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Yield Variability and Agricultural Trade

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  • Reimer, Jeffrey J.
  • Li, Man

Abstract

We examine how changes in yield variability affect the welfare of cereal grain and oilseed buyers and producers around the world. We simulate trade patterns and welfare for 21 countries with a Ricardian trade model that incorporates bilateral trade costs and crop yield distributions. The model shows that world trade volumes would need to increase substantially if crop yield variability were to rise. Net welfare effects, however, are moderate so long as countries do not resort to policies that inhibit trade, such as export restrictions or measures to promote self-sufficiency in crops. Low-income countries suffer the most from increases in yield variability, due to higher bilateral trade costs and lower-than-average productivity.

Suggested Citation

  • Reimer, Jeffrey J. & Li, Man, 2009. "Yield Variability and Agricultural Trade," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(2), October.
  • Handle: RePEc:ags:arerjl:55543
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    References listed on IDEAS

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    1. Murat Isik & Stephen Devadoss, 2006. "An analysis of the impact of climate change on crop yields and yield variability," Applied Economics, Taylor & Francis Journals, vol. 38(7), pages 835-844.
    2. Randhir, Timothy O. & Hertel, Thomas W., 2000. "Trade Liberalization As A Vehicle For Adapting To Global Warming," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(2), October.
    3. Reilly, John & Hohmann, Neil, 1993. "Climate Change and Agriculture: The Role of International Trade," American Economic Review, American Economic Association, vol. 83(2), pages 306-312, May.
    4. Alvarez, Fernando & Lucas, Robert Jr., 2007. "General equilibrium analysis of the Eaton-Kortum model of international trade," Journal of Monetary Economics, Elsevier, vol. 54(6), pages 1726-1768, September.
    5. Daniel G. Hallstrom, 2004. "Interannual Climate Variation, Climate Prediction, and Agricultural Trade: the Costs of Surprise versus Variability," Review of International Economics, Wiley Blackwell, vol. 12(3), pages 441-455, August.
    6. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
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    Citations

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    Cited by:

    1. Ferguson, Shon & Gars, Johan, 2016. "Productivity Shocks, International Trade and Import Prices: Evidence from Agriculture," Working Paper Series 1107, Research Institute of Industrial Economics.
    2. Diagne, Mandiaye & Abele, Steffen & Diagne, Aliou & Seck, Papa Abdoulaye, 2013. "Agricultural trade for food security in Africa: A Ricardian model approach," 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161466, African Association of Agricultural Economists (AAAE).
    3. Syud Amer Ahmed & Noah S. Diffenbaugh & Thomas W. Hertel & William J. Martin, 2012. "Agriculture and Trade Opportunities for Tanzania: Past Volatility and Future Climate Change," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 429-447, August.
    4. Óscar A. Alfonso R. & Carlos E. Alonso M., 2016. "Alimentación Para Las Metrópolis Colombianas. Fragilidad Territorial, Vulnerabilidad A Las Anomalías Del Clima Y Circulación De Agroalimentos," Books, Universidad Externado de Colombia, Facultad de Economía, edition 1, number 73, EJSER Sep.
    5. Diagne, Mandiaye & Abele, Steffen & Diagne, Aliou & Seck, Papa Abdoulaye, 2012. "Agricultural trade for food security in Africa: A Ricardian model approach," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 123842, International Association of Agricultural Economists.
    6. Anne Clerval, 2016. "París contra el pueblo. La gentrificación de la capital," Books, Universidad Externado de Colombia, Facultad de Economía, edition 1, number 74, EJSER Sep.
    7. Ferguson, Shon & Gars, Johan, 2015. "Productivity Shocks, International Trade and Pass-Through: Evidence from Agriculture," 2015 Conference, August 9-14, 2015, Milan, Italy 211646, International Association of Agricultural Economists.
    8. Karapinar, Baris & Tanaka, Tetsuji, 2013. "How to Improve World Food Supply Stability Under Future Uncertainty: Potential Role of WTO Regulation on Export Restrictions in Rice," 135th Seminar, August 28-30, 2013, Belgrade, Serbia 160387, European Association of Agricultural Economists.

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