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Analyzing the Impact of Changes in Trade and Domestic Policies: The Case of the Soybean Complex

Author

Listed:
  • Costa, Rafael F.
  • Xia, Yan
  • Susanto, Dwi
  • Rosson, C. Parr, III
  • Adcock, Flynn J.

Abstract

This study analyzes the impacts of domestic and trade policy changes on the soybean complex using a Stochastic Equilibrium Displacement Model (SEDM). Three different policies, Loan Deficiency Payments (LDP), transportation costs and export taxes are considered in the analysis. The results indicate that Brazil benefits from a reduction in transportation costs and becomes more competitive in the global soybean market. Brazilian exports of soybeans increase due to relatively lower export prices. However, Brazil gains little improvement in the export competitiveness of the soybean joint products, soybean meal and oil. A lower U.S. LDP rate results in the loss of competitiveness for the United States in the world soybean market. Furthermore, the results show that an Argentine export tax reduction increases soybean exports from Argentina, but it reduces the global supply of soybean meal and soybean oil.

Suggested Citation

  • Costa, Rafael F. & Xia, Yan & Susanto, Dwi & Rosson, C. Parr, III & Adcock, Flynn J., 2008. "Analyzing the Impact of Changes in Trade and Domestic Policies: The Case of the Soybean Complex," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 45853, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saeana:45853
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    File URL: http://purl.umn.edu/45853
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    References listed on IDEAS

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    1. Sergio H. Lence, 2000. "Comparative Marketing Analysis of Major Agricultural Products in the United States and Argentina, A," Midwest Agribusiness Trade Research and Information Center (MATRIC) Publications 00-mrp2, Midwest Agribusiness Trade Research and Information Center (MATRIC) at Iowa State University.
    2. George C. Davis & Maria Cristina Espinoza, 1998. "A Unified Approach to Sensitivity Analysis in Equilibrium Displacement Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 868-879.
    3. Matin Qaim & Greg Traxler, 2005. "Roundup Ready soybeans in Argentina: farm level and aggregate welfare effects," Agricultural Economics, International Association of Agricultural Economists, vol. 32(1), pages 73-86, January.
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    Cited by:

    1. Antoine Bouët & Carmen Estrades & David Laborde, 2014. "Differential Export Taxes along the Oilseeds Value Chain: A Partial Equilibrium Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(3), pages 924-938.

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