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Agricultural Trade, Biodiversity Effects and Food Price Volatility

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Author Info

  • Cecilia Bellora

    (THEMA and INRA - UMR Economie Publique)

  • Jean-Marc Bourgeon

    (THEMA and INRA - UMR Economie Publique, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)

Abstract

We examine the importance of production risks in agriculture due to biotic elements such as pests in determining the pattern of trade and the distribution of prices in a Ricardian two-country setup. These elements create biodiversity eff ects that result in an incomplete specialization at the free trade equilibrium. Their influence on idiosyncratic production risks evolves depending on the countries' openness to trade. Pesticides allow these eff ects to diminish but they are damaging for the environment and human health. When regulating farming practices, governments have to counterbalance these side-eff ects with the competitiveness of their agricultural sector on international markets. Nevertheless, restrictions on pesticides under free trade are generally more stringent than under autarky.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number hal-00969083.

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Date of creation: 02 Apr 2014
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Handle: RePEc:hal:wpaper:hal-00969083

Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00969083
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Related research

Keywords: agricultural trade; food prices; agrobiodiversity; pesticides;

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  10. Christopher Gilbert & Wyn Morgan, 2010. "Has food price volatility risen?," Department of Economics Working Papers 1002, Department of Economics, University of Trento, Italia.
  11. Brian D. Wright, 2011. "The Economics of Grain Price Volatility," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(1), pages 32-58.
  12. Salvatore Di Falco & Charles Perrings, 2004. "Crop Biodiversity, Risk Management and the Implications of Agricultural Assistance," Working Papers 0084, National University of Ireland Galway, Department of Economics, revised 2004.
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