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Crop failures and export tariffs

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  • Baake, Pio
  • Huck, Steffen

Abstract

We analyse a stylized model of the world grain market characterized by a small oligopoly of traders with market power on both the supply and demand side. Crops are stochastic and exporting countries can impose export tariffs to protect domestic food prices. Our first result is that export tariffs are strategic complements and that for poor harvests equilibrium tariffs can explode (shedding some light on recent volatility in world food prices). We also show that the strategic interplay between governments of export countries and traders can give rise to a number of peculiar comparative statics. For example, it can be in the interest of traders to have poor harvests in one of the countries. Finally, we demonstrate that traders as well as consumers in import countries can benefit from cooperation between grain exporting countries. -- In diesem Paper analysieren wir ein stilisiertes Modell des weltweiten Getreidemarktes, auf dem ein Oligopol von Händlern sowohl auf der Angebots- wie auf der Nachfrageseite über Marktmacht verfügt. Da Erntemengen stochastisch sind, können die exportierenden Länder Exportzölle festlegen, um die einheimischen Lebensmittelpreise abzusichern. Als erstes Resultat zeigt sich, dass Exportzölle strategisch komplementär sind, so dass etwa bei mageren Ernten Zölle explodieren können (dies sollte etwas Licht auf die derzeitige Volatilität bei den weltweiten Lebensmittelpreisen werfen). Weiterhin zeigt sich, dass das strategische Zusammenspiel zwischen Regierungen von Exportländern und Händlern zu einer Reihe eigentümlicher komparativ-statischer Effekte führen kann - so kann beispielsweise eine kleine Ernte in einem der Länder durchaus im Interesse der Händler sein. Schließlich zeigen wir, dass Händler wie Konsumenten in Importländern von der Kooperation zwischen getreideexportierenden Ländern profitieren können.

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Bibliographic Info

Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Economics of Change with number SP II 2013-315.

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Date of creation: 2013
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Handle: RePEc:zbw:wzbeoc:spii2013315

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Keywords: grain markets; food prices; export tariffs; oligopoly and oligopsony;

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  1. Reza Oladi & John Gilbert, 2009. "Buyer and Seller Concentration in Global Commodity Markets," Working Papers 200911, Utah State University, Department of Economics, revised 15 Sep 2009.
  2. Alan V. Deardorff & Indira Rajaraman, 2009. "Buyer Concentration in Markets for Developing Country Exports," Review of Development Economics, Wiley Blackwell, vol. 13(2), pages 190-199, 05.
  3. Anderson, Kym & Rausser, Gordon & Swinnen, Johan, 2013. "Political economy of public policies : insights from distortions to agricultural and food markets," Policy Research Working Paper Series 6433, The World Bank.
  4. Jacks, David S. & O Rourke, Kevin H. & Williamson, Jeffrey G, 2009. "Commodity Price Volatility and World Market Integration since 1700," CEPR Discussion Papers 7190, C.E.P.R. Discussion Papers.
  5. Anderson, Kym & Nelgen, Signe, 2010. "Trade Barrier Volatility and Agricultural Price Stabilization," CEPR Discussion Papers 8102, C.E.P.R. Discussion Papers.
  6. Antoine Bouët & David Laborde Debucquet, 2012. "Food crisis and export taxation: the cost of non-cooperative trade policies," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 148(1), pages 209-233, April.
  7. Bellemare, Marc F., 2011. "Rising food prices, food price volatility, and political unrest," MPRA Paper 31888, University Library of Munich, Germany.
  8. "Edward" Yu, Tun-Hsiang & Tokgoz, Simla & Wailes, Eric & Chavez, Eddie, 2011. "A quantitative analysis of trade policy responses to higher world agricultural commodity prices," Food Policy, Elsevier, vol. 36(5), pages 545-561, October.
  9. von Braun, Joachim & Tadesse, Getaw, 2012. "Global Food Price Volatility and Spikes: An Overview of Costs, Causes, and Solutions," Discussion Papers 120021, University of Bonn, Center for Development Research (ZEF).
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