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Trade Barrier Volatility and Agricultural Price Stabilization

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  • Anderson, Kym
  • Nelgen, Signe

Abstract

National barriers to trade are often varied to insulate domestic markets from international price variability. This paper explores the extent of that behavior by governments using estimates of agricultural price distortions in 75 countries. Newly estimated price transmission elasticities are quite low, albeit slightly higher since than before 1985. In the case of extreme upward price spikes, trade policy responses by food importers are as substantial as those of exporting countries. The domestic price-stabilizing effect of intervention by each group is thereby weakened by the other group’s response, suggesting more-effective domestic policy options need to be considered instead of varying trade barriers.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8102.

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Date of creation: Nov 2010
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Handle: RePEc:cpr:ceprdp:8102

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Related research

Keywords: Agricultural trade policies; Commodity price stabilization; Distorted incentives; Domestic market insulation; Price transmission;

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References

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  1. Kym Anderson & John Cockburn & Will Martin, 2010. "Agricultural Price Distortions, Inequality, and Poverty," World Bank Publications, The World Bank, number 2430, October.
  2. Croser, Johanna & Anderson, Kym, 2011. "Changing contributions of different agricultural policy instruments to global reductions in trade and welfare," World Trade Review, Cambridge University Press, vol. 10(03), pages 297-323, July.
  3. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
  4. Ariel Fiszbein & Norbert Schady & Francisco H. G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597, October.
  5. Tovar, Patricia, 2009. "The effects of loss aversion on trade policy: Theory and evidence," Journal of International Economics, Elsevier, vol. 78(1), pages 154-167, June.
  6. Frederick Van der Ploeg & Anthony J. Venables, 2009. "Harnessing Windfall Revenues: Optimal Policies for Resource-Rich Developing Economies," CESifo Working Paper Series 2571, CESifo Group Munich.
  7. Peter Warr, 2005. "Food Policy And Poverty In Indonesia: A General Equilibrium Analysis," Departmental Working Papers 2005-03, The Australian National University, Arndt-Corden Department of Economics.
  8. Thomas W. Hertel & Will Martin & Amanda M. Leister, 2010. "Potential Implications of a Special Safeguard Mechanism in the World Trade Organization: the Case of Wheat," World Bank Economic Review, World Bank Group, vol. 24(2), pages 330-359, August.
  9. Angus Deaton & Guy Laroque, 1990. "On The Behavior of Commodity Prices," NBER Working Papers 3439, National Bureau of Economic Research, Inc.
  10. Tyers,Rod & Anderson,Kym, 1992. "Disarray in World Food Markets," Cambridge Books, Cambridge University Press, number 9780521351058, October.
  11. Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
  12. Paul Collier & Frederick van der Ploeg & Michael Spence & Anthony J Venables, 2009. "Managing Resource Revenues in Developing Economies," OxCarre Working Papers 015, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  13. Anderson, Kym & Martin, William J., 2007. "Distortions to Agricultural Incentives in Asia," Agricultural Distortions Working Paper 48557, World Bank.
  14. Tyers, Rodney, 1991. "On The Neglect Of Dynamics, Risk And Market Insulation In The Analysis Of Uruguay Round Food Trade Reforms," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 35(03), December.
  15. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications, The World Bank, number 9436, October.
  16. Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Measuring distortions to agricultural incentives, revisited," Policy Research Working Paper Series 4612, The World Bank.
  17. Nerlove, Marc, 1972. "Lags in Economic Behavior," Econometrica, Econometric Society, vol. 40(2), pages 221-51, March.
  18. Caroline Freund & Caglar Ozden, 2008. "Trade Policy and Loss Aversion," American Economic Review, American Economic Association, vol. 98(4), pages 1675-91, September.
  19. Byerlee, Derek & Jayne, T.S. & Myers, Robert J., 2006. "Managing food price risks and instability in a liberalizing market environment: Overview and policy options," Food Policy, Elsevier, vol. 31(4), pages 275-287, August.
  20. Minot, Nicholas, 2011. "Transmission of world food price changes to markets in Sub-Saharan Africa:," IFPRI discussion papers 1059, International Food Policy Research Institute (IFPRI).
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Citations

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Cited by:
  1. Diao, Xinshen & Kennedy, Adam & Badiane, Ousmane & Cossar, Frances & Dorosh, Paul & Ecker, Olivier & Hagos, Hosaena Ghebru & Headey, Derek & Mabiso, Athur & Makombe, Tsitsi & Malek, Mehrab & Schmidt, , 2013. "Evidence on key policies for African agricultural growth:," IFPRI discussion papers 1242, International Food Policy Research Institute (IFPRI).
  2. Jean-Christophe Bureau & Sébastien Jean, 2013. "Trade liberalization in the bio-economy: coping with a new landscape," Agricultural Economics, International Association of Agricultural Economists, vol. 44(s1), pages 173-182, November.
  3. Anderson, Kym & Strutt, Anna, 2012. "Agriculture and Food Security in Asia by 2030," ADBI Working Papers 368, Asian Development Bank Institute.
  4. Pio Baake & Steffen Huck, 2013. "Crop Failures and Export Tariffs," Discussion Papers of DIW Berlin 1342, DIW Berlin, German Institute for Economic Research.
  5. Kym Anderson, 2012. "Agricultural Trade Distortions During the Global Financial Crisis," Departmental Working Papers 2012-05, The Australian National University, Arndt-Corden Department of Economics.
  6. Gouel, Christophe & Jean, Sebastien, 2012. "Optimal food price stabilization in a small open developing country," Policy Research Working Paper Series 5943, The World Bank.
  7. Gotz, Linde & Qiu, Feng & Gervais, Jean-Philippe & Glauben, Thomas, 2012. "Export Restrictions And Multiple Spatial Price Equilibria When International Prices Spike: Export Quotas For Wheat In Ukraine," 2012: New Rules of Trade?, December 2012, San Diego, California 143179, International Agricultural Trade Research Consortium.
  8. Götz, Linde & Qiu, Feng & Gervais, Jean-Philippe & Glauben, Thomas, 2013. "Export Restrictions and Multiple Spatial Price Equilibria: Export Quotas for Wheat in Ukraine," 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 156135, German Association of Agricultural Economists (GEWISOLA).
  9. Kym Anderson & Anna Strutt, 2014. "Food security policy options for China: lessons from other countries," Departmental Working Papers 2014-11, The Australian National University, Arndt-Corden Department of Economics.
  10. Kym Anderson, 2012. "Policy Responses to Changing Perceptions of the Role of Agriculture in Development," Departmental Working Papers 2012-11, The Australian National University, Arndt-Corden Department of Economics.
  11. Brooks, Jonathan, 2014. "Policy coherence and food security: The effects of OECD countries’ agricultural policies," Food Policy, Elsevier, vol. 44(C), pages 88-94.
  12. Kym Anderson, 2012. "Costing Global Trade Barriers, 1900 to 2050," Departmental Working Papers 2012-08, The Australian National University, Arndt-Corden Department of Economics.
  13. Götz, Linde & Goychuk, Kateryna & Glauben, Thomas & Meyers, William H., 2013. "Export Restrictions and Market Uncertainty: Evidence from the Analysis of Price Volatility in the Ukrainian Wheat Market," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150308, Agricultural and Applied Economics Association.
  14. Karapinar, Baris & Tanaka, Tetsuji, 2013. "How to Improve World Food Supply Stability Under Future Uncertainty: Potential Role of WTO Regulation on Export Restrictions in Rice," 135th Seminar, August 28-30, 2013, Belgrade, Serbia 160387, European Association of Agricultural Economists.
  15. Anderson, Kym & Strutt, Anna, 2012. "Asia’s Growth, the Changing Geography of World Trade, and Food Security: Projections to 2030," CEPR Discussion Papers 8950, C.E.P.R. Discussion Papers.

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