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Aggregate Agricultural Supply Response in Developing Countries: A Survey of Selected Issues

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  • Schiff, Maurice
  • Montenegro, Claudio E

Abstract

The authors review several studies of the aggregate agricultural supply response. Using both economic and econometric reasons, they argue that time series estimation typically generates a downward-biased estimate of the response to a credible reform. Even though time series estimates can provide an accurate picture of past behavoiral relations, they do not provide an adequate basis for forecasting the impact of policy reform. This is especially true in developing countries, where policy reforms involve large changes and have included agricultural price reform, industrial trade liberalization, financial sector reform, and macroeconomic stabilization. Under those circumstances, parameters values obtained under the former policy regime have little relevance in the new regime. The authors also argue that investment in public goods should be viewed as complementary to, not competitive with, price policy. They claim that to select the policy with the biggest impact on output makes no sense. They provide what they consider to be better criteria for choosing the best from alternative policies.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 45 (1997)
Issue (Month): 2 (January)
Pages: 393-410

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Handle: RePEc:ucp:ecdecc:v:45:y:1997:i:2:p:393-410

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References

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  1. Boussard, J M, 1985. "Is Agricultural Production Responsive to Prices?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 12(1-2), pages 31-44.
  2. Platteau, J.P., 1993. "Sub-Saharan Afraica as a Special Case: The Crucial Role of (Infra)Structural Constraints," Papers 128, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  3. Cavallo, Domingo & Mundlak, Yair, 1982. "Agriculture and economic growth in an open economy: the case of Argentina," Research reports 36, International Food Policy Research Institute (IFPRI).
  4. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
  5. Krueger, Anne O & Schiff, Maurice & Valdes, Alberto, 1988. "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review, World Bank Group, vol. 2(3), pages 255-71, September.
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Cited by:
  1. Thiele, Rainer, 2003. "Price Incentives, Non-Price Factors, And Agricultural Production In Sub-Saharan Africa: A Cointegration Analysis," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25901, International Association of Agricultural Economists.
  2. Luis Lanteri, 2009. "Response of the Argentine Soybean Sown Area to Prices," BCRA Working Paper Series 200944, Central Bank of Argentina, Economic Research Department.
  3. World Bank, 2012. "Responding to Higher and More Volatile World Food Prices," World Bank Other Operational Studies 12950, The World Bank.
  4. Roman Keeney & Thomas W. Hertel, 2008. "U.S. Market Potential For Dried Distillers Grain With Solubles," Working Papers 08-13, Purdue University, College of Agriculture, Department of Agricultural Economics.
  5. Headey, Derek & Bezemer, Dirk & Hazell, Peter B., 2008. "Agricultural exit problems: Causes and consequences," IFPRI discussion papers 802, International Food Policy Research Institute (IFPRI).
  6. Tschirley, David L. & del Castillo, Anne Marie, 2007. "Local and Regional Food Aid Procurement: An Assessment of Experience in Africa and Elements of Good Donor Practice," Food Security Collaborative Working Papers 54486, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  7. Surajit Deb, 2003. "Terms of Trade and Supply Response of Indian Agriculture: Analysis in Cointegration Framework," Working papers 115, Centre for Development Economics, Delhi School of Economics.
  8. Surajit Deb, 2002. "The Debate on Agriculture-Industry Terms of Trade in India," Working papers 109, Centre for Development Economics, Delhi School of Economics.
  9. Aboagye, Anthony Q. & Gunjal, Kisan, 2000. "An analysis of short-run response of export and domestic agriculture in sub-Saharan Africa," Agricultural Economics, Blackwell, vol. 23(1), pages 41-53, June.
  10. M. Branchi & G. Gabriele & V. Spiezia, 1999. "Traditional Agricultural Exports, External Dependency And Domestic Price Policies. African Coffee Exports In A Comparative Perspective," UNCTAD Discussion Papers 140, United Nations Conference on Trade and Development.
  11. Luis Lanteri, 2008. "Argentina’s Soybean Acreage Response to Changes in Price Incentives," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(52), pages 57-86, October -.
  12. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March.
  13. Céline Guimas, 2012. "Effect of organic contract farming on labor demand. A study case in the Western Uganda," Post-Print dumas-00802135, HAL.
  14. Nouve, Kofi & Staatz, John M., 2003. "The Food Security Debate In West Africa Following The Wto Agreements On Agriculture," Staff Papers 11746, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  15. Tschirley, David L. & del Castillo, Anne Marie, 2007. "Local and Regional Food Aid Procurement: An Assessment of Experience in Africa and Elements of Good Donor Practice," Food Security International Development Working Papers 54562, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  16. Rainer Thiele, 2000. "Estimating the Aggregate Agricultural Supply Response: A Survey of Techniques and Results for Developing Countries," Kiel Working Papers 1016, Kiel Institute for the World Economy.

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