IDEAS home Printed from https://ideas.repec.org/p/ags/iaae97/197032.html

Diversification and International Trade

Author

Listed:
  • McCalla, Alex F.
  • Valdes, Alberto

Abstract

We have struggled mightily with trying to understand the deeper meaning of our assigned title. What are the critical issues linking diversification of agriculture and international trade? Are they competitive, or even antagonistic, concepts in the broader context of food security and agricultural development? Are they complementary and synergistic and, if so, how? Or are they two ships passing in the night which have little if any linkage? We share our problem in searching for a conceptual framework for the paper with you because we are still not sure we have got it right. We begin with a stylized review of conventional wisdom regarding diversification as a desirable strategy for agricultural development. We then note that much of the agricultural development literature assumes, implicitly or explicitly, a closed or at least closely managed economy. We then ask the question, what happens if you open the economy? Here we use a simple three-good trade model to explore the consequences for the agricultural sector of an open economy setting. We look at the effects on production, consumption and trade as well as the implications for price and income variability and overall economic performance. We then return to the two supposed advantages of a policy of diversification - expanded sources of growth and employment and use as a risk management tool - and ask a basic question: in a world of economy-wide reforms, including trade liberalization, deregulation and privatization, is agricultural diversification a relevant policy objective? To anticipate our answer, we conclude that diversification as a policy goal is not relevant. Those of you who came only for the bottom line can now leave; those who want to know why are invited to stay!

Suggested Citation

  • McCalla, Alex F. & Valdes, Alberto, 1997. "Diversification and International Trade," 1997 Conference, August 10-16, 1997, Sacramento, California 197032, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae97:197032
    DOI: 10.22004/ag.econ.197032
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/197032/files/agecon-023conf-1997-007_1_.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.197032?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Brainard, William C. & Cooper, Richard N., 1968. "Uncertainty and Diversification in International Trade," Food Research Institute Studies, Stanford University, Food Research Institute, vol. 8(3), pages 1-29.
    2. Valdes, A, 1996. "Surveillance of Agricultural Price and Trade Policy in Latin America during Major Policy Reform," World Bank - Discussion Papers 349, World Bank.
    3. Mundlak, Yair & Larson, Donald F, 1992. "On the Transmission of World Agricultural Prices," The World Bank Economic Review, World Bank, vol. 6(3), pages 399-422, September.
    4. Corden, W. Max., 1997. "Trade Policy and Economic Welfare," OUP Catalogue, Oxford University Press, edition 2, number 9780198775348.
    5. Delgado, Christopher L., 1995. "Agricultural diversification and export promotion in sub-Saharan Africa," Food Policy, Elsevier, vol. 20(3), pages 225-243, June.
    6. Pingali, Prabhu L. & Rosegrant, Mark W., 1995. "Agricultural commercialization and diversification: processes and policies," Food Policy, Elsevier, vol. 20(3), pages 171-185, June.
    7. Quiroz, Jorge A. & Valdes, Alberto, 1995. "Agricultural diversification and policy reform," Food Policy, Elsevier, vol. 20(3), pages 245-255, June.
    8. Gerald E. Shively, 1996. "Food Price Variability and Economic Reform: An ARCH Approach for Ghana," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 126-136.
    9. Cathy L. Jabara & Robert L. Thompson, 1980. "Agricultural Comparative Advantage under International Price Uncertainty: The Case of Senegal," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(2), pages 188-198.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kodjo Adandohoin & Jean-Francois Brun, 2021. "The Role of Income and Property Taxes in Tax Transition and the Mediating Effect of Financial Development," Post-Print hal-03470540, HAL.
    2. Kodjo Adandohoin & Jean-Francois Brun, 2020. "Are incomes and property taxes effective instruments for tax transition?," Working Papers hal-03053683, HAL.
    3. Kinnucan, Henry W. & Xiao, Hui & Yu, Shixue, 2000. "Relative Effectiveness Of Usda'S Nonprice Export Promotion Instruments," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-19, December.
    4. Kodjo Adandohoin & Jean-Francois Brun, 2020. "Are incomes and property taxes effective instruments for tax transition?," CERDI Working papers hal-03053683, HAL.
    5. Aboah, Joshua & Setsoafia, Edinam Dope, 2022. "Examining the synergistic effect of cocoa-plantain intercropping system on gross margin: A system dynamics modelling approach," Agricultural Systems, Elsevier, vol. 195(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Anderson, Kym & Kurzweil, Marianne & Martin, William J. & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Methodology for Measuring Distortions to Agricultural Incentives," Agricultural Distortions Working Paper Series 48326, World Bank.
    2. Delgado, Christopher L. & Siamwalla, Ammar, 1997. "Rural Economy and Farm Income Diversification in Developing Countries," 1997 Conference, August 10-16, 1997, Sacramento, California 197035, International Association of Agricultural Economists.
    3. Pingali, Prabhu L. & Rosegrant, Mark W., 1995. "Agricultural commercialization and diversification: processes and policies," Food Policy, Elsevier, vol. 20(3), pages 171-185, June.
    4. Bravo-Ureta, Boris E. & Cocchi, Horacio & Solís, Daniel, 2006. "Output Diversification among Small-Scale Hillside Farmers in El Salvador," IDB Publications (Working Papers) 3012, Inter-American Development Bank.
    5. Delgado, Christopher L. & Siamwalla, Ammar, 1997. "Rural economy and farm income diversification in developing countries," MTID discussion papers 20, International Food Policy Research Institute (IFPRI).
    6. Kym Anderson & Signe Nelgen, 2012. "Agricultural trade distortions during the global financial crisis," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(2), pages 235-260, SUMMER.
    7. Anh, Tran Thi Tram & Epprecht, Michael & Minot, Nicholas & Trung, Le Quang, 2006. "Income diversification and poverty in the Northern Uplands of Vietnam," Research reports 145, International Food Policy Research Institute (IFPRI).
    8. Rao, P. Parthasarathy & Birthal, Pratap Singh & Joshi, Pramod Kumar & Kar, D., 2004. "Agricultural diversification in India and role of urbanization," MTID discussion papers 77, International Food Policy Research Institute (IFPRI).
    9. Shively, Gerald E., 2001. "Price thresholds, price volatility, and the private costs of investment in a developing country grain market," Economic Modelling, Elsevier, vol. 18(3), pages 399-414, August.
    10. Ecker, Olivier & Hatzenbuehler, Patrick L. & Mahrt, Kristi, 2018. "Transforming agriculture for improving food and nutrition security among Nigerian farm households," NSSP working papers 56, International Food Policy Research Institute (IFPRI).
    11. Kym Anderson, 2005. "On the Virtues of Multilateral Trade Negotiations," The Economic Record, The Economic Society of Australia, vol. 81(255), pages 414-438, December.
    12. Mathieu Juliot Mpabe Bodjongo, 2022. "Climate Change, Cotton Prices and Production in Cameroon," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(1), pages 22-50, February.
    13. Peter B. Dixon & Maureen T. Rimmer, 2010. "Optimal Tariffs: Should Australia Cut Automotive Tariffs Unilaterally?," The Economic Record, The Economic Society of Australia, vol. 86(273), pages 143-161, June.
    14. Diao, Xinshen & Dorosh, Paul A. & Rahman, Shaikh Mahfuzur, 2007. "Market opportunities for African agriculture: A General Equilibrium examination of demand-side constraints on agricultural growth in East and Southern Africa," Research reports 154, International Food Policy Research Institute (IFPRI).
    15. Félix BADOLO, 2011. "Transmission des chocs de prix internationaux : le cas du riz au Burkina Faso," Working Papers 201129, CERDI.
    16. Gebremedhin, Berhanu & Hoekstra, Dirk, 2008. "Cereal Marketing and Household Market Participation in Ethiopia: The Case of Teff, Wheat and Rice," 2007 Second International Conference, August 20-22, 2007, Accra, Ghana 52102, African Association of Agricultural Economists (AAAE).
    17. Enrique Ospina G., 1998. "Importaciones Agropecuarias: A Que Responden?," Borradores de Economia 2817, Banco de la Republica.
    18. Hazell, Peter B.R., 1988. "Risk, Market Failure and Agricultural Policy," Regional Research Projects > 1988: S-180 Annual Meeting, March 20-23, 1988, Savannah, Georgia 272777, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    19. Romeo M. Bautista & Sherman Robinson & Finn Tarp & Peter Wobst, 2001. "Policy Bias and Agriculture: Partial and General Equilibrium Measures," Review of Development Economics, Wiley Blackwell, vol. 5(1), pages 89-104, February.
    20. Kym Anderson, 2006. "Reducing Distortions to Agricultural Incentives: Progress, Pitfalls, and Prospects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(5), pages 1135-1146.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae97:197032. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.