Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

National barriers to trade are often varied to insulate domestic markets from international price variability, especially following a sudden spike. This paper explores the extent of that behavior by governments in the case of agricultural products, particularly food staples whose prices have spiked three times over the past four decades. It does so using new annual estimates since 1955 of agricultural price distortions in 75 countries, updated to 2008. Responses by food importers to upward price spikes are shown to be as substantial as those by food exporters, thereby weakening the domestic price-stabilizing effect of intervention by exporters. They also add to the transfer of welfare to food-surplus from food-deficit countries-the opposite of what is usually thought of when considering inter-sector trade retaliation. Phasing down World Trade Organization-bound import tariffs toward their applied rates would help reduce the legal opportunities for food-deficit countries to raise their import restrictions when international prices slump. To date there is no parallel discipline in the World Trade Organization that limits increases in export restrictions when prices spike upward, however. Bringing such discipline through new World Trade Organization rules could help alleviate the extent to which government responses to exogenous price spikes exacerbate those spikes.

Agricultural trade policies --- Climate Change Economics --- Commodity price stabilization --- Distorted incentives --- Domestic market insulation --- Economic Theory & Research --- Emerging Markets --- Food & Beverage Industry --- International Economics & Trade --- Markets and Market Access --- Price transmission

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Food prices in international markets spiked upward in 2008, doubling or more in a matter of months. Evidence is still being compiled on policy responses over the following two years, but lessons can be learned from the price spike in 1973, the magnitude and speed of which were similar to those experienced around the 2008 spike. In developing countries, policy responses to the earlier spike lowered the (negative) nominal assistance coefficient for agriculture by one-third between 1972 and 1974 before it was returned to the same level by 1976. That was twice the extent of the fall and recovery of the (positive) nominal assistance coefficient for high-income countries. However, the trade and welfare effects of those changes were much less for developing than high-income countries, suggesting the dispersion of distortion rates among farm industries decreased in developing countries. The adjustments were virtually all due to suspension and then reinstatement of import restrictions, with changes in export taxation by developing countries playing an additional (but minor) role during 1972-74. This beggar-thy-neighbor dimension of each government's food policies is worrying because it reduces the role that trade between nations can play in bringing stability to the world's food markets. More effort appears to be needed before a multilateral agreement to desist can be reached.

Climate Change Economics --- Commodities --- Commodity --- Commodity price --- Developing countries --- Domestic market --- Economic Theory & Research --- Emerging Markets --- Food & Beverage Industry --- Food price --- Food prices --- Free trade --- Government intervention --- Income --- Incomes --- Industry --- International markets --- International trade --- Low-income countries --- Macroeconomics and Economic Growth --- Market failure --- Market participants --- Markets and Market Access --- Monopoly --- Price movement --- Private Sector Development --- Stabilization policies --- World markets

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Food prices in international markets spiked upward in 2008, doubling or more in a matter of months. Evidence is still being compiled on policy responses over the following two years, but lessons can be learned from the price spike in 1973, the magnitude and speed of which were similar to those experienced around the 2008 spike. In developing countries, policy responses to the earlier spike lowered the (negative) nominal assistance coefficient for agriculture by one-third between 1972 and 1974 before it was returned to the same level by 1976. That was twice the extent of the fall and recovery of the (positive) nominal assistance coefficient for high-income countries. However, the trade and welfare effects of those changes were much less for developing than high-income countries, suggesting the dispersion of distortion rates among farm industries decreased in developing countries. The adjustments were virtually all due to suspension and then reinstatement of import restrictions, with changes in export taxation by developing countries playing an additional (but minor) role during 1972-74. This beggar-thy-neighbor dimension of each government's food policies is worrying because it reduces the role that trade between nations can play in bringing stability to the world's food markets. More effort appears to be needed before a multilateral agreement to desist can be reached.

Climate Change Economics --- Commodities --- Commodity --- Commodity price --- Developing countries --- Domestic market --- Economic Theory & Research --- Emerging Markets --- Food & Beverage Industry --- Food price --- Food prices --- Free trade --- Government intervention --- Income --- Incomes --- Industry --- International markets --- International trade --- Low-income countries --- Macroeconomics and Economic Growth --- Market failure --- Market participants --- Markets and Market Access --- Monopoly --- Price movement --- Private Sector Development --- Stabilization policies --- World markets

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Grapes --- Wine and wine making --- Varieties