Maize Trade Liberalization vs. Fertilizer Subsidies in Tanzania: A CGE Model Analysis with Endogenous Soil Fertility
AbstractThis paper presents an analysis on economy-environmental interlinkages for Tanzania by using a computable general equilibrium (CGE) model based on a social accounting matrix. The purpose of the analysis is to include general equilibrium effects when evaluating two suggested policy measures meant to stimulate growth and crop production. The model is multisectoral with a particular focus on crop producing sectors and soil mining processes. Maize trade liberalization and a fertilizer subsidy are considered. The model simulations show that both policy reforms have expansive effects and that there are significant sectoral complementarities between agriculture and non-agriculture in Tanzania. Fertilizer subsidies promotes cash crop production and a more land intensive production pattern in agriculture, while a maize trade liberalization stimulates food crops and a more land extensive agriculture. Fertilizer subsidies are found to imply far more expansive effects than a trade liberalization does. Only minor differences are identified between the two policy reforms as concerning their impact on the balance of trade, distribution and the environment.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 249.
Date of creation: Feb 1999
Date of revision:
CGE-model; soil fertility; trade reform; agricultural subsidy.;
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
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