A quantitative analysis of trade policy responses to higher world agricultural commodity prices

The worldwide spike in prices of agricultural commodities in 2007–2008 elevated food security and social stability issues to the forefront, especially in many food-deficit countries. In order to mitigate the global food commodity price pressure on domestic markets, several major exporting and importing countries, mostly developing economies, adopted trade policy changes such as export bans (or raising export restrictions) or reducing import tariffs during the same period. This paper estimates the potential impacts of these policies on the world prices and trade of major agricultural commodities using a set of multi-country, multi-commodity, and partial-equilibrium models. Our findings suggest that over all, the trade policy responses in various countries increased the prices of all agricultural commodities, although the impact on the total net trade varies by commodity. The simulation results show that the overall impact of trade policy distortions on the world rice price is most significant at 24%, followed by wheat (14%) and barley (9%). In general, the poorer food-deficit countries/regions, which have limited power to manipulate their trade policies, experienced higher price increases compared to those major trading countries that adopted policy interventions. Also, the developing countries that are net importers which did not implement trade policy interventions experienced significant welfare losses resulting from interventions implemented by other major trading countries.     

Jobs and agricultural policy: Impact of the common agricultural policy on EU agricultural employment

This paper investigates the relationship between EU agricultural subsidies and the outflow of labor from agriculture. We use more representative subsidy indicators and a wider coverage (panel data from 210 EU regions over the period 2004-2014) than has been used before. The data allow to better correct for sample selection bias than previous empirical studies. We find that, on average, CAP subsidies reduce the outflow of labor from agriculture, but the effect is almost entirely due to decoupled Pillar I payments. Coupled Pillar I payments have no impact on reducing labor outflow from agriculture, i.e. on preserving jobs in agriculture. The impact of Pillar II is mixed. Our estimates predict that an increase of 10 percent of the CAP budget would prevent an extra 16,000 people from leaving the EU agriculture sector each year. A 10 percent decoupling would save 13,000 agricultural jobs each year. However, the budgetary costs are large. The estimated cost is more than € 300,000 per year (or more than € 25,000 per month) per job saved in agriculture.     

Food policy reforms for sustainable agricultural development in Uzbekistan, the Kyrgyz Republic, and Tajikistan

Given the present conditions of demographic growth and the complicated transition toward market economies in Central Asia, the problems of food security and designing policies to achieve it without compromising economic growth are at the forefront of policy agendas in these countries. This paper reviews food policy reforms in Uzbekistan, the Kyrgyz Republic, and Tajikistan in the context of sustainable agricultural development. Analyzing the trends in the agricultural sector during the transition period, it identifies the major impacts of policy reforms on food security and enumerates future challenges for improving food security in these countries. It finds that despite the progress made in reforming their economies toward market-oriented ones, the three countries continue to face food insecurity to varying degrees. It concludes that there is an urgent need to further expand and deepen the reform process by enabling functioning land, labor, and financial markets.     

World food prospects to the year 2000

Declining rates of growth are indicated for total food demand as well as import demand. Real world prices are likely to continue on their downward trend. Increased attention to agricultural development will help ensure that average food consumption levels will rise in all developing regions except Sub- Saharan Africa. Market instability remains a problem but developing countries are now better protected against it. The dark side of the picture: chronic undernutrition among the poorest of the poor is not likely to be eradicated in this century.     

Food policy research for improving the reform of agricultural input and output markets in Central Asia

Agriculture is a significant component of the Central Asian economies. Since independence, the republics have implemented agricultural reforms in varying measure, yet production has fallen sharply across the region. The more ambitious agricultural reform programs have included measures aimed at liberalizing agricultural marketing, trade and prices. However, so far the expected supply response has yet to emerge. The objective of this paper is to highlight key policy and research issues surrounding reform of agricultural markets. It summarizes the main features of agricultural performance since the reforms, highlighting trends in grain and cotton, livestock, input use, and trade and analyzes key constraints to improvement of the sector, emphasizing price policy, sequencing problems, and institutional weakness. It presents a research agenda by identifying the main research needs for better agricultural policy design. It calls for more research on input and output market efficiency, private sector development, the effects of reform on farmers, sequencing issues, comparative advantage, water management, land tenure and farm size.     

ISDN in the year 2000

Telecommunications plays a central role in fundamentally altering our relation to information and the manner in which we place value upon it. This article looks ahead to the state of telecommunications in the year 2000 and describes how technological advances are becoming obsolete with increasing speed. It discusses current technological advances which are nevertheless forming the backbone of planning ISDN, and comments on how ISDN is never likely to meet the objectives towards which it is directed unless basic planning assumptions are rethought in the light of the advances moving forward at unexpectedly rapid rates.     

Regional trade,government policy and food security: Recent evidence from Zambia

Given heavy dependence on rainfed maize production, countries in East and Southern Africa must routinely cope with pronounced production and consumption volatility in their primary food staple. Typical policy responses include increased food aid flows, government commercial imports and stock releases, and tight controls on private sector trade. This paper examines recent evidence from Zambia, using a simple economic model to assess the likely impact of maize production shocks on the domestic maize price and on staple food consumption under alternative policy regimes. In addition to an array of public policy instruments, the analysis evaluates the impact of two key private sector responses in moderating food consumption volatility – private cross-border maize trade and consumer substitution of an alternate food staple (cassava) for maize. The analysis suggests that, given a favorable policy environment, private imports and increased cassava consumption together could fill roughly two-thirds of the maize consumption shortfall facing vulnerable households during drought years.     

Organising agriculture in the year 2000

How much of the world's potential food production is realised depends on how effectively agriculture is organised. The authors evaluate the effects of alternative agricultural systems on food production, consumption and trade growth rates in the food-deficit, developing countries. The effects of these alternative agricultural systems on production and trade in the rest of the world are also discussed. They conclude with a review of the specific characteristics of the alternative systems and examine the role each is likely to play in organising agriculture in the year 2000.     

The AMS in agricultural trade negotiations: a review

This article reviews the role of the Aggregate Measure of Support (AMS) in the agricultural trade negotiations of the Uruguay Round. Contrary to expectations at the start of these negotiations, the AMS only occupies a subsidiary position in the final agreement. In order to explain this, first an economic analysis is presented of the Producer Subsidy Equivalent (PSE), the basic AMS concept in the GATT discussions. Secondly, the political AMS debate is described and analysed, using information from unpublished GATT documents. Although the PSE concept is based on simple assumptions, its measurement already meets a number of difficult problems (policy coverage, product coverage, external reference prices, currency). Once these are solved, the concept may offer a brief insight into actual governmental support in agriculture. However, the calculations do not provide a sound measure of the trade distortions caused by agricultural policies. Mainly for that reason, the idea of a pure aggregated approach—based on the AMS—proved unsuccessful in the negotiations. Instead, the Contracting Parties accepted the framework of making binding agreements on three separate areas: internal support, market access and export support. While important and very specific commitments were made in the areas of agricultural imports and exports, the AMS has only found application in the internal support area.     

Foodgrain price and trade policy in the Dominican Republic

As in many developing countries, the Dominican Republic has both an overvalued official foreign exchange rate and a policy of heavy government intervention in foodgrain markets. The Institute of Price Stabilization (INESPRE) controls the marketing, pricing and imports of the staple foodgrain, rice. INESPRE's operations and the overvalued currency produced an undervaluation of domestic rice production and an upward distortion of foodgrain imports. Additionally, the increasingly unfavourable rice-fertilizer price ratio has undoubtedly suppressed yields. As part of a set of austerity measures, the newly elected President banned rice imports. Dominican foodgrain policy may be at an important crossroads and a policy assessment is very timely.     

WTO sees trade growth slowing to 6.5% this year

The Geneva-based WTO,in a statement said world trade growth would likely moderate to 6.5% this year from 2010’s record-breaking 14.5% expansion.The sharp rise in trade volumes last year     

Rural development and agricultural policy in the EEC

Decision making on integrated rural development projects is a complex affair. Dr van den Noort isolates some important elements in the process, puts them into an economic policy framework and examines them in relation to some experiences in the Netherlands and the EEC. A wide gap emerges between the philosophy and practice of agricultural and rural policy which bodes ill for the future of the EEC. If agricultural policies and rural development are to lead to greater intergration in the EEC then they must be used to increase a still to be defined general welfare function for the EEC and not to further narrow-minded regional policies.     

Food policy and the new home economics

The author summarizes the basic structure of the new home economics and makes a comparison with the standard economics of the consumer. He develops a measure of the quantitative importance of home production activities based on data from several studies of time allocation and on detailed data from a recent Philippine study The implications of the new home economics for leisure, work, food supply, family size, education health and food policy are discussed.     

Food inspection and EEC policy

A European study of the organisation of efficient food inspection systems is needed before more radical changes in national inspection systems are attempted through harmonisation in the EEC. The author discusses food inspection in the Netherlands, the present state of harmonisation and the problems arising from it, paying particular attention to meat and meat products. Difficulties arise when veterinarians are given exclusive responsibility for policing regulations.     

Food and agricultural marketing in China

The author reports on the marketing and distribution system in China, the world's most populous country. He examines the scope and dimension of the system, the incentives for production, the various marketing channels, transport, seasonal pricing, locational differences, consumer services, and prices and margins. The marketing system is relatively simple but effective, does not offer a wide consumer choice but provides basic requirements for all. As mechanization enables increased productivity the author expects more land to be made available to produce a wider range of foods.     

US and EEC agricultural trade policies: A long-run view of the present conflict

This paper traces post-war agricultural policy in the USA and compares it with the developing policies of the EEC. It examines the reasons for, and the results of, the protectionist policies which have been adopted in each case, and how the present conflict between the two trading blocs were inevitable, due to the foundations laid in the 1950s. The grain sector is used to illustrate the dominant tendencies in US agricultural policies, which include a programme of food aid used as an outlet for US agricultural capacity. The conclusion outlines how the EEC, with its potential for further growth in grain exports, can learn from the US experience in this, and other, aspects of agricultural trade.