Is increased agricultural protection beneficial for South Africa?
AbstractThis paper focuses on the effects that a higher tariff on agriculture and food imports could have on poverty and the macroeconomy using a top down computable general equilibrium microsimulation model. This question is of broader relevance to developing countries that may be contemplating the use of World Trade Organisation permissible trade barriers so as to achieve a domestic policy objective. Generally speaking, the results suggest that doubling protection of agriculture and food would lead to a reallocation of labour toward the sectors with high initial protection and those with high domestic orientation. Agriculture and food sectors are harmed by increased protection if the government chooses to use indirect tax rates to compensate for revenue changes because of induced demand contraction by the indirect tax adjustment. Exports and imports in general decline. The analysis also shows that increasing food and agricultural protection has very negligible but negative effects on welfare and poverty.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 26 (2009)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/inca/30411
CGE model Microsimulation Agricultural trade policy Special and differential treatment Poverty Welfare South Africa;
Other versions of this item:
- Margaret Chitiga & Ramos Mabugu, 2007. "Is Increased Agricultural Protection Beneficial for South Africa?," Working Papers 200717, University of Pretoria, Department of Economics.
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O - Economic Development, Technological Change, and Growth
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