Grain marketing parastatals in Asia
Using case studies from six Asian countries, this paper (a) assesses the relevance of underlying rationales for public intervention in foodgrain markets, (b) documents the existing policies and regulations that support operation of grain parastatals, (c) provides estimates of benefits and costs of parastatals, and (d) compares experiences of countries that liberalized (or reduced intervention) with the ones that continue to have significant presence of parastatals. Our results suggest that conditions in the region have improved significantly over the past thirty years; and none of the four commonly agreed rationales—that is, poorly integrated domestic markets, thin and volatile world market, promoting modern technology and the scarcity of foreign exchange reserves—for public intervention in foodgrain markets are now persuasive. Domestic foodgrain markets are integrated, international markets for both wheat and rice are significantly more robust than they were thirty years ago, High-Yielding Varieties (HYV) now cover practically all of the high potential area sown to wheat and rice; and foreign currency reserves have increased dramatically in all countries in recent years. However, although rationales have lost their significance, many countries continue to practice old policies and provide regulatory supports to parastatals, including monopoly control over international trade, preferential access to transportation, restrictions on movement of foodgrains, and cheap or interest-free credit. Relative to the private sector, the costs of the grain parastatals have been high and are increasing, as special interests and rent- seeking are increasingly dictating their operation. This is being manifested in various forms, such as excessive public stocks in India, vacillating import policies in Indonesia and Pakistan, questionable government foodgrain import decisions in the Philippines, and politically-determined ceiling and floor prices in India. On the other hand, the experiences of Bangladesh and Vietnam, both of which have implemented extensive reforms over the last fifteen years, suggest that reduced government intervention can promote competition in the domestic markets, reduce subsidies, and release funds for development and anti-poverty programs without jeopardizing price stability. The paper concludes that reforms are overdue and the delay in changing the old ways of doing price stabilization will be increasingly wasteful.
|Date of creation:||2005|
|Date of revision:|
|Contact details of provider:|| Postal: 2033 K Street, NW, Washington, DC 20006|
Web page: http://www.ifpri.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- C. Peter Timmer, 2004.
"The road to pro-poor growth: the Indonesian experience in regional perspective,"
Bulletin of Indonesian Economic Studies,
Taylor & Francis Journals, vol. 40(2), pages 177-207.
- Peter Timmer, 2004. "The Road to Pro-Poor Growth: The Indonesian Experience in Regional Perspective," Working Papers 38, Center for Global Development.
- del Ninno, Carlo & Dorosh, Paul A. & Smith, Lisa C. & Roy, Dilip K., 2001. "The 1998 floods in Bangladesh: disaster impacts, household coping strategies, and responses," Research reports 122, International Food Policy Research Institute (IFPRI).
- Param Silvapulle & Sisira Jayasuriya, 1994. "Testing For Philippines Rice Market Integration: A Multiple Cointegration Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(3), pages 369-380.
- Umali-Deininger, Dina L. & Deininger, Klaus W., 2001.
"Towards greater food security for India's poor: balancing government intervention and private competition,"
Agricultural Economics of Agricultural Economists,
International Association of Agricultural Economists, vol. 25(2-3), September.
- Umali-Deininger, Dina L. & Deininger, Klaus W., 2001. "Towards greater food security for India's poor: balancing government intervention and private competition," Agricultural Economics, Blackwell, vol. 25(2-3), pages 321-335, September.
- Bob Baulch, 1997. "Transfer Costs, Spatial Arbitrage, and Testing for Food Market Integration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 477-487.
- Islam, Nurul & Thomas, Saji, 1996. "Foodgrain price stabilization in developing countries," Food policy reviews 3, International Food Policy Research Institute (IFPRI).
- Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
- Nicholas Minot & Francesco Goletti, 1998. "Export Liberalization and Household Welfare: The Case of Rice in Vietnam," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 738-749.
- Ismet, Mohammad & Barkley, Andrew P. & Llewelyn, Richard V., 1998.
"Government intervention and market integration in Indonesian rice markets,"
Blackwell, vol. 19(3), pages 283-295, December.
- Ismet, Mohammad & Barkley, Andrew P. & Llewelyn, Richard V., 1998. "Government intervention and market integration in Indonesian rice markets," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 19(3), December.
- Ahmed, Akhter U. & Rashid, Shahidur & Sharma, Manohar & Zohir, Sajjad, 2004. "A study of food aid leakage in Bangladesh," FCND briefs 5, International Food Policy Research Institute (IFPRI).
- Maurice Schiff & Alberto Valdes, 1994. "The Plundering of Agriculture in Developing Countries," Reports _013, World Bank Latin America and the Caribean Region Department.
- Minot, Nicholas & Goletti, Francesco, 2000. "Rice market liberalization and poverty in Viet Nam:," Research reports 114, International Food Policy Research Institute (IFPRI).
- P. J. Dawson & P. K. Dey, 2002. "Testing for the law of one price: rice market integration in Bangladesh," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(4), pages 473-484.
- Jayne, Thomas S., 1993. "Sources and Effects of Instability in the World Rice Market," Food Security International Development Papers 54059, Michigan State University, Department of Agricultural, Food, and Resource Economics.
When requesting a correction, please mention this item's handle: RePEc:fpr:mtiddp:80. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.