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Modeling the Welfare Implications of Agricultural Policies in Developing Countries

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Author Info

  • Jonasson, Erik

    ()
    (Department of Economics, Lund University)

  • Filipski, Mateusz

    ()
    (University of California, Davis)

  • Brooks, Jonathan

    ()
    (OECD)

  • Taylor, J. Edward

    ()
    (University of California, Davis)

Abstract

This paper presents a new model which incorporates features of developing country agriculture that may be critical in shaping the welfare outcomes of alternative agricultural policies. The model features heterogeneous households linked through markets in a rural economy-wide structure, with endogenous market participation for farmers facing transactions costs. The model is used for policy simulations, including market price support, production subsidies, input subsidies, transaction cost removal, and unconditional cash transfers. Applications for six countries highlight the diversity of potential impacts of such policies. The simulation results suggest that there are circumstances under which some market interventions, such as input subsidies, may be only slightly less efficient at transferring incomes than direct payments.

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Bibliographic Info

Paper provided by Lund University, Department of Economics in its series Working Papers with number 2012:11.

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Length: 23 pages
Date of creation: 15 May 2012
Date of revision:
Publication status: Published as Jonasson, Erik, Mateusz Filipski, Jonathan Brooks and J. Edward Taylor, 'Modeling the Welfare Implications of Agricultural Policies in Developing Countries' in Journal of Policy Modeling, 2014, pages 63-82.
Handle: RePEc:hhs:lunewp:2012_011

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Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
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Related research

Keywords: agricultural household model; agricultural policy; simulation; transaction costs;

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Nabil Annabi & Fatou Cissé & John Cockburn & Bernard Decaluwé, 2005. "Trade Liberalisation, Growth and Poverty in Senegal: a Dynamic Microsimulation CGE Model Analysis," Cahiers de recherche 0512, CIRPEE.
  2. Jonathan Brooks & Mateusz Filipski & Erik Jonasson & J. Edward Taylor, 2011. "Modelling the Distributional Implications of Agricultural Policies in Developing Countries: The Development Policy Evaluation Model (DEVPEM)," OECD Food, Agriculture and Fisheries Papers 50, OECD Publishing.
  3. John Cockburn, 2004. "Trade Liberalisation and Poverty in Nepal A Computable General Equilibrium Micro Simulation Analysis," Development and Comp Systems 0409012, EconWPA.
  4. Joe Dewbre & Jes�s Ant�n & Wyatt Thompton, 2001. "The Transfer Efficiency and Trade Effects of Direct Payments," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1204-1214.
  5. Winters, Paul & Davis, Benjamin & Carletto, Gero & Covarrubias, Katia & Quiñones, Esteban J. & Zezza, Alberto & Azzarri, Carlo & Stamoulis, Kostas, 2009. "Assets, Activities and Rural Income Generation: Evidence from a Multicountry Analysis," World Development, Elsevier, vol. 37(9), pages 1435-1452, September.
  6. Christopher B. Barrett & Paul A. Dorosh, 1996. "Farmers' Welfare and Changing Food Prices: Nonparametric Evidence from Rice in Madagascar," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 656-669.
  7. Alberto Zezza & Benjamin Davis & Carlo Azzarri & Katia Covarrubias & Luca Tasciotti & Gustavo Anriquez, 2008. "The Impact of Rising Food Prices on the Poor," Working Papers 08-07, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  8. Steve Boucher & J. Edward Taylor, 2006. "Subsistence Response to Market Shocks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 279-291.
  9. Saleem Shaik & Glenn A. Helmers & Joseph A. Atwood, 2005. "The Evolution of Farm Programs and Their Contribution to Agricultural Land Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1190-1197.
  10. Jonathan Brooks & Mateusz Filipski & Erik Jonasson & J. Edward Taylor, 2011. "The Development Policy Evaluation Model (DEVPEM): Technical Documentation," OECD Food, Agriculture and Fisheries Papers 51, OECD Publishing.
  11. Cororaton, Caesar B. & Cockburn, John, 2007. "Trade reform and poverty--Lessons from the Philippines: A CGE-microsimulation analysis," Journal of Policy Modeling, Elsevier, vol. 29(1), pages 141-163.
  12. Filho, Joaquim Bento de Souza Ferreira & Horridge, Mark, 2005. "The Doha Round, poverty, and regional inequality in Brazil," Policy Research Working Paper Series 3701, The World Bank.
  13. Hans L�fgren & Sherman Robinson, 1999. "Nonseparable Farm Household Decisions in a Computable General Equilibrium Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 663-670.
  14. de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-417, November.
  15. Davis, Benjamin & Winters, Paul & Carletto, Gero & Covarrubias, Katia & Quiñones, Esteban J. & Zezza, Alberto & Stamoulis, Kostas & Azzarri, Carlo & DiGiuseppe, Stefania, 2010. "A Cross-Country Comparison of Rural Income Generating Activities," World Development, Elsevier, vol. 38(1), pages 48-63, January.
  16. John E. Floyd, 1965. "The Effects of Farm Price Supports on the Returns to Land and Labor in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 73, pages 148.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. About agricultural policies in developing economies
    by Economic Logician in Economic Logic on 2012-06-18 14:22:00
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Cited by:
  1. J. Edward Taylor, 2012. "A Methodology for Local Economy-Wide Impact Evaluation (LEWIE) of Cash Transfers," Working Papers 99, International Policy Centre for Inclusive Growth.

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