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Agricultural supply response to international food prices and price volatility: a crosscountry panel analysis

  • Haile, Mekbib G.
  • Kalkuhl, Matthias

This article estimates global supply response for key agricultural commodities. The findings reveal that, while higher output prices are incentives to improve global crop supply, output price volatility plays otherwise. Depending on respective crop, the results indicate that own price supply elasticities range from about 0.05 to 0.35. The findings suggest that output price-risk has negative correlations with crop supply, implying that farmers shift land, other inputs and yield improving investments away to crops with less volatile prices. The recent output price volatility seems to significantly reduce production of wheat and – to a lesser extent – rice.

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File URL: http://purl.umn.edu/149630
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Paper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 149630.

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Date of creation: 2013
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Handle: RePEc:ags:aaea13:149630
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