trade policy coordination and food price volatility many countries adjust their trade policies counter cyclically with food prices to the extent that the use of restrictions by food exporting countries has occasionally threatened the food security of food importing countries these trade policies are inconsistent with the terms of trade motivation often retained to characterize the payoff frontier of self enforcing trade agreements as they can worsen the terms of trade of the countries that apply them this article analyzes trade policy coordination when trade policies are driven by terms of trade effects and a desire to reduce domestic food price volatility this framework implies that importing and exporting countries have incentives to deviate from cooperation at different periods the latter when prices are high and the former when prices are low since staple food prices tend to have asymmetric distributions with more prices below than above the mean but with occasional spikes a self enforcing agreement generates asymmetric outcomes without cooperation an importing country uses its trade policy more frequently because of the concentration of prices below the mean but an exporting country has a greater incentive to deviate from a cooperative trade policy because positive deviations from the mean price are larger than negative ones thus the asymmetry of the distribution of commodity prices can make it more difficult to discipline export taxes than tariffs in trade agreements

rethinking the global food crisis the role of trade shocks although fundamental factors were clearly responsible for shifting the world to a higher food price equilibrium in the years leading up the 2008 food crisis there is little doubt that when food prices peaked in june of 2008 they soared well above the new equilibrium price numerous arguments have been proposed to explain overshooting including financial speculation depreciation of the united states us dollar low interest rates and reductions in grain stocks however observations that international rice prices surged in response to export restrictions by india and vietnam suggested that trade related factors could be an important basis for overshooting especially given the very tangible link between export volumes and export prices in this paper we revisit the trade story by closely examining monthly data from thailand the largest exporter of rice and the united states the largest exporter of wheat and maize and the third largest exporter of soybeans in all cases except soybeans we find that large surges in export volumes preceded the price surges the presence of these large demand surges together with back of the envelope estimates of their price impacts suggests that trade events played a much larger and more pervasive role than previously thought

agricultural price instability a survey of competing explanations and remedies there are two explanations for agricultural price dynamics one follows cobweb logic and models fluctuations driven by expectation errors but emphasises that these expectations create complex dynamics and possibly chaos the other stems from the rational expectations tradition of dynamics driven by real shocks the empirical evidence tends to support the latter but is not conclusive the rational expectations model generates an optimal dynamic path from which no improvement can be expected from public intervention however if we take account of all the potential market failures in agricultural markets and especially in developing countries this conclusion might require some qualifications although an appropriate policy design for stability has still to be achieved this paper surveys the positive and normative literature on agricultural prices highlighting empirical evidence and identifying remaining unresolved issues

getting agriculture moving do markets provide the right signals abstract political discrimination has often pushed the domestic value of agriculture in developing countries below its value in markets at the border this paper seeks to explain the reasons why border prices themselves undervalue the linkages that agriculture has to economic growth in the early stages of development if agriculture is critically important to stimulating and sustaining rapid economic growth those countries that fail to correct this discrimination exact a heavy toll in economic performance furthermore the poorest countries will suffer the most agricultural development and development of the non agricultural economy are closely linked the traditional market mediated linkages form the core of economic analysis of the role of agriculture in economic development providing labour for an industrial work force food for an expanding population with higher incomes savings for industrial investments markets for industrial output export earnings to pay for imported capital goods and raw materials for agro processing industries a second category of linkages is not well mediated by market forces even when markets are working well the impact of agricultural growth on the rest of the economy through non market linkages can be traced using a simple growth accounting framework that examines contributions to the labour force capital investment and the productivity with which these two physical factors are utilised several linkages stand out as likely to be important and potentially measurable because they draw on the efficiency of decision making in rural households the low opportunity cost of their labour resources the opportunity for farm investment without financial intermediaries the potential to earn high rates of return on public investments that correct for urban bias the contribution of food price stability to increased efficiency in investment decisions and the impact of growth in food production on widespread improvement in nutrient intake and labour productivity each of these factors alone as public investment and favourable policy stimulate growth in the agricultural sector should cause an increase in the efficiency of resource allocation and thus higher total factor productivity several of these mechanisms will also serve to speed factor accumulation by increasing the savings rate or improving factor mobility

how far down the path to free trade the importance of rice price stabilization in developing asia abstract international trade agreements are pushing the world in the direction of free trade but price stabilization which is inconsistent with completely free trade remains important in developing asia because of the large share of rice in economic output a policy of pure price stabilization for rice without consistent protection either subsidization or taxation can help to create the macroeconomic stability that is essential for sustained rapid economic growth by increasing the quantity and efficiency of investment throughout the economy pure price stabilization can also generate significant equity gains by protecting poor consumers and farmers from sharp fluctuations in prices while domestic commodity price stabilization schemes have a checkered history around the world the experience of asian countries in stabilizing rice prices offers more scope for optimism asian governments have been generally successful in stabilizing rice prices and there are several instances where this has been accomplished without sustained protection of either consumers or farmers however there is room for improved stabilization mechanisms that would lower the costs of intervention

critique and transformation on the hypothetical nature of ecosystem service value and its neo marxist liberal and pragmatist criticisms abstract ecosystem service valuation esv attempts to transform the opposition of human economic necessity and ecological conservation by valuing the latter in terms of the services rendered by the former however despite a number of esv inspired sustainability initiatives since the 1990s global ecological degradation continues to accelerate this suggests that esv has fallen far short of its goals of sustainable social transformation a failure which has generated considerable criticism this paper reviews three prominent lines of esv criticism 1 the neo marxist criticism which emphasizes the fictitious character of ecosystem commodities 2 the liberal criticism through friedrich hayek s concept scientistic objectivism and 3 the pragmatist criticism of value monism although each form of criticism provides insight into the limitations of esv all share esv s inability to discern what kind of social transformation is possible unable to provide an account of their own immersion in social and historical context these approaches operate in the hypothetical in light of these shortcomings this paper advances a critical theory approach which we contend provides conceptual tools uniquely well suited to more adequately address the question of social transformation

trade subsidies export bans and price stabilization lessons of bangladesh india rice trade in the 2000s abstract during the world food price crisis of 2007 08 rice importing countries suffered through a sharp increase in international rice prices and disruptions in supply as several rice exporters restricted trade to mitigate their domestic price increases perhaps no country was more affected by these disruptions than bangladesh our analysis shows that prior to the 2007 crisis when bangladesh imported an average of nearly 1 million tons of rice per year from india domestic wholesale prices of rice in bangladesh were co integrated with import parity prices of subsidized below poverty line bpl rice when in mid 2007 india sharply curtailed exports rice prices surged in bangladesh model simulations show that a relatively small increase in private consumer stocks equivalent to about 2 weeks of normal consumption could account for the large surge in domestic prices in bangladesh and that an additional 300 000 tons in addition to approximately 700 000 tons of net rice distribution that actually occurred would have been sufficient to stabilize prices in the november 2007 april 2008 period the bangladesh analysis thus shows that in spite of the uncertainty in international markets careful planning timely interventions and openness to trade can substantially reduce requirements for public stockholding

how do export controls affect price transmission and volatility spillovers in the ukrainian wheat and flour markets abstract this study investigates the impact of export controls implemented on ukrainian wheat during two periods of significant commodity price spikes and volatility first we investigate the equilibrium price relationship between wheat and flour prices to identify whether export restrictions dampened the price transmission from the wheat market to the flour market second we estimate an asymmetric vec bekk garch model to characterize the nature of short run price adjustments and volatility spillovers between the ukrainian wheat and flour markets the results indicate that export controls insulated the flour market from price shocks in the wheat market by reducing the transmission elasticity by 25 we also find evidence that suggests export controls lead to increased volatility in the flour market in the periods immediately before and after the export controls however we find no evidence that the export controls increase the time invariant i e the constant part of volatility of wheat or flour prices lastly we do not observe asymmetric spillover effects in the flour market but we do find that the wheat market is more volatile when experiencing positive shocks than negative ones

three little known and yet still significant contributions of lloyd shapley abstract this paper makes three corrections in the literature by restating three little known and yet still significant contributions of lloyd shapley 1 shapley 1955 not gillies 1953 gillies 1959 first defined the core solution 2 shapley 1956 first defined and studied the noncooperative solution in multiobjective games and 3 shapley 1987 revealed a fundamental error in existing noncooperative game theory

managing food price risks and instability in a liberalizing market environment overview and policy options abstract managing food price risks and instability is a major challenge in the midst of ongoing food market reforms key findings from the papers in this special volume revolve around five broad areas i the sources and magnitudes of food price instability in different country contexts ii the economic and social costs stemming from price instability iii the lessons from food market reforms to date iv the design of policy reforms in ways that promote efficient and stable market development and protect the interests of the poor and v potential policy responses to food price instability in a liberalizing market environment

the macro dimensions of food security economic growth equitable distribution and food price stability abstract rather than asking how to cope with hunger and famine the question might be how to escape their threat altogether important in this regard is recognizing that agriculture and the rural economy are greatly influenced by policies and outcomes in the rest of the economy strategies include economic growth with unchanging income distribution and growth with redistribution the latter encourages balanced growth to create non farm employment opportunities while investing in rural infrastructure

corruption and the costs of redistribution micro evidence from indonesia this paper examines the degree to which the corruption in developing countries may impair the ability of governments to redistribute wealth among their citizens specifically i examine a large antipoverty program in indonesia that distributed subsidized rice to poor households i estimate the extent of corruption in the program by comparing administrative data on the amount of rice distributed with survey data on the amount actually received by households the central estimates suggest that on average at least 18 of the rice appears to have disappeared ethnically heterogeneous and sparsely populated areas are more likely to be missing rice using conservative assumptions for the marginal cost of public funds i estimate that the welfare losses from this corruption may have been large enough to offset the potential welfare gains from the redistributive intent of the program these findings suggest that corruption may impose substantial limitations on developing countries redistributive efforts and may help explain the low level of transfer programs in developing countries d 2005 elsevier b v all rights reserved

agriculture structural transformation and poverty reduction eight new insights abstract whether the sector of growth matters for the speed of poverty reduction why and how best to invest to maximize the poverty reducing effects of sectoral growth remain topics of intense debate drawing on the more recent history and applying a range of methods the papers in this special issue confirm the view that growth in agriculture is on average more poverty reducing than an equivalent amount of growth outside agriculture they also add important nuances to this broad empirical regularity uncover a series of structural conditions that affect this relation and show that different mechanisms to finance public investment to boost sectoral growth deficit financing taxation or aid can have widely different impacts on poverty a widely ignored issue so far they do so by going beyond the traditional agriculture nonagriculture dichotomy also looking at the subsectors and the differential effects of prices versus productivity they further distinguish between production for home and market consumption between modern outward oriented and informal domestically focused firms as well as between secondary towns and cities eight key insights emerge

corruption food subsidies and opacity evidence from the philippines a b s t r a c t we argue that subsidized food distribution systems that fail to publicize how much food has been allocated to each local market will experience high rates of theft on the margin as they are expanded we provide the first comparable cross section of estimates of subsidized food theft as predicted in regions of the philippines that were allocated more subsidized rice to distribute a larger percentage of the rice went missing

the future of microeconomic theory the question of what constitutes good economic theory is analyzed current good and bad aspects of its methodologies are discussed interdisciplinary work that goes beyond the social sciences is advocated the future predictions are presented concerning research in game theory and the economics of information finally the importance of technology and the need for microeconomists to understand it better are argued

food regimes and their trade links a socio ecological perspective abstract the concept of food regimes has become a prominent theory in political economy we here provide socio ecological underpinning of the food regimes theory and thereby connect it closer to an ecological economics perspective we quantify physical trade with main agricultural commodities between world regions from the mid 19th century to 2016 and ask how trade patterns relate to issues of resource use in particular to land use soil fertility and the energetic basis of agriculture agricultural exports rose from a few million t yr around 1870 to 1 4 billion t yr in 2016 growth in trade and production did not follow a continuous trend periods of accelerated growth alternating with phases of relative stability can be distinguished rather than directed modernization we observe shifts in unequal relations of power physical exchange and environmental pressure between changing centers and peripheries the periods of growth in trade match with the periodization of food regimes we find that regime shifts are closely related to changes in societies energy metabolism in the resource base of agricultural production and also to agro ecological crisis our analysis emphasizes that food regimes not only reflect changes in power relations in the world system but also changes in societies natural relations

measuring changes in poverty a methodological case study of indonesia during an adjustment period analysis of the effects of policy changes on the poor is often hindered by the difficulties inherent in measuring poverty and comparing levels of poverty before and after policy changes this article outlines two techniques which can overcome many of these measurement problems stochastic dominance conditions which can facilitate a robust poverty ranking of distributions of living standards and a decomposable poverty index which allows measured changes in aggregate poverty to be disaggregated into their various components such as the changes among population subgroups and growth and redistributive components these techniques can be applied to a wide range of indicators of economic well being and poverty lines and to assumptions about the poor the approaches are illustrated using household survey data from indonesia before and after external shocks and the subsequent structural adjustment program in the mid 1980s the study finds that favorable initial conditions and pro poor pattern of growth enabled indonesia to maintain its momentum in poverty alleviation during the period

myopia liquidity constraints and aggregate consumption a simple test this note conducts a simple test for myopia and liquidity constraints in aggregate u s consumption the test exploits the fact that under myopia consumption should be equally sensitive to predictable income declines and increases while under liquidity constraints consumption should be more sensitive to predictable income increases than to declines using quarterly postwar data the author shows that aggregate consumption is in fact more sensitive to predictable income declines than increases this perverse asymmetry is inconsistent with both myopia and liquidity constraints but is qualitatively consistent with recent theoretical work incorporating loss aversion into intertemporal preferences

agricultural labour productivity food prices and sustainable development impacts and indicators in the last few years high and unstable food and agricultural commodity prices and concerns about population growth increasing per capita food demands and environmental constraints have pushed agriculture and food production up national and international political policy and research agendas drawing on both theory and empirical evidence this paper argues that fundamental impacts of links between agricultural productivity sustainability and real food price changes are often overlooked in current policy analysis this is exacerbated by a lack of relevant and accessible indicators for monitoring agricultural productivity sustainability and real food prices two relatively simple and widely applicable sets of indicators are proposed for use in policy development and monitoring historical series of these indices are estimated for selected countries regions and the world their strengths weaknesses and potential value are then discussed in the context of the need for better sustainable agricultural development and food security indicators in any post 2015 successors to the current mdgs

the changing structure of the world rice market 1950 2000 abstract the world rice market has been unstable for much of its post world war ii history with prices volatile and the availability of supplies uncertain these characteristics exemplified by the world food crisis of the mid 1970s influenced domestic price and production policies in a number of asian countries however the structure of the world rice market has evolved and changed during the past 50 years this paper identifies three distinct phases in the history of the market based on trends in the level and stability of production and the trade orientation of major exporters the level and stability of production increased steadily over the entire period exporters have generally been active in the world market with the period 1965 1981 being an important exception since the mid 1980s prices have been low and quite stable and the patterns identified in the paper suggest that prices will remain so in the future the policy implication is that asian rice importers can afford to rely more on the world market than was warranted in the past

social protection 2 0 exploring issues evidence and debates in a globalizing world abstract this paper reviews the growing literature on social protection while not new the concept evolved remarkably in recent years it is approached from a multitude of perspectives and intersects with broader bodies of literature particularly around public policy pro poor growth rights humanitarian strategies and aid effectiveness as well as feeding into specific programmatic issues e g conditionality targeting and transfer selection this blend of challenges and approaches has often made debates elusive and polarized the paper examines the evolution and definitions of social protection and unbundles critical policy institutional and implementation quandaries taken together these considerations shape a set of context specific models of social protection the paper s five core conclusions may help chart future directions for social protection research and practice

three bubbles and a panic an explanatory review of recent food commodity price events abstract this paper is a summary of the behaviour of food commodity prices in 2007 2008 and a review of the causes of the price increases extracted from a report to the chief scientific advisor to her majesty s government thirtle c piesse j 2008 an explanatory review of the world food commodity price events of 2007 2008 a report to the chief scientific advisor department for innovation universities and skills london the historical background shows that the price spike was much less severe than in the 1970s the conventional wisdom that prices of the main food commodities were falling prior to 2006 is questioned most ceased falling and were quite stable from the 1980s the paper separates the causes of the spike from the underlying changes driving the long run trends the literature on the causes of the spike is critically reviewed and summarised there is a reasonably broad consensus on most of the causes but much less on the impact of the depreciation of the us dollar there are also concluding speculations on the future

food sovereignty and agricultural trade policy commitments how much leeway do west african nations have the 2008 food crisis has challenged the political legitimacy and economic efficiency of the liberalization of international agricultural trade an alternative vision defended by the food sovereignty movement is that longterm food security cannot rely on dependency on food imports but must be built on the development of domestic production with enough barrier protection to shelter it from world price fluctuations and unfair trading the purpose of this paper is to look into whether the west african nations can achieve food sovereignty given their various trade commitments and other external constraints the particularity of our approach is to combine a historical economic analysis with a political approach to food sovereignty and trade commitments our results suggest that external brakes on the development of food sovereignty policies are marginal as the countries still have unused room for manoeuvre to protect their smallholder agriculture under the terms of draft world trade organization agreements and economic partnership agreements and under the international financial institutions recommendations rather the international environment seems to be instrumented by west african states that do not manage to secure a national political consensus to drive structural reforms deemed vital and further the food security of the urban populations over the marginalized rural populations recently the regional integration process has made headway with a common agricultural support and protection policy project that could herald an internal political balance more conducive to food producing agriculture

the impact of oecd biofuels policies on developing countries oecd countries biofuels policies derived from energy and environmental legislation and activated by high oil prices were the primary cause of not only the sudden spike in grain and oilseed prices in 2007 2008 but also of the ensuing price volatility even though developing countries have a comparative advantage in biofuels production they were shut out of rich countries biofuel markets by trade discriminating biofuels policies developing countries would not have been able to take full advantage of the price spike in the short run anyway given the low supply elasticities and the long time required for biofuel production to come online unlike for corn ethanol the controversy over the right price of food is misplaced and policy makers should instead focus on improving biofuels policies which like their counterpart agricultural policies in previous decades have damaged the welfare of developing countries

export restrictions and price insulation during commodity price booms for individual countries variable trade barriers can be used to reduce the volatility of domestic relative to world prices if this is done by countries accounting for a large share of the market its effect is offset by increases in world price volatility this study shows the nature of the resulting collective action problem with the policy being ineffective on average in stabilizing domestic prices while increasing the volatility of the income transfers from terms of trade changes a simple approach to assessing the contribution of insulation to the price increases is developed and used with new estimates of agricultural distortions to assess its contribution to the price spikes in 1972 74 and 2006 08 for rice and wheat the analysis suggests that 45 percent of the increase in rice prices in 2006 08 and 30 percent of the increase in wheat prices was due to insulating behavior one sign of progress since 1972 74 was a substantial reduction in the extent of price insulating behavior by the industrial countries this provides little stabilizing benefit in the rice market because countries not classifying themselves at the world trade organization as developing account for only 3 percent of world rice consumption but it does offer some benefit for the wheat market where non developing countries account for 27 percent of consumption

reflections on food crises past abstract world food crises are relatively rare events occurring roughly three times a century but they also tend to be regular events every three decades or so suggesting there is an underlying cyclical cause if so far sighted donor and government investments in raising agricultural productivity and policies on behalf of stable food production and prices might go a long way to preventing food crises in the future preventing food crises rather than trying to cope after the fact with their impact on the poor is the only way to avoid substantial perhaps permanent damage to the welfare of poor households lessons from the world food crises in 1972 73 and in 2007 08 especially lessons from how the world rice market functioned point the way toward improved food policy management at national and international levels in the future

a quantitative analysis of trade policy responses to higher world agricultural commodity prices the worldwide spike in prices of agricultural commodities in 2007 2008 elevated food security and social stability issues to the forefront especially in many food deficit countries in order to mitigate the global food commodity price pressure on domestic markets several major exporting and importing countries mostly developing economies adopted trade policy changes such as export bans or raising export restrictions or reducing import tariffs during the same period this paper estimates the potential impacts of these policies on the world prices and trade of major agricultural commodities using a set of multi country multi commodity and partial equilibrium models our findings suggest that over all the trade policy responses in various countries increased the prices of all agricultural commodities although the impact on the total net trade varies by commodity the simulation results show that the overall impact of trade policy distortions on the world rice price is most significant at 24 followed by wheat 14 and barley 9 in general the poorer food deficit countries regions which have limited power to manipulate their trade policies experienced higher price increases compared to those major trading countries that adopted policy interventions also the developing countries that are net importers which did not implement trade policy interventions experienced significant welfare losses resulting from interventions implemented by other major trading countries

trading off volatility and distortions food policy during price spikes this paper analyses the trade off between price distortions and reduced volatility when governments intervened in agricultural and food markets during the recent food price spikes we develop a model to derive how much distortions a government would introduce when it cares about price stability in a situation with limited policy options we show that there is a trade off and identify the optimal combination of distortions and stability for given international price shocks and interest groups preferences for stability we compare these theoretical findings with empirical indicators on actual government interventions in staple food markets we find that several countries have been able to reduce short run price volatility in the domestic markets while at the same time allowing structural medium and long term price changes to pass through to producers and consumers however this is not the general case for many countries even when explicitly taking into account the trade off and the benefits of reducing volatility government policies appear far removed from the optimal trade off and there appears to be much room for policy improvement

stocks to use ratios and prices as indicators of vulnerability to spikes in global cereal markets we identify critical stocks to use ratios surs for major grains and for an index of total calories from these grains the latter appears to be a promising indicator of vulnerability to large price spikes when the current price shows no cause for concern more generally our results suggest that stocks data though no doubt unreliable can be valuable complements to price data as indicators of vulnerability to shortages and price spikes

food price policy the rationale for government intervention abstract policy makers in the most successful developing countries have not accepted either of the two major schools of thought on food price policy the neo classical school favours free trade to maximize efficiency of resource allocation the structuralist school favours interventions to satisfy goals for income distribution especially in the rapidly growing rice based economies of asia policy makers have been more concerned about stability of domestic prices than their level relative to world prices this concern traditionally dismissed by economists as purely political is justified on economic grounds because of improved macroeconomic and dynamic efficiency from stable food prices the paper identifies both the benefits from food price stability and the costs of achieving it

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