Potential Market Effects of Selected Policy Options in Emerging Economies to Address Future Commodity Price Surges
This report examines the market outcomes of different policy options that could be adopted in the event of a future spike in the world price of wheat and rice. The three policies – additional border measures, consumer subsidies or public stocks – only partly mitigate the effect of a price spike on consumers in the implementing countries. However, taxpayer costs can be large, particularly for broad consumer subsidies or to build and carry grain stocks. Trade measures reduce domestic prices to producers, suppressing long-run supply response. There are also negative unintended consequences for international markets and market participants in other countries that trade on these markets. New consumer subsidies or trade measures introduced by some countries to offset rising international grain prices causes those prices to rise even more in other countries. Releasing public stocks eases tight markets and lowers prices in all markets, helping to reduce the price spike, but stock building and rebuilding phases mean higher market prices and less food consumption at other times. In conclusion, none of these policies is an unambiguous solution that sustains food consumption during times of high prices with minimal taxpayer and other costs.
|Date of creation:||14 Oct 2010|
|Date of revision:|
|Contact details of provider:|| Postal: 2 rue Andre Pascal, 75775 Paris Cedex 16|
Phone: 33-(0)-1-45 24 82 00
Fax: 33-(0)-1-45 24 85 00
Web page: http://www.oecd.org
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:oec:agraaa:35-en. 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 you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.