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Analyzing Market Price Transmission, Government Intervention and Weather Shocks for Rice Market in the Philippines

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  • Jolejole-Foreman, Maria Christina
  • Mallory, Mindy L.

Abstract

In the Philippines, where rice is considered the most important food crop, attempts to influence rice prices have been prevalent. The government, through National Food Authority (NFA) has sought to establish stocks and control imports to stabilize prices since its establishment in 1972 to support farm gate prices and reduce retail price of rice. But data shows divergence in retail prices and farm prices since mid 1960s. In this paper, we use vector autoregression (VAR) to analyze the movement of Philippine rice margins with government stocks and weather supply shocks to able to determine government effectiveness in actual times of market stress. Comparing VARs across regions, we are able to identify the regions in which price margins are significantly affected by government intervention measures.

Suggested Citation

  • Jolejole-Foreman, Maria Christina & Mallory, Mindy L., 2011. "Analyzing Market Price Transmission, Government Intervention and Weather Shocks for Rice Market in the Philippines," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103163, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea11:103163
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    References listed on IDEAS

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    12. David, Cristina C & Huang, Jikun, 1996. "Political Economy of Rice Price Protection in Asia," Economic Development and Cultural Change, University of Chicago Press, vol. 44(3), pages 463-483, April.
    13. Martinez, Elmer & Shively, Gerald E. & Masters, William J., 1998. "Testing The Link Between Public Intervention And Food Price Variability: Evidence From Rice Markets In The Philippines," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20883, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    More about this item

    Keywords

    Vector-auto-regression; Price-Margin; Rice; Philippines; Policy; Agricultural and Food Policy; Demand and Price Analysis; Q11; Q13; Q18;

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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