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The Influence of Domestic Pricing Policies and Buffer Stocks on Price Stability in the World Wheat Industry

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  • A. C. Zwart
  • K. D. Meilke

Abstract

Domestic pricing policies are a major cause of instability in international commodity markets. The modification of such policies could be a viable alternative to buffer stocks in providing stability. A theoretical model of price intervention is developed to show how common forms of intervention destabilize the world market price. A stochastic econometric model is used to show, first, that most countries in the world wheat market have policies which destabilize the wheat market, and, second, that the modification of such policies would prove as effective as a buffer stock policy in stabilizing the wheat market.

Suggested Citation

  • A. C. Zwart & K. D. Meilke, 1979. "The Influence of Domestic Pricing Policies and Buffer Stocks on Price Stability in the World Wheat Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(3), pages 434-447.
    • Handle: RePEc:oup:ajagec:v:61:y:1979:i:3:p:434-447.
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    Citations

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    Cited by:

    1. Jason H. Grant & Karl D. Meilke, 2006. "The World Trade Organization Special Safeguard Mechanism: A Case Study of Wheat," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(1), pages 24-47.
    2. Grant MScobie & Alberto Valdés, 1982. "Modelación de Política Gubernamental: El Caso de las Importaciones de Alimentos, Políticas de Precios y la Balanza de Pagos en Egipto," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 19(58), pages 325-356.
    3. Yeh, Chung J., 1980. "Market Demand For Residual Stocks And Price Variability: A Case Study Of U.S. Wheat," 1980 Annual Meeting, July 27-30, Urbana-Champaign, Illinois 279238, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Just, Richard E., 1989. "Modelling the Interactive Effect of Alternative Sets of Policies on Agricultural Prices," Working Papers 197611, University of Maryland, Department of Agricultural and Resource Economics.
    5. Mahama, Ramatu, 1985. "A stochastic simulation of the impact of price insulation policies on world wheat market stability," ISU General Staff Papers 198501010800008868, Iowa State University, Department of Economics.
    6. Van Kooten, G. C. & Spriggs, John & Schmitz, Andrew, 1989. "The Impact of Canadian Commodity Stabilization Programs on Risk Reduction and the Supply of Agricultural Commodities," Working Papers 244037, Agriculture and Agri-Food Canada.
    7. Mahama, Ramatu & Meyers, William H., 1987. "World Wheat Market Instability: An Analysis of EC Price Insulation Effects," 1987 Occasional Paper Series No. 4 197431, International Association of Agricultural Economists.
    8. Rose, Roger, 1987. "A perspective on recent developments in the world wheat market," Agricultural Outlook Forum Archive 1923 - 1997 326419, United States Department of Agriculture, Agricultural Outlook Forum.
    9. Rauseer, Gordon C. & Zilberman, David & Just, Richard E., 1981. "The Distributional Impacts of Agricultural Programs," AAEA Miscellaneous Paper Archive 337331, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Abbott, Philip C. & Paarlberg, Philip L., 1998. "Tariff rate quotas: structural and stability impacts in growing markets," Agricultural Economics, Blackwell, vol. 19(3), pages 257-267, December.
    11. Chase Wilde, Linda & Cornell, Laurence D. & Sorenson, Vernon L. & Black, J. Roy, 1986. "World Grain Trade: An Evaluation of Factors Affecting Net Import Demand for Wheat and Coarse Grains by Selected Countries," Agricultural Economic Report Series 201358, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    12. Grant, Jason H. & Meilke, Karl D., 2004. "Import Safeguards: Protectionist Measures Or A Liberalization Strategy?," 2004 Annual meeting, August 1-4, Denver, CO 20236, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Sturgiss, Robert & Wong, Gordon & Borrell, Brent, 1987. "Policy Intervention, Price Variability and the International Sugar Agreement: An Econometric Model of the World Sugar Market," Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Archive 316157, Australian Government, Australian Bureau of Agricultural and Resource Economics and Sciences.
    14. Longmire, James L. & Morey, Art, 1983. "Strong Dollar Dampens Demand for U.S. Farm Exports," Foreign Agricultural Economic Report (FAER) 147219, United States Department of Agriculture, Economic Research Service.
    15. Wenting Wang & Longbao Wei, 2021. "Impacts of agricultural price support policy on price variability and welfare: Evidence from China's soybean market," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 3-17, January.
    16. Unknown, 1987. "Japanese agricultural policies: an overview," Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Archive 316179, Australian Government, Australian Bureau of Agricultural and Resource Economics and Sciences.
    17. Wang, Wenting & Wei, Longbao, 2019. "Impacts of agricultural price support policies on price variability and welfare: evidence from China’s soybean market," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 288334, Agricultural and Applied Economics Association.

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