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The Paradox of Agricultural Trade Liberalization in Bangladesh and Tanzania

Author

Listed:
  • Chile, Love M.

    (Associate Professor, Institute of Public Policy, School of Social Sciences and Public Policy, Auckland University of Technology, Auckland, New Zealand)

  • Talukder, Dayal

    (Lecturer, ICL Business School, Auckland, New Zealand)

Abstract

This paper examines some of the contradictions and theoretical ambiguities of agricultural trade liberalization on the welfare of smallholder farmers. Using production, consumption, and price data for pre-and post-liberalization periods for two main crops from Bangladesh (rice) and Tanzania (maize), we critically analyze the correlation between domestic and international prices of rice in Bangladesh and maize in Tanzania to estimate the impact of agricultural trade liberalization on price stability/volatility and food security to measure economic benefits of trade liberalization on smallholder farmers. Using the coefficient of variation of the level of prices (CV) and corrected coefficient of variation (CCV) as measured by Huchet-Bourdon (2011), we found that the values of both CV and CCV for consumer prices in the post-liberalization were quite large, suggesting greater volatility of consumer price of rice in Bangladesh and maize in Tanzania in the post-liberalization period. We conclude that price volatility diminishes the potential benefits of agricultural trade liberalization for smallholder farmers who are net-deficit producers and net-deficit sellers. We recommend supplementary policy interventions to achieve enhanced welfare from trade liberalization.

Suggested Citation

  • Chile, Love M. & Talukder, Dayal, 2014. "The Paradox of Agricultural Trade Liberalization in Bangladesh and Tanzania," American Journal of Trade and Policy, Asian Business Consortium, vol. 1(1), pages 23-31.
    • Handle: RePEc:ris:ajotap:0129
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    Cited by:

    1. Amin, Mohammed Nafeez Al, 2015. "Implications of TTIP and TPP on Bangladesh and Nepal," Asian Business Review, Asian Business Consortium, vol. 5(1), pages 7-12.

    More about this item

    Keywords

    Agricultural trade liberalization; Rice production; consumption and trade; Bangladesh; Maize production; Tanzania; Price volatility;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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