Is Increased Agricultural Protection Beneficial for South Africa?
AbstractThis paper focuses on the effects that a higher tariff on agriculture and food imports could have on poverty and the macroeconomy using a top down computable general equilibrium microsimulation model. This question is of broader relevance to developing countries that may be contemplating the use of World Trade Organisation permissible trade barriers so as to achieve a domestic policy objective. Generally speaking, the results suggest that doubling protection of agriculture and food would lead to a reallocation of labour toward the sectors with high initial protection and those with high domestic orientation. Agriculture and food sectors are harmed by increased protection if the government chooses to use indirect tax rates to compensate for revenue changes because of induced demand contraction by the indirect tax adjustment. Exports and imports in general decline. The analysis also shows that increasing food and agricultural protection has very negligible but negative effects on welfare and poverty.
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Bibliographic InfoPaper provided by University of Pretoria, Department of Economics in its series Working Papers with number 200717.
Length: 26 pages
Date of creation: Sep 2007
Date of revision:
CGE model; microsimulation; trade policy; special and differential treatment; poverty; welfare; South Africa;
Other versions of this item:
- Mabugu, Ramos & Chitiga, Margaret, 2009. "Is increased agricultural protection beneficial for South Africa?," Economic Modelling, Elsevier, vol. 26(1), pages 256-265, January.
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
This paper has been announced in the following NEP Reports:
- NEP-AGR-2007-11-17 (Agricultural Economics)
- NEP-ALL-2007-11-17 (All new papers)
- NEP-CMP-2007-11-17 (Computational Economics)
- NEP-DEV-2007-11-17 (Development)
- NEP-INT-2007-11-17 (International Trade)
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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