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Trade Barrier Volatility and Agricultural Price Stabilization

  • Anderson, Kym
  • Nelgen, Signe

National barriers to agricultural trade are often varied to insulate domestic markets from international price variability, especially following a sudden spike. This paper examines the extent of that behavior by governments using new annual estimates of agricultural price distortions in 75 countries. Responses to price spikes are shown to be equally substantial for agricultural-importing and agricultural-exporting countries, thereby weakening the domestic price-stabilizing effect of their interventions. Bringing discipline to export restrictions through new World Trade Organization rules could help alleviate the extent to which government responses to exogenous upward price spikes exacerbate those shocks.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 1 ()
Pages: 36-48

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:1:p:36-48
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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  1. Kym Anderson & John Cockburn & Will Martin, 2010. "Agricultural Price Distortions, Inequality, and Poverty," World Bank Publications, The World Bank, number 2430.
  2. Minot, Nicholas, 2011. "Transmission of world food price changes to markets in Sub-Saharan Africa:," IFPRI discussion papers 1059, International Food Policy Research Institute (IFPRI).
  3. Thomas W. Hertel & Will Martin & Amanda M. Leister, 2010. "Potential Implications of a Special Safeguard Mechanism in the World Trade Organization: the Case of Wheat," World Bank Economic Review, World Bank Group, vol. 24(2), pages 330-359, August.
  4. Nerlove, Marc, 1972. "Lags in Economic Behavior," Econometrica, Econometric Society, vol. 40(2), pages 221-51, March.
  5. Deaton, A. & Laroque, G., 1989. "On The Behavior Of Commodity Prices," Papers 145, Princeton, Woodrow Wilson School - Public and International Affairs.
  6. Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Measuring distortions to agricultural incentives, revisited," World Trade Review, Cambridge University Press, vol. 7(04), pages 675-704, October.
  7. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications, The World Bank, number 9436.
  8. Paul Collier & Rick Van Der Ploeg & Michael Spence & Anthony J Venables, 2010. "Managing Resource Revenues in Developing Economies," IMF Staff Papers, Palgrave Macmillan, vol. 57(1), pages 84-118, April.
  9. repec:cup:cbooks:9780521351058 is not listed on IDEAS
  10. Peter Warr, 2005. "Food policy and poverty in Indonesia: a general equilibrium analysis ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(4), pages 429-451, December.
  11. Tovar, Patricia, 2009. "The effects of loss aversion on trade policy: Theory and evidence," Journal of International Economics, Elsevier, vol. 78(1), pages 154-167, June.
  12. Croser, Johanna L. & Anderson, Kym, 2010. "Changing contributions of different agricultural policy instruments to global reductions in trade and welfare," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 58881, Australian Agricultural and Resource Economics Society.
  13. Tyers, Rodney, 1991. "On The Neglect Of Dynamics, Risk And Market Insulation In The Analysis Of Uruguay Round Food Trade Reforms," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 35(03), December.
  14. Skoufias, Emmanuel & Tiwari, Sailesh & Zaman, Hassan, 2011. "Can we rely on cash transfers to protect dietary diversity during food crises ? estimates from Indonesia," Policy Research Working Paper Series 5548, The World Bank.
  15. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
  16. Anderson, Kym & Martin, Will, 2011. "Export Restrictions and Price Insulation During Commodity Price Booms," CEPR Discussion Papers 8494, C.E.P.R. Discussion Papers.
  17. Frederick van der Ploeg & Anthony J. Venables, 2011. "Harnessing Windfall Revenues: Optimal Policies for Resourceā€Rich Developing Economies," Economic Journal, Royal Economic Society, vol. 121(551), pages 1-30, March.
  18. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications, The World Bank, number 2611.
  19. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597.
  20. Byerlee, Derek & Jayne, T.S. & Myers, Robert J., 2006. "Managing food price risks and instability in a liberalizing market environment: Overview and policy options," Food Policy, Elsevier, vol. 31(4), pages 275-287, August.
  21. Caroline Freund & Caglar Ozden, 2008. "Trade Policy and Loss Aversion," American Economic Review, American Economic Association, vol. 98(4), pages 1675-91, September.
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