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Trade Policy Options for a Food-Security Commodity in Southern Africa: A Case Study of Maize in Zambia

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  • Gallagher, Paul W.
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    Abstract

    We examine the performance of maize import policy options in one of the poorest countries in Southern Africa. The results are shaped by unique features of Zambia’s maize market: production that is limited by risk and highly variable returns, and local marketing margins that increase with imports and limit consumer trade gains. Results suggest that the market-stabilizing protection with the variable import levy (VL) may improve welfare, compared free trade or the current tariff regime. The VL also redistributes benefits to farmers and rural residents and away from urban consumers. Tax revenues could be used to fund transportation improvements or an urban consumer subsidy. Also, we estimate that market-led improvements in transport infrastructure, which would be conducive to more open trade policies, may be 25 years away.

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    File URL: http://www.econ.iastate.edu/sites/default/files/publications/papers/p14830-2012-01-24.pdf
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    Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 34830.

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    Date of creation: 24 Jan 2012
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    Handle: RePEc:isu:genres:34830

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    Keywords: Maize Policy; Zambia; Food Security; Variable Levy;

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    1. Foster, Kenneth A. & Mwanaumo, Anthony, 1995. "Estimation of dynamic maize supply response in Zambia," Agricultural Economics, Blackwell, vol. 12(1), pages 99-107, April.
    2. Marsh, John S, 1984. "The Reform of the CAP: National Interests and Financial Implications," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 11(2), pages 141-50.
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