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39 Reads

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12 Citations

Canadian Journal of Agricultural Economics/Revue canadienne d agroeconomie

Technology adopted by Canadian farmers has been induced by changes in factor prices. This paper demonstrates the consistency of the change in factor prices to the bias of technical change. The analysis compares two distinctly different regions of Canada, the Prairies and central Canada. Les technologies qui ont été adoptées par les agriculteurs canadiens ont été influencées par l'évolution des prix des facteurs de production. Le présent document montre la Constance des liens entre la fluctuation de ces prix et les changements technologiques. L'analyse compare deux régions fort distinctes du pays, soit les Prairies et le centre du Canada.


Economic Development of Saskatchewan Wheat Economy

November 2008

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25 Reads

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4 Citations

Canadian Journal of Agricultural Economics/Revue canadienne d agroeconomie

The agricultural system in Saskatchewan has undergone an adaptive change in the past fifty years. This change is in large part due to the technology adopted by the farmers in Saskatchewan. This paper examines some of the changes that have occurred in Saskatchewan agriculture and employs the indirect innovation model of technical change to explain these changes. The relative price change in fuel, machinery, labour and land explained most of the change in the land/labour ratio in Saskatchewan. Implications were then drawn from the analysis regarding farm size in agricultural research. Le systéme agricole en Saskatchewan a subi un changement approprié au cours des cinquante derniéres années. Ce changement est dû, en grande partie, à la technologie adoptée par les fermiers de la Saskatchewan. Cette étude examine certaines des modifications apparues dans l'agriculture de la Saskatchewan et, afin de les expliquer, elle utilise comme modéle les innovations indirectes intervenues dans le changement technologique. La relative fluctuation des prix de l'essence, des machines, de la main-d'oeuvre et des terres a entrainé en grande partie le changement du rapport terre/main-d'oeuvre en Saskatchewan. Des implications ont ensuite été tirées de l'analyse se rapportant à la grandeur des fermes dans la recherche agricole.


A Review of Issues Pertaining to Soil Deterioration in Canada

November 2008

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12 Reads

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8 Citations

Canadian Journal of Agricultural Economics/Revue canadienne d agroeconomie

In Canada, there exists a perception that the annual costs of soil deterioration to farmers are enormous and that, unless something is done quickly to ameliorate the problem of soil degradation, agricultural production potential could be threatened. In this paper, we argue that the on-farm costs of soil degradation are grossly overstated and that Canada' s agricultural future is not on the verge of a catastrophe. Further, we argue that concern with conservation is a philosophical issue which is not readily analyzed in a neoclassical economic framework. However, where this framework has been employed by (primarily) physical scientists, the analysis has resulted in on-farm loss estimates which are somewhat misleading. Au Canada, on perçoit que les coûts annuels aux fermiers à cause de la détérioration du sol sont énormes et que, à moins que quelque chose soit faite bientôt pour améliorer le problème de dégradation du sol, la production potentielle agricole pourrait être menacée. Dans cette étude, nous avançons que les coûts sur la ferme de la dégradation du sol sont grandement exagérés et que le futur agricole au Canada n' est pas sur le point dse catastrophe. En plus, nous avançons que le souci de conservation est une issue philosophique qui n' est pas facilement analysée dans un cadre néoclassique économique. Cependant, là où ce cadre fut utilisé par (surtout) des spécialistes des sciences physiques, les estimations de l' analyse montraient une perte sur la ferme et ceci porte quelque peu à confusion.



Citations (19)


... In contrast to what the name suggests, this type of NTM includes enterprises regardless of whether they are state-owned or state-controlled or not; the crucial criterion is whether the company receives exclusive rights or privileges that shape the level or direction of traded goods (UNCTAD, 2019). STEs, particularly those with a monopoly status, tend to enhance the value of their host countries' exports and restrict imports, suggesting a protectionist function (see, e.g., Pirness et al., 2012;McCorriston and MacLaren, 2013). They account for 0.2% of all notified NTMs in our data collection. ...

Reference:

Characterising non-tariff trade policy
Assessing the Impact of State Trading Enterprises
  • Citing Article
  • January 2011

International Economic Journal

... Second, it could be due to the rise in canola grown in Western Canada since WWII as a major cash crop grown, where the importance of canola led to greater targeting of research expenditures to Western Canadian agriculture than Central Canada. A major crisis for this crop was avoided when the low erucic acid variety rapeseed (trademarked as canola) was rapidly developed following a Health Canada warning that rapeseed oil was carcinogenic in the mid-1960s (e.g., Nagy and Furtan, 1978). This was followed by the development of herbicide-resistant canola in the mid-1990s (e.g., Beckie et al., 2006;Gray et al., 2002). ...

Economic Costs and Returns from Crop Development Research: The Case of Rapeseed Breeding in Canada
  • Citing Article
  • November 2008

Canadian Journal of Agricultural Economics/Revue canadienne d agroeconomie

... Farmland ownership restrictions that eliminate all outside sources of demand, as was done in Saskatchewan, are expected to have a larger impact on farmland prices than restrictions that eliminate only foreign buyers. Several early papers estimate the impact of the ownership legislation on Saskatchewan farmland values; Carlberg and Furtan (2003) and Ferguson et al. (2006) present mixed evidence on the impact of the 1974 restrictions, which limited farmland investment to Saskatchewan residents. ...

Effects of Government Restrictions on Land Ownership: The Saskatchewan Case
  • Citing Chapter
  • April 2008

... The C-D production function is simple and satisfies positive monotonicity and concavity conditions, but the function has strict assumptions. Translog production function is more flexible than C-D such that it is useful to employ the former (Furtan and Gray, 1981). Let Y be a value of product (IDR/ha); L be the labour (manday/ha); F be the inorganic fertilisers (kg/ha); P be the synthetic pesticides (kg/ha); M be the value of other materials such as plastic mulching, bamboo stick, plastic rope, water irrigation and organic fertilisers (IDR/ha); and β i be coefficients of technology. ...

THE TRANSLOG PRODUCTION FUNCTION: APPLICATION TO SASKATCHEWAN AGRICULTURE
  • Citing Article
  • November 2008

Canadian Journal of Agricultural Economics/Revue canadienne d agroeconomie

... Similar two - stage CES approaches are used by Kawagoe et al . ( 1986 ) , who also apply the model to the United States and Japan , Thirtle ( 1985 ) , who considered US wheat production and Karagiannis and Furtan ( 1990 ) , who used Canadian data . Binswanger ' s ( 1974 ) pioneering applications of dual - ity provided further support by fitting a translog cost function and using relative factor prices to explain the residual factor shares , net of factor substitution . ...

Induced Innovation in Canadian Agriculture: 1926–87
  • Citing Article
  • November 2008

Canadian Journal of Agricultural Economics/Revue canadienne d agroeconomie

... In the absence of transaction costs, this encourages optimal use of the resource. Gray et al (2007) provide several examples of common pool goods from the agricultural sector, including generic market promotion, and food safety and quality control. They argue that several aspects of commodity marketing are by nature non-excludable: generic promotion of a commodity benefits all producers of that commodity. ...

The Provision of Goods and Farm Policy in Canada

... The post-COVID-19 adjustments in trade and investment policies and supply chains may transform the methods by which MNEs access international markets, thereby reassessing the benefits of cross-border trade in comparison to FDI, as demonstrated by the proximity-concentration theory [152][153][154]. For example, increased protectionist policies and logistical challenges would make trade-barrier evasion tactics (e.g., undertaking FDI to circumvent trade barriers and serve foreign markets) more attractive. ...

The effects of multinational activities on the measurement of home bias
  • Citing Article
  • September 2008

Journal of the Japanese and International Economies

... The post-COVID-19 adjustments in trade and investment policies and supply chains may transform the methods by which MNEs access international markets, thereby reassessing the benefits of cross-border trade in comparison to FDI, as demonstrated by the proximity-concentration theory [152][153][154]. For example, increased protectionist policies and logistical challenges would make trade-barrier evasion tactics (e.g., undertaking FDI to circumvent trade barriers and serve foreign markets) more attractive. ...

CUSFTA Effects: A Joint Consideration of Trade and Multinational Activities
  • Citing Article
  • December 2009

Journal of International Trade and Economic Development

... A exportação de produto também é um motor da inovação, pois demonstra que a empresa tem capacidade de competir no mercado internacional (De Martino & Magnotti, 2018;Karantininis et al., 2010). Assim tambén como a presença de pessoal qualificado tecnicamente, profissionalmente e gerencialmente determina a capacidade da empresa de implementar e realizar a atividade inovadora (Avermaete et al., 2004;De Martino & Magnotti, 2018). ...

Innovation and integration in the agri-food industry
  • Citing Article
  • April 2010

Food Policy

... precision farming technologies, GMOs, and irrigation technologies) on climate change and environmental sustainability (e.g. Barrett and Abergel, 2000;Cederberg and Mattsson, 2000;Pringle et al., 2003;Furtan, 2007;Pampolino et al., 2007;Vergragt and Brown, 2008;Ahlgren et al., 2009;Gnansounou et al., 2009;Fleischer et al., 2011;Smyth et al., 2011;Mushtaq et al., 2013;Zaher et al., 2013). To carry out these assessments, scholars have applied different TA approaches, such as economic and simulation models, surveys and participatory approaches (ibid). ...

Environmental Costs and Benefits of Transgenic Crops
  • Citing Article
  • August 2007

European Review of Agricultural Economics