Agricultural Market Liberalization Research Articles

A Study on the Price and Preference for Imported Fruits by Country-of-Origin

Apples and pears are receiving relatively high attention compared to other agricultural products regarding whether or not to allow imports. As agricultural market liberalization measures such as the RCEP and the CPTPP progress, the possibility of lifting SPS measures is also increasing, along with the need for corresponding research. As part of a proactive response to the lifting of SPS measures, this study intended to analyze the potential demand for apples and pears, which are items subject to import bans.
 In this paper, it is estimated the potential prices that may occur when the SPS measures are lifted, focusing on major countries that could be import sources for apples and pears, and identified the preference for imported fruits by country of origin. As a result of the analysis, it is expected that prices of imported apples are 23.6% to 54.8% lower than for domestic apples. In the case of imported pears, the prices are expected to be 25.2% to 65.2% lower than for domestic pears. The estimated prices of the fruits were different according to their country of origin, and the ranges of price increase and decrease were different depending on the item. The analysis results imply that the preference for Asian fruits was relatively low, consumers preferred imported apples more than imported pears.

Systemic Risk in Global Agricultural Markets and Trade Liberalization under Climate Change: Synchronized Crop-Yield Change and Agricultural Price Volatility

Climate change will increase simultaneous crop failures or too abundant harvests, creating global synchronized yield change (SYC), and may decrease stability in the portfolio of food supply sources in agricultural trade. This study evaluated the influence of SYC on the global agricultural market and trade liberalization. The analysis employed a global computable general equilibrium model combined with crop models of four major grains (i.e., rice, wheat, maize, and soybeans), based on predictions of five global climate models. Simulation results show that (1) the SYC structure was statistically robust among countries and four crops, and will be enhanced by climate change, (2) such synchronicity increased the agricultural price volatility and lowered social welfare levels more than expected in the random disturbance (non-SYC) case, and (3) trade liberalization benefited both food-importing and exporting regions, but such effects were degraded by SYC. These outcomes were due to synchronicity in crop-yield change and its ranges enhanced by future climate change. Thus, SYC is a cause of systemic risk to food security and must be considered in designing agricultural trade policies and insurance systems.

Agricultural Market Liberalization and Household Food Security in Rural China

AbstractIn the 1990s, prior to its accession to the World Trade Organization, China dramatically reduced market distortions in agriculture. We use a panel of 6,770 rural households from 1989 to 2000 to ask whether agricultural market liberalization affected rural household food security as measured by the share of calories from non‐staples. Given that not all households may be able to take advantage of new market opportunities, we focus on the distributional effect of market liberalization. Unlike most previous research on the effects of liberalization, we consider the effects of liberalization on both farm and off‐farm income. We find that liberalization primarily improves household food security by increasing off‐farm income, and the effects vary greatly by initial food security status and producer types. While many households benefit from liberalization, some food‐insecure households producing import‐competing products have lower food security as a result of agricultural market liberalization.

Региональные и мегарегиональные торговые соглашения: торговля сельскохозяйственной продукцией в Транстихоокеанском партнерстве

Mega-regional trade agreements (MRTAs) have appeared in response to the prolonged stagnation of the multilateral trading system ruled by the World Trade Organization (WTO). Although this issue has stimulated research in international integration, the specifics of MRTAs have not yet been sufficiently investigated. This article therefore assesses the multilateralization potential of regional commitments using the example of the Trans-Pacific Partnership (TPP). It includes commitments in market access liberalization made in regional trade agreements (RTAs) and in intraregional agricultural trade liberalization under the TPP.The central research problem is to identify the regional liberalization commitments that might be promoted to the level of the WTO. The authors use the methodology devised by the Organisation for Economic Co-operation and Development for assessing the potential multilateralization. RTA and MRTA commitments are grouped in two policy areas: WTO-plus (going beyond the normal provisions of the WTO) and WTO-beyond (dealing with issues going beyond the WTO). The TTP is scrutinized in the context of intraregional agricultural trade liberalization.MRTAs can raise regional commitments to the global level because of their large membership, regulatory transparency and high levels of implementation. The multilateralization of regional agreements is expected in services and investments as well as in various aspects of technical regulation. The key features of implementing RTA’s WTO-plus and WTO-beyond commitments in intraregional agricultural trade are discussed. Most RTAs have liberalized tariffs beyond the WTO Agreement on Agriculture (WTO-plus), but only a few have strengthened disciplines in non-tariff barriers and implemented WTO-beyond commitments for export restrictions and export subsidies. The TPP parties are a diverse group in terms of involvement in global agricultural trade and applied tariffs on agriculture and food. The TPP provides the record in eliminating tariffs for agricultural products while keeping a number of exceptions for sensitive products and long implementation periods. Agricultural market liberalization under the TPP is achieved mostly through eliminating tariffs than by renewing non-tariff barriers. The TPP parties share the objective of implementing WTO commitments by supporting the global agricultural trade reform on export subsidies and export bans, and agree to incorporate WTO-plus and WTO-beyond obligations.

Risk management in fruit and vegetable production in Germany

Increasing risk exposure for horticultural farms is a consequence of structural change, agricultural market liberalization and associated risks, and climate change. These developments have led to the increased importance of risk management in fruit and vegetable production in Germany. However, few risk management studies cover this area adequately. This study provides an overview of the risk management process for fruit and vegetable farms. After a discussion of relevant risk sources, the impact of price and production risk on revenue volatility for selected fruit and vegetable crops is presented based on variance decomposition. Finally, a systematic overview of currently available risk management instruments for fruit and vegetable farms is provided. Results indicate that there is a wide range of relevant risk sources. In this context, the strong dependence of producer prices on quality characteristics is noted. Revenue volatility analysis shows that the risk profile differs from crop to crop indicating the need for crop specific risk management strategies. The analysis of available risk management instruments shows that farmers can implement several instruments to manage production risks. However, insurance is only partly available. There are only a few instruments available to manage price risks. Accordingly, it is important to develop appropriate price risk management strategies to cope with increasing market risks.

Effects of Agricultural Policy Change on Maize Supply in Developing Countries: A Comparative Study of Kenya and Zambia

The impact of agricultural market liberalization on maize output in Kenya and Zambia and its effect on food security in these countries is evaluated in th is paper. The findings suggest a weak policy influe nce on maize output, but the precipitation and acreage var iables stand out as core determinants of maize outp ut. Overall, the obtained results, agricultural markets in general, and the maize sub-sector in particular , responded more positively to implemented policies i n Kenya, than in Zambia. Pre-existing economic structures would have contributed to the outcome. E ffective policy implementation would have to be tailored to meet regional needs and local condition s. Region and sector dynamics were not considered when formulating and implementing structural adjustment policies in the 1980s. It can be inferred from the study that countries with strong economic insti tutions performed better than those which had weak ones.

From market liberalization to market development: The need for market institutions in Ethiopia

Agricultural market liberalization in the developing countries is entrusted with the objective of increasing agricultural production through improving the economic incentives of farmers and the participation of the private sector in economic activities. Nevertheless, the impact of market liberalization on agricultural production may be limited due to high price risks and high transaction costs faced by economic agents, unless the markets have vested mechanisms to control such problems. Markets fulfill such controlling functions only when they are developed. To such extent, market liberalization is only a necessary but not a sufficient condition to achieve policy objectives sought from the reform process. This study investigates the behavior of grain prices, grain markets, and farmers for a staple food crop around Ambo, Ethiopia, with the purpose of understanding the decision-making environment of economic agents observed during the post-liberalization period. The major evidence is of a liberalized grain marketing system that lacks important institutions and public goods necessary to reduce high price risk and high transaction costs faced by economic agents. In view of this, it is recommended to develop the markets through developing the market institutions and through providing the public goods necessary for an efficient marketing system.

Delivering on Doha: farm trade and the poor

It is frequently asserted that agricultural liberalization by the United States, European Union, and other rich countries is the key to making the global trade negotiations launched in Doha, Qatar, in 2001 a development round. Agricultural market liberalization is essential in achieving a successful Doha Round agreement because these are the most protected markets remaining in most rich countries. But the implications for developing countries, especially the poorest, are more complex than the current debate suggests. This volume examines the structure of agricultural support in rich countries and explores the challenges as well as opportunities that developing countries might face if the Doha Round succeeds in reforming OECD agriculture policies.

Modeling spatial price transmission in the grain markets of Ethiopia with an application of ARDL approach to white teff

AbstractFollowing the agricultural market liberalization policy, there is an emerging grain market structure in Ethiopia in which the central wholesale market exhibits concentration of power and spatial integration with the local markets. Due to this, it is hypothesized that the central wholesale market influences the long‐run price movements in the local markets. The relationship can be modeled as spatial price equilibrium with the aim to guide subsequent policy decisions with regard to public intervention in the post‐liberalization period. In this study, we modeled the spatial equilibrium relationship between the producer and the wholesale prices of white teff, a major staple in Ethiopia, using the autoregressive distributed lag modeling approach to cointegration analysis. First, the existence of a nonspurious long‐run relationship in levels between the producer prices in the local market and the wholesale prices in the central market is confirmed. Second, the long‐run relationship and the error correction model for the producer price are estimated. The results reveal that the wholesale price of white teff in the central consumer market is a major short‐ and long‐run determinant of the producer price in the local supply markets. Therefore, the institutional role of the government with the aim of improving producers' marketing margin and the overall performance of the grain markets in the post‐liberalization period can be influenced through targeted interventions at the central wholesale market.

The sequencing of reform policies in China's agricultural transition*

AbstractThis paper provides evidence regarding gains due to agricultural market liberalization in China. We empirically identify the different effects that incentive and farm restructuring reforms and gradual market liberalization have on China's agricultural economy during its transition period. We find that average gains within the agricultural sector due to reforms that improved incentives and increased decision‐making authority of producers exceed gains due to market liberalization by a large margin. Our method of analyzing the effects of transition policies on economic performance can be generalized to other reform paths in other transition economies.

Spatial Integration of Maize Markets in Post-liberalised Uganda

Using weekly price data for two sub-periods, this paper analyzes how Ugandan maize market performed in the years following agricultural market liberalization in the early 1990's. For each time period, the extent of integration, causality among spatial locations, and relative importance of spatial locations in price formation are examined. The extent of integration, defined as a set of markets that shares common long-run price information, and the causal relationships among markets have been tested within Johansen's cointegration framework. The relative importance of each market locations is examined by estimating the common trend coefficients with a dynamic vector moving average model. Results indicate that, while there has been an overall improvement in spatial price responsiveness, the northern districts, which have been in a state of insurgency since 1986, continue to lack integration with major consumption markets in the central region. Causality test results show that compared to the 1993-1994-time period, representing the early years of liberalization, interdependence among markets has increased. Estimates of the common integrating trend suggest that public policies, such as price stabilization, can have desired impacts by targeting a small number of locations. These results are consistent with recently conducted household and market surveys in the country. Author's Abstract

Reforms, Investment, and Poverty in Rural China

Shenggen FanInternational Food Policy Research Institute and Institute of AgriculturalEconomics of the Chinese Academy of Agricultural SciencesLinxiu ZhangCenter for Chinese Agricultural Policy of the Chinese Academy of SciencesXiaobo ZhangInternational Food Policy Research InstituteI. IntroductionChina is one of the few countries in the developing world that has madeprogress in reducing its total number of poor over the past 25 years.

Spatial Integration of Wheat Markets in India: Evidence from Cointegration Tests

Using the maximum likelihood method of cointegration, this paper empirically evaluates intra-state and inter-state spatial integration of wheat markets in India. The cointegration tests provide strong evidence in favour of spatial integration of the regional wheat markets. Even though the regional markets are geographically dispersed, the prices across different market centres within and across the selected states have exhibited long-run spatial linkages, suggesting that all the exchange locations are integrated and the prices provide relevant market signals. There are several implications of these results for agricultural price policy and food market liberalization programmes.

Sequencing and the Success of Gradualism: Empirical Evidence from China's Agricultural Reform

This paper provides evidence regarding gains to agricultural market liberalization in China. We empirically identify the different effects that incentive reforms and gradual market liberalization have on China's agricultural economy during its transition period. We find that average gains within the agricultural sector to incentive reform exceed gains to market liberalization by a factor of ten. Our method of analyzing the effects of transition policies on economic performance can be generalized to other reform paths in other transition economies.

Responsiveness, Flexibility, and Market Liberalization in China's Agriculture

been at most only limited gains from market liberalization. If one were to take the findings of this admittedly scant literature seriously, it would appear as if there is at most only a relatively small impact from market reforms in China. We believe there are three possible, but only one plausible, explanations for the findings. First, if market liberalization actually contributes little to no growth or increases in output or incomes, this would, of course, in part explain why economies that lead reform with market liberalization do not experience significant gains. Theory and the experiences of other economies in other settings, however, would argue against such an interpretation. Second, it could be that China's agricultural market liberalization has just proceeded so slowly that it is still too early for output to have been positively affected by market liberalization. However, as seen above, the record on the market expansion and the observations of many researchers would not support this view.

Agricultural Market Liberalization and Instability of Domestic Agricultural Markets: The Case of the CAP

American Journal of Agricultural EconomicsVolume 82, Issue 3 p. 718-726 Proceeding Agricultural Market Liberalization and Instability of Domestic Agricultural Markets: The Case of the CAP Stanley R. Thompson, Stanley R. Thompson professor in the Department of Agricultural Environmental and Development Economics Ohio State University Senior authorship is shared equally. Major parts of this article were written when the first author was a guest professor at the Institute of Agricultural Policy and Market Analysis, University of Giessen, Germany. Funding from the Deutsche Forschungsgemeinschaft for this stay is gratefully acknowledged. Thanks are due to R. Sexton for very helpful suggestions on an earlier draft.Search for more papers by this authorRoland Herrmann, Roland Herrmann professor in the Institute of Agricultural Policy and Market Research University of Giessen, GermanySearch for more papers by this authorWolfgang Gohout, Wolfgang Gohout professor in the Statistics and Economics FH Pforzheim, University of Applied Science, GermanySearch for more papers by this author Stanley R. Thompson, Stanley R. Thompson professor in the Department of Agricultural Environmental and Development Economics Ohio State University Senior authorship is shared equally. Major parts of this article were written when the first author was a guest professor at the Institute of Agricultural Policy and Market Analysis, University of Giessen, Germany. Funding from the Deutsche Forschungsgemeinschaft for this stay is gratefully acknowledged. Thanks are due to R. Sexton for very helpful suggestions on an earlier draft.Search for more papers by this authorRoland Herrmann, Roland Herrmann professor in the Institute of Agricultural Policy and Market Research University of Giessen, GermanySearch for more papers by this authorWolfgang Gohout, Wolfgang Gohout professor in the Statistics and Economics FH Pforzheim, University of Applied Science, GermanySearch for more papers by this author First published: 01 August 2000 https://doi.org/10.1111/0002-9092.00068Citations: 10 Senior authorship is shared equally. Major parts of this article were written when the first author was a guest professor at the Institute of Agricultural Policy and Market Analysis, University of Giessen, Germany. Funding from the Deutsche Forschungsgemeinschaft for this stay is gratefully acknowledged. Thanks are due to R. Sexton for very helpful suggestions on an earlier draft. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Citing Literature Volume82, Issue3August 2000Pages 718-726 RelatedInformation

From Social Negotiation to Contract: Shifting Strategies of Farm Labor Recruitment in Tanzania Under Market Liberalization

This paper highlights some of the contradictions and idiosyncrasies of agricultural market liberalization in Africa through the case study of Tanzania. Based on qualitative research and survey data collected in the country in 1995–96, this article suggests that one of the results of economic reforms has been a passage from social negotiation to contractual negotiation as the main vehicle for access to resources. Research findings show that farmers have shifted from recruiting farm labor through social networks to recruiting hired farm labor, and that socioeconomic inequality is increasing. The author concludes that farming households are becoming more vulnerable to natural and economic shocks, and calls for policy solutions to address these problems.

Agricultural market liberalization: a case study of the Western Cape Province in South Africa

This paper attempts to estimate the production, price, welfare and employment effects of some of the changes in the agricultural marketing system on the Western Cape Province of South Africa, utilizing a regional linear programming model of the agricultural sector of the region. The model includes supply, demand and production risk, and simulates the present agricultural production structure well. Market and trade liberalization have major impacts on the structure of Western Cape agriculture, particularly the grain and livestock sub-sectors, with only marginal and mostly insignificant effects on horticultural products. © 1998 John Wiley & Sons, Ltd.

Stagnation Without Equity: Patterns of Growth and Inequality in China's Rural Economy

When China's leaders launched rural reforms in the late 1970s, they acknowledged the nation's need to modify its commitment to egalitarianism.1 Slogans such as Tt is glorious to be rich!' and 'Some areas will lead; others will follow!' signalled this fundamental shift in ideology. Leaders backed up these exhortations with a series of concrete policy actions ? establishing the Special Economic Zones and implementing the East Coast-first policy, introducing financial reforms, and initiating the rural industrialization movement. In China's version of the 'trickle down' theory, certain core areas were to take the lead in the modernization process and provide models for other areas to later emulate. Adopting strategies that had been employed

Maize pricing policy in Eastern and Southern Africa

Public sector attempts to determine official producer and consumer prices suffer from a number of problems, made more apparent by the process of agricultural market liberalization. Six measures to ease the financial problems of policy adjustment are identified, covering the clarification of the post-reform role of official prices, the move towards economically based pricing structures, the introduction of within-year price flexibility to reduce the costs of intervention, the incorporation of macroeconomic linkages into the procedures for price setting, the use of multi-annual analysis and modelling for price determination, and the articulation of modified systems of price support as marketing board networks are cut back. An important conclusion is the need for a gradual, phased approach to price reform.