The impact of banning export of cereals in response to soaring food prices: Evidences from Ethiopia using the new GTAP African database
In the poorest countries like Ethiopia the spillover effects of a soaring food price is unbearable. To mitigate the recent rise in food prices and the burden on urban poor consumers, different measures have been considered by policy makers. Recently, Ethiopia banned the export of all grain products in a bid to stem huge price hikes. The export of indigenous grains, including the staple grains, like teff, maize, sorghum, and wheat are suspended indefinitely. Using the standard GTAP model and the recent GTAP Africa database, this paper simulates the overall implication of banning export of grains. Regarding the impact on prices, the simulation result tells us that prices are likely to fall. At macro level, the result reveals trade balance will not be decline following such actions. However, it has been shown that in terms of overall welfare the policy has a devastating impact as the country will likely to lose welfare equivalent of $ 148 million.
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- Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
- Ulimwengu, John M. & Workneh, Sindu & Paulos, Zelekawork, 2009. "Impact of soaring food price in Ethiopia: Does location matter?," IFPRI discussion papers 846, International Food Policy Research Institute (IFPRI).
- Villoria, Nelson, 2008. "Estimation of Missing Intra-African Trade," GTAP Research Memoranda 2915, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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