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A Quantitative Analysis of Trade Policy Responses to High Agricultural Commodity Prices

Author

Listed:
  • Yu, Tun-Hsiang (Edward)
  • Tokgoz, Simla
  • Wailes, Eric J.
  • Chavez, Eddie C.

Abstract

In order to mitigate the food commodity price pressure on domestic markets in the 2007/08 marketing year, major exporting and importing countries, most of them developing economies, have adopted some trade policy changes such as imposing export bans (or raising restrictions) and reducing import tariffs. This paper evaluates the impact of those policies on the world price and trade of major agricultural commodities. We quantify the changes in prices, trade, production, and consumption by using a set of multi-country, multi-commodity, and partial-equilibrium models. Results show that most commodity prices increase when these trade policies are exercised. Rice price is distorted the most, followed by wheat and barley. The impact on the aggregate trade varies by commodities. Our analysis illustrates that the inefficient trade policies actually worsen the price inflation rather than solving the issue.

Suggested Citation

  • Yu, Tun-Hsiang (Edward) & Tokgoz, Simla & Wailes, Eric J. & Chavez, Eddie C., 2009. "A Quantitative Analysis of Trade Policy Responses to High Agricultural Commodity Prices," 2009 Conference, August 16-22, 2009, Beijing, China 51805, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:51805
    DOI: 10.22004/ag.econ.51805
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    References listed on IDEAS

    as
    1. Jacinto F. Fabiosa & John C. Beghin & Fengxia Dong & Amani Elobeid & Frank H. Fuller & Holger Matthey & Simla Tokgoz & Eric Wailes, 2005. "Impact of the European Enlargement and Common Agricultural Policy Reforms on Agricultural Markets: Much Ado about Nothing? The," Center for Agricultural and Rural Development (CARD) Publications 05-wp382, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Joe Dewbre & Céline Giner & Wyatt Thompson & Martin Von Lampe, 2008. "High food commodity prices: will they stay? who will pay?," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 393-403, November.
    3. Jay Fabiosa & John Beghin & Amani Elobeid & Holger Matthey & Alexander Saak & Stéphane de Cara & Cheng Fang & Murat Isik & Pat Westhoff & D. Scott Brown & Brian Willott & Daniel Madison & Seth Meyer &, 2005. "The Doha Round of the World Trade Organization and Agricultural Markets Liberalization: Impacts on Developing Economies," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(3), pages 317-335.
    4. Simla Tokgoz & Amani Elobeid & Jacinto Fabiosa & Dermot J. Hayes & Bruce A. Babcock & Tun-Hsiang (Edward) Yu & Fengxia Dong & Chad E. Hart, 2008. "Bottlenecks, Drought, and Oil Price Spikes: Impact on U.S. Ethanol and Agricultural Sectors," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(4), pages 604-622.
    5. Westhoff, Patrick C., 2008. "Farm Commodity Prices: Why the Boom and What Happens Now?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 23(2), pages 1-5.
    6. Beghin, John C. & Beghin, John C. & Dong, Fengxia & Elobeid, Amani & Fuller, Frank H. & Matthey, Holger & Tokgoz, Simla & Wailes, Eric J., 2005. "Impact of the European Enlargement and Cap Reforms on Agricultural Markets. Much Ado About Nothing? The," Staff General Research Papers Archive 12731, Iowa State University, Department of Economics.
    7. Pat Westhoff & D. Scott Brown & Brian Willott & Daniel Madison & Seth Meyer & John Kruse, 2005. "The Doha Round of the World Trade Organization and Agricultural Markets Liberalization: Impacts on Developing Economies," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(3), pages 317-335.
    8. Nouve, Kofi & Wodon, Quentin, 2008. "Impact of rising rice prices and policy responses in Mali : simulations with a dynamic CGE model," Policy Research Working Paper Series 4739, The World Bank.
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