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Evaluating alternative policy responses to higher world food prices: The case of increasing rice prices in Madagascar

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Author Info

  • Coady,David
  • Dorosh,Paul
  • Minten,Bart

Abstract

"Higher world food prices have led many governments in developing countries to adopt policy measures to mitigate the adverse impact on low-income households. This paper sets out a partial equilibrium framework to evaluate the relative efficiency, distributional, and revenue implications of alternative policy responses. The model is applied to Madagascar data to evaluate the net welfare impact of reductions in rice tariffs and to compare this to the alternative policy of targeted transfers. Lowering tariffs is not a cost-effective approach to protecting low-income households due to substantial leakage of benefits to higher income households and an adverse impact on poor net rice producers even when the substantial efficiency gains from such tariff reductions are incorporated into the analysis. Developing a system of well-designed and -implemented targeted direct transfers to poor households is thus likely to be a substantially more cost-effective approach to poverty alleviation, especially if these can be linked to productivity-enhancing investments. Such an approach should be financed by switching revenue raising from rice tariffs to more efficient tax instruments. These policy conclusions are likely to be robust to the incorporation of general equilibrium considerations." from Author's Abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 780.

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Date of creation: 2008
Date of revision:
Handle: RePEc:fpr:ifprid:780

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Related research

Keywords: rice; Import tariffs; Targeted transfers; Welfare impacts; Globalization; Markets; Food prices;

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Cited by:
  1. Baffes, John & Haniotis, Tassos, 2010. "Placing the 2006/08 commodity price boom into perspective," Policy Research Working Paper Series 5371, The World Bank.
  2. Cooke, Bryce & Robles, Miguel, 2009. "Recent food prices movements: A time series analysis," IFPRI discussion papers 942, International Food Policy Research Institute (IFPRI).
  3. "Edward" Yu, Tun-Hsiang & Tokgoz, Simla & Wailes, Eric & Chavez, Eddie, 2011. "A quantitative analysis of trade policy responses to higher world agricultural commodity prices," Food Policy, Elsevier, vol. 36(5), pages 545-561, October.
  4. repec:laf:wpaper:201106 is not listed on IDEAS
  5. Miranda, Mario J. & Farrin, Kathleen M. & Larson, Donald F. & Chen, Shu-Ling, 2013. "Differential Effects of Food Security Policies on Subsistence Farmers and the Urban Poor," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149736, Agricultural and Applied Economics Association.
  6. Delphine Boutin, 2011. "D’une crise à l’autre : Mesurer l’impact des prix alimentaires sur la pauvreté," Larefi Working Papers 1106, Larefi, Université Bordeaux 4.

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