This paper analyzes how pest control advisers induce inefficient pesticide spraying through their distorted advising. There are two types of errors that advisers can make: the type I error (failing to give advice to spray when pest density is high enough to necessitate spraying), and the type II error (giving advice to spray when pest density is low enough to omit spraying). However, farmers can detect these errors only if they avoid spraying. If advisers have a disposition to suffer sufficiently high psychic disutility with the type I error detected by farmers, they are likely to give advice to spray even when they expect that pest density is more likely to be low and that spraying is disadvantageous to farmers. When advising is distorted in this way, it is likely that farmers are misled to choose spraying when in fact spraying is expected to be disadvantageous to them, or that they fail to conduct spraying, disregarding the advice when in fact spraying is expected to be advantageous to them. In such cases, farmers receive no benefit from advice as a result of their erroneous spraying behavior. This kind of advice distortion can be caused by declines in the price of pesticide or in spraying costs, or by raises in the economic value of pest damage to crops.

An endogenous growth mechanism of productivity is incorporated into a neoclassical induced innovation model. The time-series-based econometric analysis on Japanese rice production provides evidence supporting the technological change process of learning-by-doing and technological spillover. The learning-by-doing effect is confirmed by cointegration between the capital and the total factor productivity (TFP), and the technological spillover effect is confirmed by the Granger-causality tests for the TFP of large-scale producers and that of small-scale producers. The cointegrating relationship between capital and labor series shows the presence of a long-run growth path in production. The error correction model of the production function illustrates the endogenous technological change process. Presence of the externality in innovation implies that a capital-intensive technology is likely to be created. Improvement in product quality is indirectly induced by diminishing returns to capital and it also has a spillover effect, so that it may also be regarded, in a broad sense, as a part of the endogenous innovation effect.

This paper investigates the existence of underemployment in the agricultural sector of Vietnam, which leads to a low relative income in the sector. The investigation is conducted by comparing the estimates of marginal productivity of labor and the wage rate.The marginal productivity of labor for farm households and for the nation as a whole are obtained by estimating the production function, using a Living Standards Survey conducted in 1993. The empirical results suggest that the marginal productivity of labor in the agricultural sector is far less than its wage rate, which implies the existence of underemployment. Moreover, the estimation indicated that about 77% of the agricultural labor force is found to be underemployed. Reducing underemployment in the agricultural sector should therefore be one of the most important policy targets in Vietnam.

The significance of pluriactivity is increasingly recognized in industrialized countries.The growing significance of rural policy in these countries requires clarification of the new roles of pluriactive farms in connection with the multifunctionality of agriculture and rural areas. This has drawn attention recently. However, until recently little was known about what contribution pluriactive farms have made to land preservation, which has been pointed out as one factor of multifunctionality. Moreover, an analytical framework for exploring this externality of pluriactivity has not yet been established. This paper therefore defines the contribution to land preservation by pluriactive farms as an internalization process of externality in hamlets and tries to detect this internalization process as signaling. Then this paper clarifies what process was involved in this contribution and what characteristics of pluriactive farms contribute to this process. The results show how pluriactive farms offering farm-based accommodations attain both private management and local farmland preservation under favorable farming conditions while householders hold off-farm jobs in western Japan. These farms do this by shifting their farming to labor-efficient rice production and by increasing their farm areas by taking on farmland from older farms. This behavior is supported by group farming within the hamlet area, which we can define as an off-farm farming activity. This paper reveals this complementary effect of pluriactivity in the hamlets, which prevents farmland from being abandoned. This is modern incentive-compatible behavior of farmers in the rural community, which attains both household and community rationality, and was measured as signaling.This signaling can provide a logical basis for public support of these farms. Thus it can be an effective tool for policy evaluation of farm activities having external effects such as multifunctionality.

The aim of this paper is to assess the impacts of successive generations of modern variety (MV) of rice on rice yields and income from 1966/67 to 1998/99. Yield rose albeit modestly following the release of first-generation of MVs (MV1), which are potentially higher yielding than the traditional varieties (TVs) but are susceptible to attacks of pests and diseases. Rice income per hectare per season did not rise with the adoption of MV1 indicating that the income-increasing effect of MV1 is limited. A major yield boost was achieved following the diffusion of the second-generation of MVs (MV2), which incorporated resistance against multiple pests and diseases. MV2 has a significant positive effect on rice income because of its high yield and suitability for dry season cropping. Moreover, input prices remained low in the years of diffusion of MV2, which further complements the positive effect of MV2 on rice income. Yield began to stagnate with the diffusion of the third-generation of MVs (MV3) because MV3 are superior with respect to grain quality but not so much with respect to yield. Meanwhile, wage rates rose rapidly during the period of diffusion of MV3 as a result of the development of non-farm sector. Rice income has remained fairly the same during the period of diffusion of MV3.