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Modeling the Welfare Impacts of Agricultural Policies in Developing Countries

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  • Jonasson, Erik
  • Filipski, Mateusz
  • Brooks, Jonathan
  • Taylor, J. Edward

Abstract

This paper presents a new model which incorporates features of developing country agriculture that may be critical in shaping the welfare outcomes of alternative agricultural policies. The model features heterogeneous households linked through markets in a rural economy-wide structure, with endogenous market participation for farmers facing transactions costs. The model is used for policy simulations, including market price support, production subsidies, input subsidies, transaction cost removal, and unconditional cash transfers. Applications for six countries highlight the diversity of potential impacts of such policies. The simulation results suggest that there are circumstances under which some market interventions, such as input subsidies, may be only slightly less efficient at transferring incomes than direct payments.

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  • Jonasson, Erik & Filipski, Mateusz & Brooks, Jonathan & Taylor, J. Edward, 2012. "Modeling the Welfare Impacts of Agricultural Policies in Developing Countries," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125105, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae12:125105
    DOI: 10.22004/ag.econ.125105
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    2. Camara, Alhassane & Savard, Luc, 2023. "Impact of agricultural input subsidy policy on market participation and income distribution in Africa: A bottom-up/top-down approach," Economic Modelling, Elsevier, vol. 129(C).
    3. Charles Peter Mgeni & Klaus Müller & Stefan Sieber, 2019. "Reducing Edible Oil Import Dependency in Tanzania: A Computable General Equilibrium CGE Approach," Sustainability, MDPI, vol. 11(16), pages 1-17, August.
    4. Boureima Sawadogo, 2024. "Can Burkina Faso’s Agricultural Mechanization Program Reduce Poverty in the Country," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 36(4), pages 1016-1036, August.
    5. Heng Zhu & Anubhab Gupta & Mateusz Filipski & Jaakko Valli & Ernesto Gonzalez‐Estrada & J. Edward Taylor, 2024. "Economic impact of giving land to refugees," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(1), pages 226-251, January.
    6. van Ruijven, Bas J. & O’Neill, Brian C. & Chateau, Jean, 2015. "Methods for including income distribution in global CGE models for long-term climate change research," Energy Economics, Elsevier, vol. 51(C), pages 530-543.
    7. Liu, Jing Jing & Salleh, Norlida Hanim Mohd & Nor, Nor Ghani Md, 2024. "The economy-wide impact of cooking oil subsidy reforms and compensation to the oil palm industry," Journal of Policy Modeling, Elsevier, vol. 46(6), pages 1228-1242.
    8. Jonathan Brooks & Alan Matthews, 2015. "Trade Dimensions of Food Security," OECD Food, Agriculture and Fisheries Papers 77, OECD Publishing.
    9. von Arnim, Rudiger & Tröster, Bernhard & Staritz, Cornelia & Raza, Werner, 2018. "Commodity price shocks and the distribution of income in commodity-dependent least-developed countries," Journal of Policy Modeling, Elsevier, vol. 40(2), pages 434-451.
    10. Anubhab Gupta & Justin Kagin & J Edward Taylor & Mateusz Filipski & Lindi Hlanze & James Foster, 2018. "Is technology change good for cotton farmers? A local-economy analysis from the Tanzania Lake Zone," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(1), pages 27-56.

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    More about this item

    Keywords

    Agricultural and Food Policy; Consumer/Household Economics;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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