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Aggregate agricultural supply response in developing countries : a survey of selected issues

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  • Schiff, Maurice
  • Montenegro, Claudio E.

Abstract

The authors review several studies of the aggregate agricultural supply response. Using both economic and econometric reasons, they argue that time series estimation typically generates a downward-biased estimate of the response to a credible reform. Even though time series estimates can provide an accurate picture of past behavoiral relations, they do not provide an adequate basis for forecasting the impact of policy reform. This is especially true in developing countries, where policy reforms involve large changes and have included agricultural price reform, industrial trade liberalization, financial sector reform, and macroeconomic stabilization. Under those circumstances, parameters values obtained under the former policy regime have little relevance in the new regime. The authors also argue that investment in public goods should be viewed as complementary to, not competitive with, price policy. They claim that to select the policy with the biggest impact on output makes no sense. They provide what they consider to be better criteria for choosing the best from alternative policies.

Suggested Citation

  • Schiff, Maurice & Montenegro, Claudio E., 1995. "Aggregate agricultural supply response in developing countries : a survey of selected issues," Policy Research Working Paper Series 1485, The World Bank.
  • Handle: RePEc:wbk:wbrwps:1485
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    References listed on IDEAS

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    1. T. Ademola Oyejide, 1984. "Accelerating Agricultural Growth in Sub-Saharan Africa: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(5), pages 684-685.
    2. Cavallo, Domingo & Mundlak, Yair, 1982. "Agriculture and economic growth in an open economy: the case of Argentina," Research reports 36, International Food Policy Research Institute (IFPRI).
    3. Boussard, J M, 1985. "Is Agricultural Production Responsive to Prices?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 12(1-2), pages 31-44.
    4. Platteau, J.P., 1993. "Sub-Saharan Afraica as a Special Case: The Crucial Role of (Infra)Structural Constraints," Papers 128, Notre-Dame de la Paix, Sciences Economiques et Sociales.
    5. Krueger, Anne O & Schiff, Maurice & Valdes, Alberto, 1988. "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review, World Bank Group, vol. 2(3), pages 255-271, September.
    6. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
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    Citations

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    Cited by:

    1. Rainer Thiele, 2003. "Price Incentives, Non‐price Factors and Agricultural Production in Sub‐Saharan Africa: A Cointegration Analysis," African Development Review, African Development Bank, vol. 15(2‐3), pages 425-438.
    2. Donato, Romano & Carraro, Alessandro, 2015. "Modelling Acreage, Production and Yield Supply Response to Domestic Price Volatility," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207278, Italian Association of Agricultural and Applied Economics (AIEAA).
    3. Lema, Daniel & Gallacher, Marcos, 2015. "Argentine Agricultural Policy: Economic Analysis and Impact Assessment Using the Producer Support Estimate (PSE) Approach," 2015 Conference, August 9-14, 2015, Milan, Italy 212040, International Association of Agricultural Economists.
    4. repec:hal:journl:dumas-00802135 is not listed on IDEAS
    5. Ali,Rubaba & Barra,Alvaro Federico & Berg,Claudia N. & Damania,Richard & Nash,John D. & Russ,Jason Daniel, 2015. "Agricultural technology choice and transport," Policy Research Working Paper Series 7272, The World Bank.
    6. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314 World Scientific Publishing Co. Pte. Ltd..
    7. Luis Lanteri, 2009. "Response of the Argentine Soybean Sown Area to Prices," BCRA Working Paper Series 200944, Central Bank of Argentina, Economic Research Department.
    8. Roman Keeney & Thomas W. Hertel, 2008. "U.S. Market Potential For Dried Distillers Grain With Solubles," Working Papers 08-13, Purdue University, College of Agriculture, Department of Agricultural Economics.
    9. Nouve, Kofi & Staatz, John M., 2003. "The Food Security Debate In West Africa Following The Wto Agreements On Agriculture," Staff Papers 11746, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    10. Rao, N. Chandrasekhara, 2004. "Aggregate Agricultural Supply Response in Andhra Pradesh," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 59(1).
    11. Aboagye, Anthony Q. & Gunjal, Kisan, 2000. "An analysis of short-run response of export and domestic agriculture in sub-Saharan Africa," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 23(1), June.
    12. Julie SUBERVIE, 2006. "The impact of world price instability on agricultural supply according to several macroeconomic factors," Working Papers 200604, CERDI.
    13. M. Branchi & G. Gabriele & V. Spiezia, 1999. "Traditional Agricultural Exports, External Dependency And Domestic Price Policies. African Coffee Exports In A Comparative Perspective," UNCTAD Discussion Papers 140, United Nations Conference on Trade and Development.
    14. Tschirley, David L. & del Castillo, Anne Marie, 2007. "Local and Regional Food Aid Procurement: An Assessment of Experience in Africa and Elements of Good Donor Practice," Food Security International Development Working Papers 54562, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    15. World Bank, 2012. "Responding to Higher and More Volatile World Food Prices," World Bank Other Operational Studies 12950, The World Bank.
    16. Surajit Deb, 2003. "Terms of Trade and Supply Response of Indian Agriculture: Analysis in Cointegration Framework," Working papers 115, Centre for Development Economics, Delhi School of Economics.
    17. Aboagye, Anthony Q. & Gunjal, Kisan, 2000. "An analysis of short-run response of export and domestic agriculture in sub-Saharan Africa," Agricultural Economics, Blackwell, vol. 23(1), pages 41-53, June.
    18. repec:spr:ijlaec:v:60:y:2017:i:1:d:10.1007_s41027-017-0091-2 is not listed on IDEAS
    19. Headey, Derek & Bezemer, Dirk & Hazell, Peter B., 2008. "Agricultural exit problems: Causes and consequences," IFPRI discussion papers 802, International Food Policy Research Institute (IFPRI).
    20. U. Martin Persson, 2015. "The impact of biofuel demand on agricultural commodity prices: a systematic review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 4(5), pages 410-428, September.
    21. Luis Lanteri, 2008. "Argentina’s Soybean Acreage Response to Changes in Price Incentives," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(52), pages 57-86, October -.
    22. Tschirley, David L. & del Castillo, Anne Marie, 2007. "Local and Regional Food Aid Procurement: An Assessment of Experience in Africa and Elements of Good Donor Practice," Food Security Collaborative Working Papers 54486, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    23. Bachewe, Fantu Nisrane & Taffesse, Alemayehu Seyoum, 2015. "Dynamic supply response of farm households in Ethiopia:," ESSP working papers 78, International Food Policy Research Institute (IFPRI).
    24. Christophe Gouel, 2013. "Rules versus Discretion in Food Storage Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(4), pages 1029-1044.
    25. Surajit Deb, 2002. "The Debate on Agriculture-Industry Terms of Trade in India," Working papers 109, Centre for Development Economics, Delhi School of Economics.

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