Search results

The purpose of this paper is to develop an empirical model for inflation in Uganda, highlighting the role of supply side factors in the domestic agricultural sector.

The adopted empirical analysis is based on a single equation model that exploits cointegration techniques and general-to-specific modeling. The analysis controls for historical, seasonal as well as policy factors such as the effects of the global financial crisis, change in monetary policy regime to inflation targeting and monthly seasonal effects.

Results indicate that disequilibrium in the money, external and agricultural sectors feed into the Ugandan inflation process in the long run. However, the external and monetary sectors have larger long-run effects on inflation than the agricultural sector. Other factors that influence inflation in the short run include: inflation inertia, real output, money supply, exchange rate movements, foreign prices, monetary policy instruments and seasonal factors. In addition, the paper shows that the inflation-targeting policy has been successful in containing inflationary pressures.

These findings suggest that in the long-run monetary policy will continue to play an important role in managing Ugandan inflation through money demand management. The inflationary effects of agricultural supply shocks could be mitigated with appropriate domestic actions. In particular, fiscal policy that targets increased productivity and efficiency in agriculture through increased focus on production, irrigation, storage and transportation could reduce the effects of agricultural supply variability on inflation. In addition, policies intended to improve economic growth by expanding total output, control money supply growth and maintaining stability in the foreign exchange markets will help to reduce inflation.

Studies of inflation and its determinants have dominated macroeconomic debates in the past decades because of the importance of price stability in economic growth and household welfare. The major conclusions from those studies are that: high inflation is detrimental to investment and growth; erodes the purchasing power; reduces household welfare; and exacerbates income inequality. Moreover there is a growing strand of literature establishing a causal link between inflation and conflict. Particularly for agricultural households, the effects of inflation are usually felt through the increase in food prices with implications for consumption and food security. These findings indicate the important macro and social implications of inflation. By focusing on the importance of agricultural supply shocks, the paper contributes to a better understanding of the drivers of inflation and how the macro and social effects can be addressed.

The major contribution of this paper is to try and model an equilibrium relationship in the domestic agricultural sector rather than using proxies such as an output gap measure or rainfall.

The paper analyzes the response of agricultural value added to credit and real interest rate shocks in the West African Economic and Monetary Union (WAEMU) and make a short-term comparative effect analysis of credit granted to the agricultural sector on agricultural value added among member countries.

First, in order to estimate impulse response functions (IRFs) and study shocks, a panel VAR model is used. Second the paper uses an autoregressive distributed lag (ARDL) model with the associated error correction model to make a comparative analysis of the effect of agricultural credit on agricultural value added in the WAEMU.

Results shows that: (1) credit stimulates agricultural value added only in the medium and long term; (2) in the case of WAEMU, credit only becomes a means of lifting the constraint of capital underutilization after three years; (3) short-term credit granted to agriculture in WAEMU has a weak and differentiated effect on agricultural value added from one country to another.

It is imperative to implement a policy of lowering real short-term interest rates. Moreover, a monetary policy that favors direct financing of agriculture to the detriment of that oriented toward market financing is to be prioritized.

The originality of this paper is that it makes the link between macroeconomics and agriculture. It shows how the monetary instrument can be manipulated to improve the performance of agriculture. Actually, in WAEMU, the financing of agriculture is provided by the market. This paper proposes a new approach which is direct financing. The paper offers possibilities for the coordination of agricultural policies in the WAEMU.

The author attempts to examine the existence and pattern of coalitions in international relations across countries, and investigates whether international relations of coalition partners influence a country's enaction of agricultural non-tariff measures (NTMs).

The author adopts a machine learning technique to identify international relation coalition partnerships and use network analysis to characterize the clustering pattern of coalitions with high-frequent records of global event data. The author then constructs a monthly dataset of agricultural NTMs against China and international relations with China of each importer and its coalition partners, and designs a panel structural vector autoregressive (PSVAR) model to estimate impulse response functions of agricultural NTMs with regard to international relation shocks.

The author finds countries to establish coalition partnerships. Two major clusters of coalitions are noted, with one composed of coalitions primarily among “North” countries and the other of coalitions among “South” countries. The United States is found to play a pivotal role by connecting the two clusters. The PSVAR estimation reveals reductions of NTMs against China following improved international relations with China of both the importer and its coalition partners. NTM responses are more substantial for measures that are trade restrictive. These results confirm that coalitions in international relations lead to coordination of agricultural NTMs.

The author provides international political insights into agricultural trade policymaking by showing interactions of NTM enaction across countries in the same coalition of international relations. These insights offer useful policy implications to predict and cope with hidden barriers to agricultural trade.

The purpose of this paper is to examine the effect of income shocks on household real consumption expenditure, taking into account the various informal coping strategies adopted by the households. Using Nigerian Household Panel Survey data for the year 2010/2011 and 2012/2013 respectively, and probit model estimation approach, the results suggest that idiosyncratic shocks have effect on household consumption expenditure and the informal insurance strategies play only limited roles in providing the needed insurance to households in the face of shocks. Also, the effect of shocks vary according to households characteristics, which depends on whether the household is headed by male or female and urban or rural dweller.

This paper explores the fixed effects and probit model estimation approach to examine the relationship between the effect of covariate and self-reported idiosyncratic shocks on household welfare. The study examines the effectiveness of the various informal coping measures adopted by households against shocks.

The results suggest that idiosyncratic shocks have been found to have little effect on real consumption expenditure and the informal insurance strategies play only limited roles in providing the much needed insurance to households in the face of shocks. Also, the effect of shocks vary according to households characteristics, whether the household is headed by male or female and urban or rural dweller is important.

The novelty of this essay is to investigate the relationship between variation in self-reported shocks to income across households and real consumption expenditure in Nigeria – a poor, risk-prone country – considering also, the ease with which households adopt the various risk-coping strategies, which help them in smoothing consumption over time.

This paper aims to investigate the relationship between oil price shocks and world food prices between 1974 and 2018.

The authors use the SVAR model to disentangle the oil price into supply, aggregate demand and oil-specific demand shocks and apply the detrended cross-correlations analysis to measure the association between oil price shocks and food returns/volatility and analyze contagion effects between oil and food markets.

The results show that the correlations between oil and food prices depend on whether oil prices changes are driven by supply or demand shocks. Particularly, food returns (volatility) are positively (negatively) more dependent on the oil price changes driven by aggregate demand (oil specific demand) shocks. Further analysis dealing with contagion analysis between oil and food markets shows a contagion effect during the food crisis of 2006–2008. Oil-specific demand shocks are the main source of this phenomenon.

This study differentiates itself from the previous literature by simultaneously disentangling oil price into supply, aggregate demand and oil-specific demand-driven shocks and evaluating the cross-correlations between each shock type and food returns/volatility. Specifically, this study has the originality of detecting the main source of contagion effects between oil and food markets over the food crisis of 2006–2008.

The results of this study are important for policymakers and investors. They should account for the oil price fluctuations differently depending on whether the oil price shocks are driven by the demand or supply side. Moreover, they should anticipate an increase (decrease) in food prices due to a positive (negative) oil shock. In addition, special attention should be accorded to the world oil demand. Finally, when a food crisis occurs, markets operators should focus more on the specific oil-demand shocks, as it is the most contributor to possible contagion effects between oil and food markets.

This study differentiates itself from the previous literature by simultaneously disentangling oil price into supply, aggregate demand and oil-specific demand-driven shocks and evaluating the cross-correlations between each shock type and food returns/volatility. Specifically, this study has the originality of detecting the main source of contagion effects between oil and food markets over the food crisis of 2006–2008.

Evaluating the economic effects of climate change is a pivotal step for planning adaptation in developing countries. For Bangladesh, global warming has put it among the most vulnerable countries in the world to climate change, with increasing temperatures and sea-level rise. Hence, the purpose of this paper is to examine how climate change impacts the economy in Bangladesh in the case of climate scenarios.

Using a dynamic computable general equilibrium (CGE) model and three climate change scenarios, this paper assesses the economy-wide implications of climate change on Bangladesh’s economy and agriculture. It is clear from the examination of the CGE model that the impacts of climate change on agricultural sectors were felt more sharply, reducing output by −3.25% and −3.70%, respectively, and increasing imports by 1.22% and 1.53% in 2030 and 2050, compared to the baseline.

The findings reveal that, relative to baseline, agricultural output will decline by a range of −3.1% to −3.6% under the high climate scenario (higher temperatures and lower yields). A decrease in agricultural output results in declines in agricultural labor and household income. Household income falls in all categories, although it drops the most in urban less educated households with a range of −3.1% to −3.4%. On the other hand, consumption of commodities will fall by −0.11% to −0.13%, according to the findings. Although climate change impacts had a relatively small effect on gross domestic product, reducing it by −0.059% and −0.098% in 2030 and 2050, respectively.

As agricultural output, household consumption and income decline, it will impact the majority of the population’s health in Bangladesh by increasing malnutrition, hidden hunger, poverty, changing food environment, changing physical and mental health status and a changing health-care environment. Therefore, population health and food security will be a top socioeconomic and political concern for Bangladesh Government.

The examination of the dynamic CGE model is its originality. In conclusion, the evidence generated here can provide important information to policymakers and guide government policies that contribute to national development and the achievement of food security targets. It is also necessary to put more emphasis on climate change issues and address potential risks in the following years.

Effective agricultural product price regulation policies depend on market integration and the degree of symmetry in the transmission of agricultural product price signals. This study analyzes the transmission and asymmetry of the price series between the Ouagadougou consumer market and assembly markets considering three primary cereal products in Burkina Faso.

This study applies the nonlinear autoregressive distributed lag (NARDL) econometric model, which is an asymmetric extension of the ARDL cointegration model. The price series examined covers the period extending from January 2005 to December 2020.

Our analysis provides novel insights regarding short- and long-term asymmetric effects in the transmission of price signals between assembly markets and the consumer market. We also determine that the effects of negative shocks are more persistent than those of positive shocks in several markets.

For markets that exhibit symmetrical responses of assembly market prices to consumer market prices, the results could reflect the continuous efforts of market players, particularly the government, to eliminate market failures and ensure the long-term efficiency of cereal markets. To this end, an agricultural market information system can have a crucial role in easing information access for all market players.

This study provides new evidence regarding the nature of the transmission and asymmetry of price information on primary cereal products in the largest markets in Burkina Faso. Applying the NARDL model makes it possible to simultaneously estimate short- and long-term asymmetry.

The purpose of this paper is to investigate the role of market power and returns to scale in the determination of farm-value share.

This paper utilizes the equilibrium displacement model to investigate the role of market power and returns to scale in the determination of farm-value share. Contrary to the current literature, the paper incorporates oligopoly power, oligopsony power and non-constant return to scale into one generalized model, which systematically enables us investigate the impacts of market power on the determination and changes of farm-value share.

The results imply that market power as well as non-constant returns to scale is central to the understanding of farm-value share. These, in turn, indicate that ignoring the impacts of market power and degree of return to scale may overestimate or underestimate the impacts of exogenous shocks on changes in farm-value share.

Thus, to the best of the authors’ knowledge, no literature has examined the co-existence of oligopsony power, oligopoly power as well as non-constant return to scale in farm-value share determination. This paper therefore tries to fill this gap.

Purpose – This chapter discusses farmers' and policy responses to global shocks, specifically in terms of soaring prices for agricultural products in 2007. We discuss whether these shocks influenced Norwegian agricultural policy and Norwegian farmers perceptions of their situation.

Design/methodology/approach – As a background, we review trends in agricultural policy post-World War II both globally and in Norway, including empirical evidence for the changing global situation of agriculture. This chapter also analyses farmers' perceptions of their situation from 2002 to 2010 in light of these changing reality and policy response.

Findings – One immediate effect of increasing food prices was increasing incomes for food exporters and food exporting countries, an increase which also trickled down to the producers. Simultaneously, production costs rose as many input-factors became more expensive. In Norway, we saw the emergence of more optimism among farmers, more willingness to invest in farming (as opposed to a focus on cost reduction), and clear signs of a ‘repositioned productivism’.

Originality/value – In this chapter, we present an analysis of the relationship between global events, agricultural restructuring and local responses. The chapter also discusses the case of productivism along the lines drawn by Burton and Wilson (this volume), and argues that in the Norwegian system we can indeed see traces of an emerging ‘repositioned productivism’.

The purpose of this paper is to examine the potential role of money supply and agricultural informal cross-border trade (ICBT) in Uganda’s food price processes.

The econometric analysis is based on two separate but complementary approaches: vector error correction modeling and Granger causality testing.

The results indicate that long-run domestic food prices adjust to money supply, agricultural output and exchange rate movements. However, the findings do not provide sufficient evidence to support the proposition that agricultural ICBT is an important long-run driver of food price in Uganda. The pair-wise Granger causality test results reveal a unidirectional causality from food prices to agricultural output; unidirectional causality from money supply to food prices; bidirectional causality between food prices and nominal exchange rates; unidirectional causality running from rainfall to food prices; and unidirectional causality running from agricultural ICBT to agricultural output.

Understanding the underlying drivers of food inflation is critically important because food prices are critically important for food security, social stability and general household welfare.

The major innovation in this paper is attempt to model demand side determinants of food prices by focusing on the role of money and ICBT.