Does agricultural trade liberalization increase risks of supply-side uncertainty?: Effects of productivity shocks and export restrictions on welfare and food supply in Japan

Tanaka, Tetsuji; Hosoe, Nobuhiro

doi:10.1016/j.foodpol.2011.01.002

Cited by 46 publications

(46 citation statements)

References 6 publications

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“…Support for this interpretation of the Philippine's food security policy motivation for rice market intervention can be found, for example, in SEPO (2010), Intal et al (2012) and Department of Agriculture (2012). Similar policy motivations for ongoing rice market interventions in Indonesia, Japan and other Southeast Asian countries have been noted by Trethewie (2012), Tanaka and Hosoe (2011) and Clarete et al (2013). We investigate the effects of given rice market interventions outside of business-as-usual conditions by constructing two baseline simulations with a detailed dynamic CGE model: one in which current rice market interventions remain in place (the 'with support' case) and one in which they are permanently removed (the 'without support' case).…”

Section: Discussionsupporting

confidence: 71%

The effects of domestic rice market interventions outside business-as-usual conditions for imported rice prices

2014

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The Philippine government intervenes in the domestic rice market through the imposition of import tariffs and the provision of producer and consumer subsidies. While policymakers are aware that these programmes come with allocative efficiency costs, they justify the programmes on the grounds that they insulate the domestic economy from unexpected price spikes in the international rice market. An interesting matter for policy evaluation is to quantify the insulation benefit that the programmes provide in circumstances of sudden severe import price spikes. To examine this question, we undertake a dynamic computable general equilibrium (CGE) simulation in which the Philippines is subject to an external rice price shock. We find that the insulation benefit of the support programmes under a 2008-like event is worth approximately 0.10% of real consumption. However, the cost of insuring against these price spikes is significant. We estimate the annual cost of the rice market interventions at approximately 0.40% of real consumption.

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Section: Discussionsupporting

confidence: 71%

The effects of domestic rice market interventions outside business-as-usual conditions for imported rice prices

2014

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“…2 Other quantitative studies in this area include, for example, the study by Hertel et al (2001) which finds that world-wide trade liberalisation leads to the lowest levels of grain price volatility, with little impact on poverty. Single country studies include Pyakuryal et al (2010), which finds that trade liberalisation has improved overall food security in Nepal, but with unequal impacts across regions, and Tanaka and Hosoe (2011), which finds little evidence to support the contention that trade liberalisation threatens Japan's national food security. 4 For a large country, similar effects occur with one major difference, which is that, as a result of the export tax imposed by the government, world supply falls substantially, which pushes the world price upwards from P w 0 to P w 1 .…”

Section: The Economic Impacts Of Trade Measures: a Graphical Expositionmentioning

confidence: 99%

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

2013

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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.

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“…Furthermore, Allouche (2011) points out that, when water and land resources are scarce, food imports represent the main channel though which countries fulfill their food needs, so that global trade enhances food and water security. For instance, Tanaka and Hosoe (2011) find that protection of the domestic rice market harms, rather than ensures, Japan's national food security. Matthews (2014) claims that an open and predictable trading system plays an essential role in promoting global food security by making the system more efficient and more responsive to shocks.…”

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confidence: 99%

Connected we stand: A network perspective on trade and global food security

Sartori

Schiavo

2015

Food Policy

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We analyze the link between virtual water trade, that is, the flow of water embodied in the international trade of agricultural goods, and vulnerability to external shocks from the vantage point of network analysis. While a large body of work has shown that virtual water trade can enhance water saving on a global scale, being especially beneficial to arid countries, there are increasing concerns that openness makes countries more dependent on foreign food suppliers and, in this way, more prone to external shocks. Our evidence reveals that the increased globalization witnessed in the last three decades is not associated with the increased frequency of adverse shocks (in food production). Furthermore, building on recent advances in network analysis that connect the stability of a complex system to its topological features, we find that the world is more interconnected, but not necessarily less stable.Keywords: virtual water; international trade; vulnerability; complex networks; agricultural production shocks JEL codes: F14, F18, Q25, Q56 Acknowledgements Financial support received through the project "The global virtual-water network: social, economic, and environmental implications" (FIRB -RBFR12BA3Y) funded by the Italian Ministry of Education, University and Research (MIUR) is gratefully acknowledged. The authors thank Francesco Laio and Stefania Tamea for providing the data on virtual water trade, Andrea Fracasso for insightful comments on an earlier draft of the paper, two anonymous referees and the Journal Editor for their suggestions and valuable inputs. 2 IntroductionThis paper investigates whether the globalization of food trade has made the world more vulnerable to shocks and, as a result, whether there is a trade-off between stability and openness. To do so we exploit the insights provided by network analysis: we study the structural features of the web of bilateral trade flows in agricultural goods -and the associated flows of virtual water-to ascertain whether they have evolved in a way that makes the world system more (or less) prone to large disruptions. In our endeavor, we relate to several streams of the existing literature, and interweave them to provide novel and original insights on the relationship between international trade and food security. The idea of measuring the water 'embodied' in goods, and 'virtually' traded from one country to another when goods are sold across borders, has been introduced by Allan (1993). In his seminal study, Allan describes virtual water (VW) trade as a market-mediated mechanism that enables water-scarce regions to cope with water scarcity (and food security) over the past few decades. (2012), the temporal evolution of the virtual water network is also analyzed, showing the progressive intensification of VW exchanges and the geography of these variations. We contribute to this literature by linking the topological features of the global network of VW trade to the resilience of the world system to shocks. In fact, the relationship between network topolog...

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Does agricultural trade liberalization increase risks of supply-side uncertainty?: Effects of productivity shocks and export restrictions on welfare and food supply in Japan

Cited by 46 publications

References 6 publications

The effects of domestic rice market interventions outside business-as-usual conditions for imported rice prices

The effects of domestic rice market interventions outside business-as-usual conditions for imported rice prices

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

Connected we stand: A network perspective on trade and global food security

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