Rice Reforms and Poverty in the Philippines: A CGE Analysis
The quantitative restriction (QR) on rice will last until the end of 2004. The paper employs a computable general equilibrium (CGE) model to analyze the possible poverty and distributional effects of the removal of QR and the reduction in tariff on rice imports. Policy experiments indicate that while market reforms in rice lead to a reduction in the overall headcount poverty index, both the poverty gap and the squared poverty gap indices increase. The Gini coefficient increases as well. In general, these results imply that the poorest of the poor are adversely affected. In particular, while market reforms in rice bring about a reduction in consumer prices that is favorable to all, imports of rice surge and generate displacement effects on poor households that rely heavily on agriculture for factor incomes, particularly on palay rice production and other related activities. Palay production and its output price decline. This translates to lower demand for factor inputs in the sector, lower factor prices in agriculture, and lower factor incomes for these households. Thus, poverty in these groups, as well as the general income inequality, deteriorates. However, the results of the experiments involving various poverty-offsetting measures indicate that an increase in direct government transfers to these household groups can provide a better safety net.
|Date of creation:||2004|
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References listed on IDEAS
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- Lofgren, Hans & Robinson, Sherman, 1997.
"The mixed-complementary approach to specifying agricultural supply in computable general equilibrium models:,"
TMD discussion papers
20, International Food Policy Research Institute (IFPRI).
- Löfgren, Hans & Robinson, Sherman, 1997. "The Mixed-Complementarity Approach to Specifying Agricultural Supply in Computable General Equilibrium Models," 1997 Conference, August 10-16, 1997, Sacramento, California 197058, International Association of Agricultural Economists.
- Robinson, Sherman & El-Said, Moataz & San, Nu Nu & Suryana, Achmad & Swastika, Dewa & Bahri, Sjaiful, 1997. "Rice price policies in Indonesia: a computable general equilibrium (CGE) analysis," TMD discussion papers 19, International Food Policy Research Institute (IFPRI). Full references (including those not matched with items on IDEAS)
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