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Rules versus Discretion in Food Storage Policies
[Règles contre discrétion dans les politiques de stockage de produits alimentaires]

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  • Christophe C. Gouel

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - INA P-G - Institut National Agronomique Paris-Grignon, IFPRI - International Food Policy Research Institute [Washington] - CGIAR - Consultative Group on International Agricultural Research [CGIAR])

Abstract

This article compares different policies in a rational expectations storage model with risk-averse consumers and missing insurance markets calibrated to represent a developing country. We consider an optimal storage policy under discretion and two optimal simple rules, a constant private storage subsidy and a price-band. The storage subsidy achieves welfare gains similar to the discretionary policy. The price-band maximizing social welfare is a price-peg scheme: the floor and ceiling prices are the same, and the capacity constraint represents 11% of the steady-state production level. It achieves three-quarters of the gains from the optimal policy under discretion.

Suggested Citation

  • Christophe C. Gouel, 2013. "Rules versus Discretion in Food Storage Policies [Règles contre discrétion dans les politiques de stockage de produits alimentaires]," Post-Print hal-01636279, HAL.
  • Handle: RePEc:hal:journl:hal-01636279
    DOI: 10.1093/ajae/aat016
    Note: View the original document on HAL open archive server: https://hal.science/hal-01636279
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    Cited by:

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    2. Elleby, Christian, 2014. "Poverty and Price Transmission," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182722, European Association of Agricultural Economists.
    3. Chavas, Jean-Paul & Li, Jian, 2017. "The Effects of Private Stocks versus Public Stocks on Food Price Volatility," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259185, Agricultural and Applied Economics Association.
    4. Emerta A. Aragie & Jean Balié, 2024. "The effect of price support policies under productivity shocks: evidence from an economywide model," International Economics and Economic Policy, Springer, vol. 21(1), pages 1-26, February.
    5. Matthias Kalkuhl & Lukas Kornher & Matthias Kalkuhl & Irfan Mujahid, 2015. "Food price volatility in developing countries – the role of trade and storage," EcoMod2015 8415, EcoMod.
    6. Jean‐Paul Chavas & Jian Li, 2020. "A quantile autoregression analysis of price volatility in agricultural markets," Agricultural Economics, International Association of Agricultural Economists, vol. 51(2), pages 273-289, March.
    7. Christophe Gouel, 2014. "Food Price Volatility and Domestic Stabilization Policies in Developing Countries," NBER Chapters, in: The Economics of Food Price Volatility, pages 261-306, National Bureau of Economic Research, Inc.
    8. Oglend, Atle & Kleppe, Tore Selland, 2017. "On the behavior of commodity prices when speculative storage is bounded," Journal of Economic Dynamics and Control, Elsevier, vol. 75(C), pages 52-69.
    9. Christophe Gouel & Madhur Gautam & Will J. Martin, 2016. "Managing food price volatility in a large open country: the case of wheat in India," Oxford Economic Papers, Oxford University Press, vol. 68(3), pages 811-835.
    10. Lukas Kornher & Matthias Kalkuhl, 2015. "A Typology for Price-related Food and Nutrition Risks and Policy Responses," FOODSECURE Technical papers 5, LEI Wageningen UR.
    11. Kennedy P. Lynn & Schmitz Andrew & van Kooten G. Cornelis, 2020. "The Role of Storage and Trade in Food Security," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 18(1), pages 1-13, January.

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