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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
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  1. Anderson, Kym & Martin, William J., 2007. "Distortions to Agricultural Incentives in Asia," Agricultural Distortions Working Paper 48557, World Bank.
  2. Rodney Tyers, 1991. "On The Neglect Of Dynamics, Risk And Market Insulation In The Analysis Of Uruguay Round Food Trade Reforms," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 35(3), pages 295-313, December.
  3. Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
  4. 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.
  5. Tyers,Rod & Anderson,Kym, 2011. "Disarray in World Food Markets," Cambridge Books, Cambridge University Press, number 9780521172318.
  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. Caroline Freund & Caglar Ozden, 2008. "Trade Policy and Loss Aversion," American Economic Review, American Economic Association, vol. 98(4), pages 1675-91, September.
  8. Kym Anderson & John Cockburn & Will Martin, 2010. "Agricultural Price Distortions, Inequality, and Poverty," World Bank Publications, The World Bank, number 2430.
  9. Johanna Croser & Kym Anderson, 2010. "Changing Ccontributions of Different Agricultural Policy Instruments to Global Reductions in Trade and Welfare," Centre for International Economic Studies Working Papers 2010-05, University of Adelaide, Centre for International Economic Studies.
  10. 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.
  11. 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.
  12. Paul Collier & Frederick van der Ploeg & Michael Spence & Anthony J Venables, 2009. "Managing Resource Revenues in Developing Economies," OxCarre Working Papers 015, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  13. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
  14. Nerlove, Marc, 1972. "Lags in Economic Behavior," Econometrica, Econometric Society, vol. 40(2), pages 221-51, March.
  15. 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.
  16. Anderson,Kym (ed.), 2010. "The Political Economy of Agricultural Price Distortions," Cambridge Books, Cambridge University Press, number 9780521763233.
  17. Warr, Peter G., 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), December.
  18. 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).
  19. 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.
  20. repec:oup:restud:v:59:y:1992:i:1:p:1-23 is not listed on IDEAS
  21. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications, The World Bank, number 9436.
  22. 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.
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