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Illicit Agricultural Trade

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  • Ferrier, Peyton Michael

Abstract

Agricultural and wildlife trade is subject to sudden, disruptive import restrictions arising from concerns over sanitary and phytosanitary safety and the conservation of natural resources. These restrictions can create significant international price differences that encourage the smuggling of goods across borders. This article presents an equilibrium model of smuggling where the supply and demand for smuggled goods depend on interregional price disparities in the presence of a trade ban. In this model, smuggling is more prevalent when demand and supply among trade partners is more inelastic or when there are fewer total trade partners at the time a trade ban is enacted. Applications are presented for regionalization, destruction of goods in government eradication programs, price support, stockpiling, and the development of substitutes. Regionalization may increase smuggling under certain production and consumption patterns.

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File URL: http://purl.umn.edu/45668
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Bibliographic Info

Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 37 (2008)
Issue (Month): 2 (October)
Pages:

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Handle: RePEc:ags:arerjl:45668

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Web page: http://www.narea.org/
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Related research

Keywords: illicit trade; invasive species; smuggling; SPS Agreement; CITES; Endangered Species Act; regionalization; International Relations/Trade;

References

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Cited by:
  1. Ferrier, Peyton, 2010. "Irradiation as a quarantine treatment," Food Policy, Elsevier, vol. 35(6), pages 548-555, December.
  2. Ferrier, Peyton Michael, 2009. "The Economics of Agricultural and Wildlife Smuggling," Economic Research Report 55951, United States Department of Agriculture, Economic Research Service.

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