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Impacts of Stockholding Behaviour on Agricultural Market Volatility: A Dynamic Computable General Equilibrium Approach

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  • Femenia, Fabienne

Abstract

Successive CAP reforms raise the question of whether it can have a price-stabilizing capability. In this context more and more attention is being paid to private risk-managing instruments such as storage. The effects of storage have already been widely studied in the economic literature. But hardly any of these studies take account of the links between producers’, households’ and stockholders’ intertemporal decisions and, in particular, they do not use a dynamic CGE model. Furthermore, a large number of previous studies focus on the effect of stockholding on price volatility due to exogenous shocks and assume rational expectations. It is more the endogenous aspect of risk, induced by expectation errors, that has often been used to justify public intervention in agricultural markets. In this paper we construct a model addressing these issues and we conduct some illustrative simulations. Some of our results are at variance with the conclusions of previous economic studies concerning the effects of speculative storage on market volatilities. We also reveal the vital role played by the form of economic agents’ expectations and by the links between the intertemporal decisions of market participants. Nach den verschiedenen Reformen der Gemeinsamen Agrarpolitik stellt sich zunehmend die Frage, ob von dieser Politik noch eine preisstabilisierende Funktion ausgehen kann. Zunehmende Bedeutung wird daher privaten Risikomanagementstrategien beigemessen, insbesondere der privaten Lagerhaltung. In der ökonomischen Literatur sind Wirkungen der Lagerhaltung bereits ausführlich untersucht worden. Allerdings ist den Beziehungen zwischen den intertemporalen Entscheidungen von Produzenten, Haushalten und Lagerhaltern kaum nachgegangen worden, insbesondere nicht im Rahmen eines dynamischen allgemeinen Gleichgewichtsmodells. Überdies hat sich die Mehrzahl vorhandener Studien auf den Effekt der Lagerhaltung auf die Preisvolatilität konzentriert, die von exogenen Produktionsschwankungen ausgehen, und es wurde vollkommene Voraussicht unterstellt. Endogene Produktionsschwankungen, die auf fehlerhafte Preiserwartungsbildung zurückgehen, sind aber häufig zur Begründung staatlicher Eingriffe auf Agrarmärkten herangezogen worden. Dieser Beitrag greift diesen Aspekt endogenen Risikos auf. Es wird ein allgemeines Gleichgewichtsmodell formuliert unter Berücksichtigung von privater Lagerhaltung und fehlerhafter Preiserwartungsbildung der Produzenten, und ausgewählte Modellsimulationen werden vorgestellt. Die Ergebnisse zeigen, dass mehrere bisherige Erkenntnisse zu den Effekten privater Lagerhaltung auf die Volatilität von Agrarmärkten zu revidieren sind. Die Form der Erwartungsbildung ist entscheidend für die ermittelten Wirkungen privater Lagerhaltung und auch die Tatsache, wie die intertemporalen Entscheidungen der Marktteilnehmer miteinander verbunden sind.

Suggested Citation

  • Femenia, Fabienne, 2010. "Impacts of Stockholding Behaviour on Agricultural Market Volatility: A Dynamic Computable General Equilibrium Approach," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).
  • Handle: RePEc:ags:joiatd:145293
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    References listed on IDEAS

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    1. Femenia, Fabienne, 2011. "To Subsidize or Not to Subsidize Private Storage? Evaluation of the Effects of Private Storage Subsidies as an Instrument to Stabilize Agricultural Markets After CAP Reforms," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114360, European Association of Agricultural Economists.
    2. Femenia, Fabienne, 2012. "Should private storage be subsidized to stabilize agricultural markets after price support schemes are removed?:," IFPRI discussion papers 1205, International Food Policy Research Institute (IFPRI).

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