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A quantitative analysis of trade policy responses to higher world agricultural commodity prices

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  • Edward Yu, Tun-Hsiang
  • Tokgoz, Simla
  • Wailes, Eric
  • Chavez, Eddie

Abstract

The worldwide spike in prices of agricultural commodities in 2007-2008 elevated food security and social stability issues to the forefront, especially in many food-deficit countries. In order to mitigate the global food commodity price pressure on domestic markets, several major exporting and importing countries, mostly developing economies, adopted trade policy changes such as export bans (or raising export restrictions) or reducing import tariffs during the same period. This paper estimates the potential impacts of these policies on the world prices and trade of major agricultural commodities using a set of multi-country, multi-commodity, and partial-equilibrium models. Our findings suggest that over all, the trade policy responses in various countries increased the prices of all agricultural commodities, although the impact on the total net trade varies by commodity. The simulation results show that the overall impact of trade policy distortions on the world rice price is most significant at 24%, followed by wheat (14%) and barley (9%). In general, the poorer food-deficit countries/regions, which have limited power to manipulate their trade policies, experienced higher price increases compared to those major trading countries that adopted policy interventions. Also, the developing countries that are net importers which did not implement trade policy interventions experienced significant welfare losses resulting from interventions implemented by other major trading countries.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:jfpoli:v:36:y:2011:i:5:p:545-561
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    References listed on IDEAS

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    Cited by:

    1. Elleby, Christian, 2014. "Poverty and Price Transmission," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182722, European Association of Agricultural Economists.
    2. Pio Baake & Steffen Huck, 2013. "Crop Failures and Export Tariffs," Discussion Papers of DIW Berlin 1342, DIW Berlin, German Institute for Economic Research.
    3. Laborde Debucquet, David & Majeed, Fahd & Tokgoz, Simla & Torero, Máximo, 2016. "Long-term drivers of food and nutrition security:," IFPRI discussion papers 1531, International Food Policy Research Institute (IFPRI).
    4. Yu, T. Edward & Tokgoz, Simla & Wailes, Eric & Chavez, Eddie C., 2017. "A quantitative analysis of trade policy responses to higher world agricultural commodity prices:," IFPRI book chapters,in: Agriculture, development, and the global trading system: 2000– 2015, chapter 11 International Food Policy Research Institute (IFPRI).
    5. Lee, Youngjae & Kennedy, Lynn, 2016. "Analyzing Collective Trade Policy Actions in Response to Cyclical Risk in Agricultural Production: The Case of International Wheat," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235430, Agricultural and Applied Economics Association.
    6. Estrades, Carmen, 2015. "The Role of Export Restrictions in Agriculture Trade," Proceedings Issues, 2014: Trade and Societal Well-Being, December 13-15, 2015, Clearwater Beach, Florida 229229, International Agricultural Trade Research Consortium.
    7. Wailes, Eric J. & Chavez, Eddie C., 2011. "World Rice Outlook International Rice Baseline Projections, 2011-2020," Staff Papers 112998, University of Arkansas, Department of Agricultural Economics and Agribusiness.
    8. Brockhaus, Jan & Kalkuhl, Matthias & Kozicka, Marta, 2016. "What Drives India’s Rice Stocks? Empirical Evidence," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235659, Agricultural and Applied Economics Association.
    9. Djuric, Ivan & Götz, Linde, 2016. "Export restrictions – Do consumers really benefit? The wheat-to-bread supply chain in Serbia," Food Policy, Elsevier, vol. 63(C), pages 112-123.
    10. Liefert, William M. & Westcott, Paul C., 2016. "Modifying agricultural export taxes to make them less market-distorting," Food Policy, Elsevier, vol. 62(C), pages 65-77.
    11. Rude, James & An, Henry, 2015. "Explaining grain and oilseed price volatility: The role of export restrictions," Food Policy, Elsevier, vol. 57(C), pages 83-92.
    12. Götz, Linde & Glauben, Thomas & Brümmer, Bernhard, 2013. "Wheat export restrictions and domestic market effects in Russia and Ukraine during the food crisis," Food Policy, Elsevier, vol. 38(C), pages 214-226.
    13. 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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