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Food Trade, Biodiversity Effects and Price Volatility

Author

Listed:
  • Cecilia Bellora

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

  • Jean-Marc Bourgeon

    () (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique)

Abstract

Biotic factors such as pests create biodiversity effects that increase food production risks and decrease productivity when agriculture specializes. Under free trade, they reduce the specialization in food production that otherwise prevails in a Ricardian two-country setup. Pesticides allow farmers to reduce biodiversity effects , but they are damaging for the environment and for human health. When regulating farming practices under free trade, governments face a trade-off: they are tempted to restrict the use of pesticides compared to under autarky because domestic consumption partly relies on imports and thus depends less on them, but they also want to preserve the competitiveness of their agricultural sector on international markets. Contrary to the environmental race-to-the-bottom tenet, we show that at the symmetric equilibrium under free trade restrictions on pesticides are generally more stringent than under autarky. As a result, trade increases the price volatility of crops produced by both countries, and, depending on the intensity of the biodiversity effects, of some or all of the crops that are country-specific.

Suggested Citation

  • Cecilia Bellora & Jean-Marc Bourgeon, 2017. "Food Trade, Biodiversity Effects and Price Volatility," Working Papers hal-01669332, HAL.
  • Handle: RePEc:hal:wpaper:hal-01669332
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01669332
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    References listed on IDEAS

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    1. repec:nbr:nberch:13942 is not listed on IDEAS
    2. Cecilia Bellora & Élodie Blanc & Jean-Marc Bourgeon & Eric Strobl, 2018. "Estimating the Impact of Crop Diversity on Agricultural Productivity in South Africa," NBER Chapters,in: Agricultural Productivity and Producer Behavior National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    food prices; agricultural trade; agrobiodiversity; pesticides;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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