Groundnut Trade Liberalization: A South-South Debate?
We use a new partial-equilibrium, multi-market international model to analyze trade and agricultural policies affecting markets for peanut/groundnut products. The model covers four goods in thirteen countries/regions, including a large set of developing countries. Welfare is evaluated by looking at consumers' equivalent variation, quasi-profits in farming, quasi-profits in crushing, and taxpayers' revenues and outlays implied by distortions. We calibrate the model on recent historical data and current policy information. We analyze several groundnut trade liberalization scenarios in deviation from the recent historical baseline. Trade liberalization in groundnut markets has a strong South-South dimension, opposing India and, to a lesser extent, China to smaller developing countries mainly located in Africa. In the former, current policies, exacerbated by their market size, depress the world prices of groundnut products. Under free trade, African exporters present in these world markets would gain because they are net sellers of groundnut products. In India, consumers would be better off, with lower consumer prices resulting from the removal of prohibitive tariffs and large imports of groundnut products. The cost of the adjustment would fall on Indian farmers and crushers. In China, crush margins would improve because of the large terms-of-trade effects in the oil market relative to the seed market. China's groundnut product exports would expand dramatically. Net buyers of groundnut products in OECD (Organisation of Economic Co-operation and Development) countries would be worse off. We draw implications for Doha negotiations.
|Date of creation:||Nov 2003|
|Contact details of provider:|| Postal: 578 Heady Hall, Ames, IA 50011-1070|
Web page: http://www.fapri.iastate.edu/
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.:
- John Beghin & Jean-Christophe Bureau & Sophie Drogue, 2004. "Calibration of incomplete demand systems in quantitative analysis," Applied Economics, Taylor & Francis Journals, vol. 36(8), pages 839-847.
When requesting a correction, please mention this item's handle: RePEc:ias:fpaper:03-wp347. 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.