Optimal food price stabilisation policy

Gouel, Christophe

doi:10.1016/j.euroecorev.2012.10.003

Cited by 53 publications

(41 citation statements)

References 46 publications

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“…The main reason for this fluctuation in production was the price instability experienced both internationally and at a domestic level. Depending on the characteristics of the sector, agricultural markets usually feature competition that differs from that observed in other markets (Gouel, 2013). Agricultural production is carried out in small and medium scale enterprises where private ownership and individual enterprise are prevalent.…”

Section: Introductionmentioning

confidence: 99%

“…Price fluctuations do not only affect producers and consumers but they also compromise food safety (Gouel, 2013;Serra and Gil, 2013).…”

Section: Introductionmentioning

confidence: 99%

“…In times of high inflation these fluctuations can be more extreme. In such cases, it becomes harder for economic decision-making units to make healthy decisions and follow consistent policies (Ezekiel, 1938;Demirtas and Erkan, 2002;Andersen, 2013;Gouel, 2013).…”

Section: Introductionmentioning

confidence: 99%

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Determination of the Effect of Price Fluctuations on Producer Income – the Case of Potatoes

Arısoy

Bayramoğlu²

2017

Turkish JAF Sci.Tech.

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Prices of agricultural products fluctuate depending upon several factors. In Turkey, potatoes are one of the main products for which price fluctuations are observed. This study was undertaken to determine the effect of the fluctuation in potato prices on producer incomes in Turkey. The Neyman Method was used to determine the sample size. The number of enterprises required to achieve a representative sample size was determined to be 56, with a 5% error margin and a 95% reliability limit. The way in which the potato cultivation area is affected by price was examined. The Koyck model was utilized for this purpose. By using Koyck analysis, average lag time was calculated to be approximately 1 year. This result indicates that the fluctuation in potato prices has quite a rapid effect on production. It was determined that producer income varies greatly depending on annual potato prices. The difference between estimated potato price and the actual price for the year 2012 resulted in an income loss of 11,198.6 $/ha. Some sustainable efforts such as production planning can be recommended to prevent these price fluctuations.

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Section: Introductionmentioning

confidence: 99%

“…Price fluctuations do not only affect producers and consumers but they also compromise food safety (Gouel, 2013;Serra and Gil, 2013).…”

Section: Introductionmentioning

confidence: 99%

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Determination of the Effect of Price Fluctuations on Producer Income – the Case of Potatoes

Arısoy

Bayramoğlu²

2017

Turkish JAF Sci.Tech.

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“…5 The optimal policy problem is laid out mathematically in the supplemental appendix (Section B). The first-order conditions of this problem are derived following the methodology developed in Marcet and Marimon (2011); for details about the method and the interpretation of its first-order conditions, see Gouel (2013a). Solving this optimal policy problem produces storage and trade rules that are contingent on the state of the system.…”

Section: Optimal Price Stabilization Policiesmentioning

confidence: 99%

Managing Food Price Volatility in a Large Open Country: The Case of Wheat in India

Gouel¹,

Gautam²,

Martin³

et al. 2016

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India has pursued an active food security policy for many years using a combination of trade policy interventions, public distribution of food staples, and assistance to farmers through minimum support prices defended by public stocks. This policy has been quite successful in stabilizing staple food prices, but at a high cost, and with potential risks of unmanageable stock accumulation. Based on a rational expectations storage model representing the Indian wheat market and its relation to the rest of the world, we analyse the cost and welfare implications of this policy and unpack the contribution of its different elements. To analyse alternative policies, we assume that social welfare includes an objective of price stabilization and assess optimal policies corresponding to this objective. We consider fully optimal policies under commitment as well as optimal simple rules and show that adopting simple rules can achieve most of the gains from fully optimal policies. JEL classification: F13, O13, Q11, Q17, Q18.

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“…Apart from this direct cost borne by the government, there are additional costs, which arise from leakages, illegal diversion of food grains, and significant wastage due to poor storage and transport facilities 1 (Shreedhar, Gupta, Pullabhotla, Ganesh-Kumar, & Gulati, 2012). Food, fertiliser, power and irrigation subsides together accounted for 15.1 per cent of agricultural GDP in 2009-10 -up from 7.8 per cent in 1995-96 (Ganguly & Gulati, 2013). The Indian government is also actively involved in regulating international trade, e.g., by imposing selective export bans and zero import duties, which fuels international food price spikes and volatility (Anderson, Ivanic, & Martin, 2013;Anderson, 2013).…”

Section: Introductionmentioning

confidence: 99%

Modelling Indian Wheat and Rice Sector Policies

et al. 2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Tables Table 1 Correlation matrix of different prices for wheat and rice p.22 Table 2 Regressions for wheat production p.26 Table 3 Regressions of rice production p.27 Table 4 Procurement regression estimates p.30 Table 5 Regressions of wheat demand p.37 Table 6 Regressions of rice demand p.38 Table 7 Results of the public October stock level estimation p.46 Table 8 Regression for the private rice stocks p.48 Table 9 Foreign trade regression estimates p.52 The study revealed the strong impact of policy measures on production, procurement, stocks and trade. We detected several market distortions and mounting fiscal costs. Terms of use: Documents in EconStor mayWheat and rice supply strongly and significantly respond to the minimum support price (MSP). Wholesale prices at planting or lagged harvest time prices are largely irrelevant for production. The Food Corporation of India's (FCI's) procurement volume is driven by the production level and the difference between the MSP and market price. The signs of the estimated price elasticities of demand are consistent with the theory; however, for rice they turned out to be insignificant. Rice consumption turned out to be strongly influenced by distribution of subsidised rice, which can be linked to high coverage and subsidy under the public distribution system (PDS). In the case of wheat, the influence of subsidised wheat is much less pronounced, probably due to weaker functioning of the PDS for this grain.The public stock analysis suggests higher storage losses for rice (10 per cent) than for wheat (2 per cent). Public stocks are found to strongly crowd out private stocks but not to the same extent as public stocks are build up. Total exports are highly distorted by trade regulations.Therefore, there was no correlation detected between exports and domestic vs.international price difference in the case of rice and in the case of wheat, the correlation turned out to be contrary to theoretical expectations. The analysis of intra-year data revealed strong seasonality in prices, procurement and stock levels, in particular, for wheat (this was lower for rice).Starting from 2006-07, there is a clear upward trend in inflation adjusted costs of operating the public food procurement and distribution system, mainly because of rising procurement volume and MSPs. On the other hand, revenue has declined in real terms, due to lower real central issue prices and only marginal revenue from domestic sales and exports. As a...

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Optimal food price stabilisation policy

Cited by 53 publications

References 46 publications

Determination of the Effect of Price Fluctuations on Producer Income – the Case of Potatoes

Determination of the Effect of Price Fluctuations on Producer Income – the Case of Potatoes

Managing Food Price Volatility in a Large Open Country: The Case of Wheat in India

Modelling Indian Wheat and Rice Sector Policies

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