IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/564.html
   My bibliography  Save this paper

Costs and benefits of agricultural price stabilization in Brazil

Author

Listed:
  • Braverman, Avishay
  • Kanbur, Ravi
  • Brandao, Antonio Salazar P.
  • Hammer, Jeffrey
  • Lopes, Mauro de Rezende
  • Tan, Alexandra

Abstract

In recent years, agricultural price stabilization policies have been recommended in Brazil as a way to reduce government intervention and open the sector for international trade without internalizing the instability of world prices. The proposal discussed (and eventually implemented in 1987) was to establish a system of price bands around a moving average of past prices, with the government relying on stocks to defend the bands. The authors evaluated the"band proposal"for six commodities, using historical data and posing this question: what would have happened if price bands had been adopted in the past six to ten years (compared with free trade)? There were two major findings. First, the implications of adopting a band-rule policy depend heavily on the specific characteristics of the commodities. Second, the welfare gains for risk reduction through agricultural price stabilization are unlikely to be large relative to the welfare gains from price reform that reduces market distortions for these six agricultural commodities. More research into the macroeconomic implications of price stabilization policies is necessary, particularly in countries with unstable but moderate rates of inflation.

Suggested Citation

  • Braverman, Avishay & Kanbur, Ravi & Brandao, Antonio Salazar P. & Hammer, Jeffrey & Lopes, Mauro de Rezende & Tan, Alexandra, 1990. "Costs and benefits of agricultural price stabilization in Brazil," Policy Research Working Paper Series 564, The World Bank.
  • Handle: RePEc:wbk:wbrwps:564
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1990/12/01/000009265_3960930081914/Rendered/PDF/multi_page.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Williams, Gary W. & Thompson, Robert L., 1984. "The Brazilian Soybean Industry: Economic Structure and Policy Interventions," Foreign Agricultural Economic Report (FAER) 147520, United States Department of Agriculture, Economic Research Service.
    2. Kanbur, S. M. Ravi & Vines, David, 1986. "North-South interaction and commod control," Journal of Development Economics, Elsevier, vol. 23(2), pages 371-387, October.
    3. Newbery, David M, 1989. "The Theory of Food Price Stabilisation," Economic Journal, Royal Economic Society, vol. 99(398), pages 1065-1082, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oliveira, Maria Aparecida Silva & Teixeira, Erly Cardoso, 2005. "Política de estabilização de renda para a agricultura familiar: uma análise de risco," Brazilian Journal of Rural Economy and Sociology (Revista de Economia e Sociologia Rural-RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 43(1), pages 1-18, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:564. 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: (Roula I. Yazigi). General contact details of provider: http://edirc.repec.org/data/dvewbus.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.