Minimum Price Policy Research Articles

Land price regulation and firms' global value chain position: Evidence from China

Exorbitant land prices have been a significant constraint on firm growth; however, few studies have explored their effect on firms' global value chain (GVC) positions. By treating the 2007 minimum price policy for industrial land as a quasi-natural experiment, this study estimates the impact of land price regulations on firms' GVC positions. Using a difference-in-differences method with continuous treatment intensity, we find that industrial land price regulation has a remarkably negative effect on firms' GVC positions. This effect is primarily observed in small- and medium-sized enterprises and private enterprises. The mechanism analysis suggests that industrial land price regulation has significantly increased the cost of land purchases by firms, squeezing their investment in innovation and reducing the quality of intermediate inputs, thereby degrading their position in GVCs.

The impact of Chinese rice support policies on rice acreages

Declining arable land and yield stagnation pose serious challenges to food security in China. Since 2004, the Chinese government has introduced rice support policies to stimulate rice production. A bundle of incentives, including a minimum procurement price, were introduced. Whether they were effective? Rice acreages have increased since the start of this policy, which could also result from rising rice price levels both nationally and globally. Using a natural experiment created by the minimum procurement price policy being introduced in a selected set of Chinese regions, we use a dynamic fixed effects model to perform a difference-in-differences analysis on the effectiveness of these rice support policies. We find that indica rice acreages do respond to changes in the rice prices, and, controlling for rice prices, that China’s rice support policies were effective in increasing rice acreages of both early and late indica after 2004. The paper concludes with policy implications.

How New Zealand adults who smoked understand novel tobacco ‘endgame’ policies. Qualitative analysis using the associative propositional evaluation model to determine comprehension.

Tobacco smoking is a leading cause of early death. In 2022, New Zealand legislated to introduce three previously untried tobacco ‘endgame’ policies aimed at reducing demand for cigarettes and restricting supply. This study aimed to determine how a key stakeholder group, NZ adults with no intent or low belief that they could stop smoking by 2025, understood proposals to restrict nicotine in combustible tobacco and the number of tobacco retailers to a very low level, annually raise the age of purchase, set minimum prices, and ban filters.The Affective Propositional Evaluation model was used to analyze participants' comprehension of the policies. That model and discourse analysis worked well for distinguishing which policies were familiar to participants and for determining participants' understanding. Responses and discourse on the novel policies (denicotinization, sinking lid on age of purchase, filter ban), the semi-familiar policy (reducing the number of retailers), and most familiar minimum pricing policy differed qualitatively. Compared to familiar policies evaluative judgements of the novel policies were often inconclusive. If approval of a novel policy was expressed, propositional evaluations suggested that approval was for the intent (to prevent young people from smoking) rather than the means to achieve it. The results complement the ‘endgame’ policy literature, adding the strength of feelings towards, and nuances of doubt about, the potential effects and unintended consequences and provides useful information for formulating metrics for future evaluation of ‘endgame’ policies.

Understanding the effectiveness of minimum support price policy on area, production and productivity of oilseed crops in India

The purpose of the study was to investigate the impact of the Minimum Support Price (MSP) policy on the expansion of oilseed cultivation area, production and productivity in India, aiming to address the country’s heavy reliance on costly edible oil imports, which exceed 65 percent of its total requirements, costing over `70,000 crores annually. The study aimed to assess how the implementation of the MSP policy could contribute to increasing domestic oilseed production and reducing the dependence on imports.The data on MSP, oilseed cultivation area, production, and productivity was collected for the period 1985 to 2020. Compound Annual Growth Rate, correlation analysis, and scatter plots were utilized to analyze the trends and associations between MSP and the area, production and yield of key oilseed crops in India, namely Groundnut, Sunflower, Rapeseed-Mustard, Soybean, and Safflower. The study revealed that there was a positive and statistically significant Compound Annual Growth Rate (CAGR) between the Minimum Support Price (MSP) and yield for all five oilseed crops. Additionally, a positive and significant trend was observed in the CAGR of Soybean and Rapeseed-Mustard for both area and production. The scatterplots and Spearman correlation analysis further supported these findings, indicating a strong positive correlation between the MSP of Soybean and Rapeseed-Mustard with their respective area, production, and yield. It was also noted that the government provided higher MSP support to oilseed crops such as Sunflower, Safflower, and Groundnut, where a negative CAGR in the area was observed.

Estimating the Effects of Hypothetical Alcohol Minimum Unit Pricing Policies on Alcohol Use and Deaths: A State Example.

Alcohol minimum unit pricing (MUP) policies establish a floor price beneath which alcohol cannot be sold. The potential effectiveness of MUP policies for reducing alcohol-attributable deaths in the United States has not been quantitatively assessed. Therefore, this study estimated the effects of two hypothetical distilled spirits MUP policies on alcohol sales, consumption, and alcohol-attributable deaths in one state. The International Model of Alcohol Harms and Policies tool was used to estimate the effects of two hypothetical MUP per standard drink policies (40-cent and 45-cent) pertaining to distilled spirits products at off-premises alcohol outlets in Michigan during 2020. Prevalence estimates on drinking patterns among Michigan adults were calculated by sex and age group. Prices per standard drink and sales of 9,747 spirits products were analyzed using National Alcohol Beverage Control Association data. Analyses accounted for other alcoholic beverage type sales using cross-price elasticities. Increasing the MUP of the 3.5% of spirits with the lowest prices per standard drink to 40 cents could reduce total alcohol per capita consumption in Michigan by 2.6% and prevent 232 (5.3%) alcohol-attributable deaths annually. A 45-cent MUP would affect 8.0% of the spirits and reduce total alcohol per capita consumption by 3.9%, preventing 354 (8.1%) deaths. Modestly increasing the prices of the lowest-priced spirits with an MUP policy in a single state could save hundreds of lives annually. This suggests that alcohol MUP policies could be an effective strategy for improving public health in the United States, consistent with the World Health Organization's recommendation.

The impact of tax and price reforms on companies’ prices in a complex cigarette tax system

ABSTRACT This study analyzes how changes in various aspects of excise tax systems, including minimum price laws and differential price tiers for excise taxation jointly rather than independently, influence firms’ pricing decisions. We apply our model to Indonesia, where the tobacco excise tax system is complex, with several excise tax tiers within and across cigarette types. We use a comprehensive database of prices over the past decade for all cigarettes manufactured and sold in Indonesia, obtained from Indonesian Customs. We find that the impact of excise taxes on prices hides important effects of other pricing policies that are typically ignored in research, which either focus on the independent impacts of excise tax or do not distinguish between cigarette types. Specifically, minimum price policies have a larger impact than excise taxes on pricing decisions for machine-made clove cigarettes (kretek), while excise tax changes have a larger effect on prices for machine-made, non-clove (white) cigarettes. For cigarette types and brands that are more likely to feature a relatively more elastic demand (hand-rolled kretek), companies keep prices close to the minimum price. The results imply that a multi-tiered tobacco excise tax system likely generates distortions that limit government policies’ effectiveness in reducing tobacco consumption.

Expected and actual responses to minimum unit pricing (MUP) for alcohol of people drinking at harmful levels in Scotland

Background This paper considers the extent to which people drinking at harmful levels responded to minimum unit pricing (MUP) in Scotland in the way they, family members and those providing services anticipated they would. It examines data taken from a larger evaluation of the impact of MUP on people who are drinking at harmful levels. Methods Qualitative interview data, (utilizing interviews and focus groups, with individuals, treatment services, and family members) was generated prior to the implementation of MUP in Scotland to provide insights into anticipated responses and comparable data generated across an extended 19-month period post-implementation and provided insights into actual responses. Results Overall, the data showed consistency between anticipated and actual responses, with fewer differences observed. In line with anticipated responses, many drinkers switched from cheap, strong ciders to other alcohol products, notably vodka. They consistently responded to the decrease in alcohol affordability by utilizing existing behavior such as managing finances and prioritizing spends on alcohol, including borrowing money, foregoing essentials, and using savings. There was less evidence of anticipated harmful consequences of MUP occurring, such as increased crime, switching to other drugs, or examples of acute withdrawal. Conclusions Drinkers and those living and working with them, have a good command of how alcohol affordability is maintained or impacts on expenditure and other choices, and how they respond to any decrease in affordability including the introduction of minimum price policies.

ANALYSIS OF COMPETITIVENESS AND SUSTAINABILITY OF CASSAVA COMMODITY IN LAMPUNG TIMUR REGENCY

The purpose of the study was to determine the competitive and comparative advantages and sustainability of cassava farming in East Lampung Regency. The population of cassava farmers is 1,100 farmers using the Slovin formula, so a sample of 92 farmers is obtained. Sampling was done by purposive sampling technique. Data analysis used PAM (Policy Analysis Matrix) analysis. The results of the study were the PCR coefficient value of 0.3397 and the DRCR coefficient value of 0.1216. The coefficient value < 1 indicates that cassava farming in East Lampung Regency has a competitive advantage and a comparative advantage. The government needs to set a Regional Minimum Price (HMR) policy of Rp. 1,150/kg which aims to improve the welfare of farmers.

Commentary on Brennan et al.: Pros and cons of minimum unit price for alcohol.

Commentary on Brennan et al.: Pros and cons of minimum unit price for alcohol.

Spatial Correlation Evolution and Driving Factors of Wheat Production in China Based on Social Network Analysis

Understanding the spatial correlation network of inter-provincial wheat production is vital for ensuring food security and achieving sustainable agricultural development in China. However, the spatial correlation characteristics of wheat production and their determinants remain unclear. In this study, an improved gravity model was used to calculate the spatial correlation of inter-provincial wheat production in China based on available panel data from 2000 to 2020. The spatial-temporal evolution characteristics and the driving factors of the spatial correlation network of inter-provincial wheat production in China were analyzed using social network analysis (SNA) and a quadratic assignment procedure (QAP). The findings indicated that (1) the spatial correlation of inter-provincial wheat production first increased and then decreased. The network density increased from its lowest value (0.2598) in 2000 to its maximum value (0.2782) in 2016 and then continued to fluctuate. (2) The spatial correlation network of inter-provincial wheat production presented a “core-periphery” distribution pattern for the major wheat-producing areas (such as Jiangsu, Anhui, and Hubei) and non- major wheat-producing areas (such as Jilin, Qinghai, Guangxi, and Beijing), and the roles of the blocks in the network varied with time and space. (3) The implementation of grain-related policies (such as the abolition of agricultural taxes, the implementation of industry nurturing agriculture, and the minimum grain purchase price policy) positively affected the development of the spatial correlation network of wheat production. Since the implementation of the minimum purchase price policy for wheat in 2006, the network density reached its maximum value (0.2782), the network efficiency reached its minimum value (0.5985), and the stability of the network structure greatly improved. (4) The interactions between the internal natural conditions and the external socioeconomic factors promoted the construction of a spatial correlation network for wheat production. The differences in geographical adjacency, land resources, temperature, and sunlight hours were all significant at the 1% level, highlighting the substantial impact of these factors on the spatial correlation intensity of wheat production in China. This study provides a reference for the development of cooperative cross-regional wheat production and the formulation of distinct policies for the production of wheat and other grains.

Impact of minimum unit pricing on alcohol-related hospital outcomes: systematic review

ObjectiveTo determine the impact of minimum unit pricing (MUP) on the primary outcome of alcohol-related hospitalisation, and secondary outcomes of length of stay, hospital mortality and alcohol-related liver disease in...

Is Minimum Support Price Effective in India? Evidence from State-wise Paddy Procurement

Aims: The paper tries to examine the effectiveness of the minimum support price (MSP) policy based on empirical data on price deviations as well as the procurement of paddy crops by various agencies. The cost and gross margin of cultivation are also analysed to add further reliability to the overall assessment of MSP policy.
 Data and Methodology: The effectiveness of price policy is examined by studying farm harvest price (FHP) with respect to MSP of Paddy. We have calculated the deviations of FHP of paddy from MSP for the entire study period of 1996-2016, where the positive deviations are taken as an indicator of the effectiveness of price policy. Our study has analysed the procurement data published by the Food Corporation of India (FCI) and the Ministry of Agriculture and Farmers welfare. We also used the unit-level data from the ‘Situation Assessment Survey of Agricultural Households’, 2012-13 of NSSO.
 Results: The MSP policy is found to be effective in Kerala, Madhya Pradesh, and Punjab but ineffective in other major rice-producing states across the country. And in states like Himachal Pradesh, Uttar Pradesh, Bihar, Assam, West Bengal, Jharkhand, Odisha, Andhra Pradesh, Karnataka, and Tamil Nadu, a vast majority of the medium, semi-medium, and small farmers sell their paddy to private agencies, thus making MSP policy for paddy in those states a complete failure. In states such as Haryana and Maharashtra, large farmers are found selling a significant portion of their total marketed surplus to processors.
 Conclusion: Overall, at the national level, procurement by government agencies (which stands at 17.2 percent) is far from satisfactory. The policy implication calls for enhancing paddy procurement by government agencies across the farming groups rather than concentrating only on medium and large farmers.

Anatomia da cadeia de valor do babaçu para suporte a políticas públicas voltadas a comunidades tradicionais agroextrativistas no Vale do Mearim, Maranhão, Brasil

Abstract: Babassu-nuts are one of the most important socio-biodiversity products in Brazil. Detailed and reliable information on the babassu value chain is essential for local and regional public policies to support the economy associated with the extraction of this product and vulnerable social groups that depend on it for survival. This study presents a methodology to analyze the babassu value chain and discusses results obtained in 2021 from the application of this methodology in Vale do Mearim, Maranhão, the region with the highest babassu production in the country. The study contributes to the evaluation of the accuracy of official statistics on production and involvement in babassu extractive activity and discusses implications for the most relevant public policy for non-timber forest products in Brazil, the Minimum Price Policy for Socio-biodiversity Products (PGPM-Bio). In a territory comprising 25 municipalities, we interviewed about 640 local traders, who purchased 6,000 tons of almonds from 9,000 extractivist families, with an annual average of 661 kg per family. These local traders passed the production to 23 regional traders, who transported it to 11 industrial pressing units for oil production, 8 of them located in the same territory. According to the field research, the volume commercialized corresponds to 27% of the official estimate for the previous year, denoting a reduction in production and in the number of persons engaged in extraction activity much higher than the downward trend indicated by official statistics. Considering that determining the Gross Domestic Product of municipalities, as well as planning and monitoring the implementation of policies such as PGPM-Bio should take into account outreach indicators based on official statistics, the analyses suggest reviewing procedures to obtain annual estimates of babassu extraction.

Effectiveness of subnational implementation of minimum unit price for alcohol: policy appraisal modelling for local authorities in England.

Evidence exists on the potential impact of national level minimum unit price (MUP) policies for alcohol. This study investigated the potential effectiveness of implementing MUP at regional and local levels compared with national implementation. Evidence synthesis and computer modelling using the Sheffield Alcohol Policy Model (Local Authority version 4.0; SAPMLA). Results are produced for 23 Upper Tier Local Authorities (UTLAs) in North West England, 12 UTLAs in North East England, 15 UTLAs in Yorkshire and Humber, the nine English Government Office regions and England as a whole. Health Survey for England (HSE) data 2011-13 (n = 24 685). Alcohol consumption, consumer spending, retailers' revenues, hospitalizations, National Health Service costs, crimes and alcohol-attributable deaths and health inequalities. Implementing a local £0.50 MUP for alcohol in northern English regions is estimated to result in larger percentage reductions in harms than the national average. The reductions for England, North West, North East and Yorkshire and Humber regions, respectively, in annual alcohol-attributable deaths are 1024 (-10.4%), 205 (-11.4%), 121 (-17.4%) and 159 (-16.9%); for hospitalizations are 29 943 (-4.6%), 5956 (-5.5%), 3255 (-7.9%) and 4610 (-6.9%); and for crimes are 54 229 (-2.4%), 8528 (-2.5%), 4380 (-3.5%) and 8220 (-3.2%). Results vary among local authorities; for example, annual alcohol-attributable deaths estimated to change by between -8.0 and -24.8% throughout the 50 UTLAs examined. A minimum unit price local policy for alcohol is likely to be more effective in those regions, such as the three northern regions of England, which have higher levels of alcohol consumption and higher rates of alcohol harm than for the national average. In such regions, the minimum unit price policy would achieve larger reductions in alcohol consumption, alcohol-attributable mortality, hospitalization rates, NHS costs, crime rates and health inequalities.

Impact of minimum unit pricing on youth alcohol consumption: insights from Lebanon

This paper analyses the impact of introducing an alcohol minimum unit pricing policy on youth's off-premise alcohol consumption. We rely on price elasticities derived using stated preference alcohol purchase data from a survey of 1024 university students in Lebanon. Selectively targeting drinks with high ethanol concentration by applying a minimum unit pricing (MUP) corresponding to the maximum price that respondents are willing to pay per beverage achieves a reduction in ethanol intake close to 0.23 l/month (∼28% of pre-MUP ethanol intake). Imposing a flat MUP corresponding to the average price respondents are willing to pay for all alcoholic beverages decreases ethanol intake by nearly half the reduction from the previous targeted MUP. This work provides evidence in favour of MUP in conjunction with taxation capable of substantially reducing alcohol consumption. We also document a positive welfare benefit of MUP.

Impact of the wheat minimum purchase price policy on chemical fertilizer application intensity: Based on the moderation effects of farmland property rights

Impact of the wheat minimum purchase price policy on chemical fertilizer application intensity: Based on the moderation effects of farmland property rights

Prospective Analysis of Minimum Pricing Policies to Reduce Excessive Alcohol Use and Related Harms in U.S. States

Increasing the price of alcohol is an effective strategy for reducing excessive consumption and alcohol-related harms. Limited research is available on how the establishment of a minimum price for alcoholic beverages might be an effective strategy to reduce this health risk behavior and what impact that might have in the United States. This study describes alcohol minimum pricing (MP) policy options for consideration in the United States, assesses implementation feasibility and effectiveness, and discusses implications for implementation. Three alcohol pricing policy options for reducing excessive drinking were compared in this prospective analysis: alcohol taxation (status quo in states), minimum unit pricing (MUP) by unit of alcohol (e.g., 0.6 oz. [14 g] of pure alcohol), and MP by specified amount of an alcoholic beverage type (e.g., liter of beer). For each policy, five implementation-related domains were analyzed: political feasibility, public acceptability, implementation cost, health equity, and legal feasibility. Effectiveness was also evaluated based on literature. Alcohol MP policies, particularly MUP, could be feasible to implement and cost-efficient for reducing excessive alcohol consumption and related harms in the United States. MP policies are likely to have modest public acceptability in the United States. Although the political feasibility of MP policies is uncertain and would likely vary across states, international research suggests that MP might be a feasible pricing strategy that can be used in conjunction with alcohol taxes. Alcohol MP can be part of a comprehensive approach for reducing excessive drinking and related harms; however, factors such as state-level differences in alcohol control regulation may influence policy implementation.

Research on the Improvement of Food Support Policy Evaluation System under the Background of Food Security Strategy

Under the background of social transformation and upgrading, China has put forward higher requirements for the safety and efficiency of food production. Because the current grain production is faced with imperfect infrastructure, less investment in science and technology, high demand for talents, backward grain structure and other conditions, through the establishment of food security strategy, China has provided food support through direct subsidies, subsidies for superior varieties, minimum purchase price policies and other means, which has guaranteed farmers' grain cultivation and mapped out the way for the transformation of grain production.

A wastewater-based assessment of the impact of a minimum unit price (MUP) on population alcohol consumption in the Northern Territory, Australia.

To test if there was a reduction in alcohol consumption in wastewater samples in the Northern Territory of Australia after the implementation of a minimum unit alcohol price policy (MUP) in October 2018. Between August 2016 and February 2020, wastewater samples were collected across 66 sites in the Northern Territory and all other states and territories in Australia. Samples were collected every 2months in capital cities and every 4months in regional places during this period. Overall, 4917 samples were taken (2816 before MUP and 2101 after). The number of standard drinks per 1000 people per day in the respective catchment areas was estimated based on the concentration of an alcohol-specific metabolite, ethyl sulphate in the samples (using the excretion factor of ethyl sulphate, the flow of wastewater entering the wastewater treatment plants and the population of each wastewater catchment). Results from a linear mixed model showed that there was a large drop in alcohol consumption immediately after the MUP in Northern Territory [estimated drop=1231, 99% confidence interval (CI)=830, 1633; 38.75%]. There was no significant drop in all other states/territories except for Queensland, which showed a significant but much smaller drop (estimated drop: 310; 99% CI=114, 550). One year after the MUP, the drop narrowed to 520 (99% CI=189, 851) and was no longer statistically significant in February 2020 (15months after MUP; estimated drop=283, 99% CI=-114, 681). Per-capita consumption of alcohol appears to have decreased substantially in the Northern Territory of Australia immediately after the implementation of a minimum unit price but consumption steadily recovered and almost returned to the pre-MUP consumption level after 15months.

Operacionalização da política de preços mínimos para os produtos da sociobiodiversidade

Objetiva-se analisar a participação econômica de dez produtos da sociobiodiversidade na economia brasileira, verificando sua espacialização no território nacional e examinando a operacionalização da Política de Preços Mínimos para a Sociobiodiversidade (PGPM-Bio). Obtiveram-se dados sobre o valor e a quantidade de produção dos dez produtos sob análise (açaí, babaçu, borracha, castanha-do-pará, carnaúba, mangaba, pequi, piaçava, pinhão, umbu) por meio do IBGE, e as informações acerca da PGPM-Bio, da CONAB. Os resultados apontaram que a extração desses recursos se sobressaiu nas Regiões Norte e Nordeste, e os principais itens, conforme o valor produzido, foram o açaí e o pó de carnaúba. Os maiores beneficiários da PGPM-Bio foram Maranhão, Bahia e Amazonas, respectivamente, com o babaçu, piaçava e borracha. Ademais, empregou-se menos da metade dos recursos destinados ao pagamento de subvenções.