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Sit down at the ball game: how trade barriers make the world less food secure

Author

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  • Rutten, Martine M.
  • Chant, Lindsay J.
  • Meijerink, Gerdien W.

Abstract

This paper analyses the impacts of trade policy responses to rising world food prices by carrying out a series of stylised experiments in the wheat market using a world trade model, GTAP. The sequence of events that is modelled comprises a negative wheat supply shock and subsequent implementation of an export tax by a major net exporter and a reduction in import tariffs by a small importer. The effects of trade policy responses are contrasted with those of full liberalisation of the wheat market. At the core are the (opposite) effects on producers and consumers, as well as the terms-of-trade and trade tax revenue effects. Food security is shown to depend crucially on changes in prices but also in incomes that are associated with changes in factor returns. The results reveal that major net exporters are generally better off when implementing export taxes for food security purposes. Large exporting countries export price instability causing world food prices to rise further. Net importing countries lose out and have limited leeway to reduce tariffs or subsidise imports. Liberalising wheat trade mitigates rising prices and contributes to food security, but to the detriment of production in Africa and Asia, making them more dependent on and vulnerable to changes in the world market. Concerted action at the WTO forum is required, notably clarifying and sharpening the rules regarding export measures.

Suggested Citation

  • Rutten, Martine M. & Chant, Lindsay J. & Meijerink, Gerdien W., 2011. "Sit down at the ball game: how trade barriers make the world less food secure," MPRA Paper 30354, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:30354
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    References listed on IDEAS

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    1. Keeney, Roman & Thomas Hertel, 2005. "GTAP-AGR : A Framework for Assessing the Implications of Multilateral Changes in Agricultural Policies," GTAP Technical Papers 1869, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
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    5. Bouet, Antoine & Laborde Debucquet, David, 2010. "Economics of export taxation in a context of food crisis," IFPRI discussion papers 994, International Food Policy Research Institute (IFPRI).
    6. Pyakuryal, Bishwambher & Roy, Devesh & Thapa, Y.B., 2010. "Trade liberalization and food security in Nepal," Food Policy, Elsevier, vol. 35(1), pages 20-31, February.
    7. Jeonghoi Kim, 2010. "Recent Trends in Export Restrictions," OECD Trade Policy Papers 101, OECD Publishing.
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    Cited by:

    1. Hannah Pieters & Andrea Guariso & Anneleen Vandeplas, 2013. "Conceptual framework for the analysis of the determinants of food and nutrition security," FOODSECURE Working papers 13, LEI Wageningen UR.
    2. Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci & Luca Salvatici, 2014. "Agricultural Trade Policies and Food Security: Is there a Causal Relationship?," Working Papers 9/14, Sapienza University of Rome, DISS.
    3. Hosoe, Nobuhiro, 2016. "The double dividend of agricultural trade liberalization: Consistency between national food security and gains from trade," Journal of Asian Economics, Elsevier, vol. 43(C), pages 27-36.
    4. Elleby, Christian, 2014. "Poverty and Price Transmission," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182722, European Association of Agricultural Economists.
    5. Rutten, Martine & van Dijk, Michiel & van Rooij, Wilbert & Hilderink, Henk, 2014. "Land Use Dynamics, Climate Change, and Food Security in Vietnam: A Global-to-local Modeling Approach," World Development, Elsevier, vol. 59(C), pages 29-46.
    6. Djuric, Ivan & Götz, Linde, 2016. "Export restrictions – Do consumers really benefit? The wheat-to-bread supply chain in Serbia," Food Policy, Elsevier, vol. 63(C), pages 112-123.
    7. Tiziano Distefano & Francesco Laio & Luca Ridolfi & Stefano Schiavo, 2017. "Shock transmission in the International Food Trade Network. A Data-driven Analysis," SEEDS Working Papers 0617, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Sep 2017.
    8. Alexandros Sarris, 2014. "Trade, food and welfare," Chapters,in: Handbook on Food, chapter 13, pages 325-352 Edward Elgar Publishing.
    9. Lindsay Shutes & Marijke Kuiper, 2015. "Expanding the household coverage of global simulation models: an application to Ghana," FOODSECURE Technical papers 3, LEI Wageningen UR.
    10. Magrini, Emiliano & Montalbano, Pierluigi & Nenci, Silvia & Salvatici, Luca, 2014. "Agricultural Trade Policy Distortions and Food Security: Is there a Causal Relationship?," 2014 Third Congress, June 25-27, 2014, Alghero, Italy 173091, Italian Association of Agricultural and Applied Economics (AIEAA).
    11. Sartori, Martina & Schiavo, Stefano, 2015. "Connected we stand: A network perspective on trade and global food security," Food Policy, Elsevier, vol. 57(C), pages 114-127.
    12. de Gorter, Harry & Drabik, Dusan, 2015. "Developing Countries' Policy Responses to Food Price Boom and Biofuel Policies," 2015 Conference, August 9-14, 2015, Milan, Italy 211564, International Association of Agricultural Economists.
    13. Fander Falconí & Juan Cadillo Benalcazar & Freddy Llive Cóndor & Jesus Ramos-Martin & Belén Liger, 2015. "Pérdida de autosuficiencia alimentaria y posibilidades de complementariedad agrícola en los países de UNASUR," Documentos de Trabajo CEPROEC 2015_06, Instituto de Altos Estudios Nacionales, Centro de Prospectiva Estratégica.
    14. Thennakoon, Jayanthi & Anderson, Kym, 2015. "Could the proposed WTO Special Safeguard Mechanism protect farmers from low international prices?," Food Policy, Elsevier, vol. 50(C), pages 106-113.
    15. Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci & Luca Salvatici, 2017. "Agricultural (Dis)Incentives and Food Security: Is There a Link?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(4), pages 847-871.
    16. Boulanger, Pierre & Kavallari, Aikaterini & M'barek, Robert & Rau, Marie Luise & Rutten, Martine, 2015. "Options to improve food security in North Africa: CGE modelling of deeper trade and investment integration with the European Union," 2015 Conference, August 9-14, 2015, Milan, Italy 211366, International Association of Agricultural Economists.

    More about this item

    Keywords

    food security; world food crisis; international grain trade; trade measures; trade liberalisation; CGE modelling;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F10 - International Economics - - Trade - - - General
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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