Showing papers by "International Food Policy Research Institute published in 1996"

Asia-Pacific Food Markets and Trade in 2005: A Global, Economy-wide Perspective

Abstract: Rapid industrialization in East Asia, particularly China, is raising questions about who will feed the region in the next century and how Asia will pay for its food imports. The paper addresses this question by first reviewing existing food sector projections and then taking an economy-wide perspective using projections to 2005, based on the global CGE model known as GTAP. After showing the impact of implementing the Uruguay Round, the paper explores the effects of slower global agricultural productivity growth and of slower economic growth in China. Several policy shocks are also examined. They include the entry of China (and hence Taiwan) into the World Trade Organization (WTO), and the failure to fully abolish the bilateral quotas on textiles and clothing trade as promised under the Uruguay Round. A slow-down in farm productivity growth could be very costly to the world economy, as could slower economic growth in China. Failure to honour Uruguay Round obligations to open textile and clothing markets in OECD countries is shown to reduce East Asia's industrialization and thereby slow its net imports of food. On the other hand, the trade reform that is likely to accompany China's WTO membership would greatly benefit the economies of China and the world. It would boost exports of manufactures and strengthen food import demand, not only by China, but also its densely populated neighbours with whom its intra- and inter-industry trade in manufactures would intensify.

The role of defense cuts in the california recession computable general equilibrium models and interstate factor mobility

Abstract: . This study develops a computable general equilibrium (CGE) model of California to examine the impact of recent defense cuts on the state's economy. The study demonstrates use of a CGE model to examine the sensitivity of regional economy models to assumptions about factor migration. Model variants include input-output and closed economy models as limiting cases. The results show that the California economy is sensitive to defense cuts. The multiplier relating the impact of defense cuts to state product ranges from one to almost five, depending on the degree of interstate factor mobility.

Establishing tradable water rights: implementation of the Mexican water law

Abstract: Mexico passed a new water law in 1992 that shifted from state-managed water policy to a regulated market-oriented policy with tradable water rights. Water trading will initially be closely supervised by government agencies, but the law includes a number of provisions that will allow liberalization of water markets as water users become more involved in operation and management of water and gain experience in water trading. Incentives for the Mexican water policy reforms include the growing economic value of increasingly scarce water; the rising budgetary costs from highly subsidized capital development and operations and maintenance for irrigation and water supply systems; and general liberalization of the Mexican economy, which has raised the cost of maintaining relatively inflexible water allocation systems that cannot respond to changing incentives.

Productivity Measurement in the Presence of Quality Change

Abstract: Dealing meaningfully with changes in output and input quality is a pervasive problem when constructing aggregate measures of output and input quantities and the productivity indexes formed as a ratio of these quantity measures. The problems are both methodological and practical and directly influence the interpretation of the resulting productivity measures. In this paper we provide a practical method of controlling for quality change and evidence on the effects of quality adjustment on measured rates of growth in multifactor productivity in U.S. agriculture. The principal methodological problem in constructing real quantity indices is how to avoid confusing substitution effects, i.e., priceinduced changes in the input or output mix, with changes in the scale of the respective quantity aggregate. If economic behavior is used to inform the choice of aggregation technique, the problem can be minimized when changes in the quantity variables are weighted with the appropriate relative input and output prices. For time-series analysis, the consensus in the extensive literature on this topic is that chained indexes-specifically, a discrete approximation of the Divisia index-are best at distinguishing scale from substitution effects because they use rolling price weights to capture changes over time in relative prices.' See, for example, Richter, Hulten, and Diewert.

Food for all in 2020 : can the world be fed without damaging the environment ?

Abstract: Approximately 780 million people world-wide are chronically undernourished, and past gains in food production have been associated with environmental problems, yet global demand for cereals is projected to increase by 56% and for meat by 74% between 1990 and 2020.The International Food Policy Research Institute has developed the view that every person in the world can have access to sufficient food to sustain a healthy and productive life, that malnutrition can be abolished, and that food can originate from efficient, effective, and low-cost food systems that are compatible with sustainable use of natural resources. Moreover, IFPRI has concluded that these conditions can be achieved by the year 2020, if the world commits itself to specified changes in behaviour, priorities, and policies. In order for these changes to occur, sustained action is needed in six areas: (1) strengthening the capacity of developing-country governments; (2) investing more in poor people; (3) accelerating agricultural productivity; (4) assuring sound management of natural resources; (5) developing competitive markets; and (6) expanding and realigning international development assistance. We have the knowledge and the capacity to meet the food needs of every person without damaging the environment. What is needed is political will and commitment on the part of all members of society to take the required action.

Smallholder dairying under transactions costs in East Africa

Abstract: It is argued that dairying is vital to future viability of many small farms in East Africa and that high transactions costs for dairy production and marketing limit participation by asset- and information-poor smallholders. Case studies from Kenya and Ethiopia illustrate the role of dairy cooperatives in reducing transactions costs. Analysis of the determinants of producer prices received by a sample of dairy producers near Addis Ababa suggests that different levels of access to infrastructure, assets, and information explain why different households contemporaneously accept widely different producer prices for fluid milk.

Institutions and market distortions: international evidence for tobacco

Abstract: The link between institutional factors and agricultural protection levels is investigated using cross-section time series data on three tobacco types. The analysis includes the presence of monopsonistic marketing agencies, political institutions, and the feasibility of tax revenue collection and diversification. Protection increases with economic development and with well functioning direct taxation systems, but tends to be lower in the most advanced pluralistic democracies. The presence of strong anti-smoking interest groups seems to galvanise the lobbying effort of tobacco farmers — higher protection is associated with that presence.

Agricultural Market Reforms in South Asia

Abstract: The four major countries of South Asia-India, Bangladesh, Pakistan, and Sri Lanka-share a common administrative, legal, and economic heritage as parts of the former British empire in the subcontinent. A common colonial history, similar institutions, and the generally low levels of income among the countries of South Asia provide an interesting backdrop for a comparative review of recent market reforms in this region. The objective of this paper is to review contemporary reforms in the agricultural markets of this region focusing on the (a) prereform situation, (b) reform process and impact, and (c) lessons to be drawn. The experiences of Bangladesh and India dominate the empirical content of the paper, with limited evidence from Sri Lanka and Pakistan to sustain the

Dynamic Gains and Losses from Trade Reform: An Intertemporal General Equilibrium Model of the United States and Mercosur

Abstract: An intertemporal general equilibrium model of the United States and MERCOSUR is created to analyze the dynamic adjustments in both regions' commodity and capital markets after trade liberalization. Simulation results show that tariff reductions initiated by MERCOSUR have small positive effects on the U.S. production, trade, consumption and investment, and stimulates MERCOSUR's growth, and improves its current account. If tariffs are eliminated by both regions, both regions are better off from points of intertemporal social welfare, international trade, domestic investment, and growth. Agriculture benefits more from trade reform, which implies that rural-agricultural sector might have been a victim of trade protection policies.

Modeling Household Behavior in Developing Countries: Discussion

Abstract: A large and growing body of literature has examined how agricultural households cope with risk. Much of the work has focused on which types of households are better able to smooth consumption testing whether households with more resources and greater access to income-smoothing institutions such as credit markets or well-functioning labor markets exhibit greater consumption smoothing. However income shocks may have different effects upon different individuals within households and differences in individual ability to smooth income or consumption may have welfare consequences which go beyond foregone income. The development of collective household models challenges the assumption that individuals within households maximize a single utility function. The assumption of income pooling has also been rejected in a growing body of empirical research on intrahousehold resource allocation. However research on risk-pooling within households and differences in individual abilities to smooth consumption is relatively new. Selected papers are discussed.

Irrigation development and environmental degradation in developing countries — a dynamic model of investment decisions and policy options

Abstract: In the wake of increased environmental and sustainability concerns associated with agricultural development, developing countries are faced with the dilemma of choice between the short-run technological gains and the long-run environmental conservation. A dynamic investment decision model is developed to optimize the use of scarce public investment funds in the magagement of irrigation water supply, depth to water table and soil salinity. Four major classes of investments with different impacts on the hydrological balance within the Indus basin are considered: (a) expansion of the surface irrigation network, (b) public drainage projects, (c) tax and subsidy policies designed to influence the rate of private groundwater exploitation and (d) investment in improving the efficiency of the existing canal system by reducing conveyance losses. The crop area lost due to water logging and salt accumulation is treated as a damage cost of increasing the application of surface irrigation water. The resulting optimality conditions from the model are used to assess the development and operation of public drainage projects. The model results are compared for areas underlain by fresh and saline groundwater. The model is also used to analyze recent policy debate which has focused on the use of incentives such as subsidized credit, energy subsidies, and electrical grid expansion to accomplish the transfer of tubewell operation from the public to the private sector. Optimal switching conditions for such transfers are derived. The results show that a private farmer's optimal decision will diverge more from the societal optimal decision as more externalities from surface irrigation are accounted for.

Exchange Rate, Fiscal and Agricultural Policies in Africa: Does Adjustment Hurt the Poor?

Abstract: Trade, exchange rate, fiscal, and agricultural sector policy reforms are the pillars of structural adjustment programs in Africa. Results indicate that trade and exchange rate reforms are associated with a large decline in economic rents and a shift in relative prices that favor the rural and urban poor. Fiscal reforms have not brought about draconian belt-tightening measures, although the incidence of public spending, particularly in the social sectors and in terms of public sector employment, remains far from progressive. Reduction of export crop taxation contributes to higher incomes for the poor, and domestic food crop liberalization has not led to increases in purchase prices of staple commodities for most low-income households.

Macroeconomic crises and poverty monitoring: a case study for India

Abstract: This case study for India finds an explanation for the drop in average household consumption in rural areas occurring in the year after the 1991 stabilization program instigated to deal with a macroeconomic crisis. A number of factors contributed to falling average living standards, including inflation, a drop in agricultural yields, and contraction in the non-farm sector. The same factors resulted in high poverty measures, although there was also a sizable unexplained shift in distribution. Despite their having an unusually rich data base, the authors nevertheless are unable to account for a large share of the increase in measured poverty, and cannot rule out the possibility that it was the result of sampling and non-sampling errors. Only about one-tenth of the measured increase in poverty is explicable in terms of the variables that would be expected to transmit shocks to the household level. Soon after, the poverty measures returned to their previous level. The study cautions users of survey-based welfare indicators not to read too much into a single survey, particularly when (as here) its results are difficult to explain in terms of other data on hand. However, the usefulness of objective socioeconomic survey data for longer-term poverty monitoring should not be thrown into doubt by these results.