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1 – 10 of over 94000Yanwen Tan, Ruixue Yue, Liru Chen, Congxi Li and Kevin Z. Chen
This paper aims to examine whether China's grain price support policy has distorted the grain market price.
Abstract
Purpose
This paper aims to examine whether China's grain price support policy has distorted the grain market price.
Design/methodology/approach
The time-varying differences-in-differences (DID) model is used to study the impact of support policies on grain prices, and it is combined with the event study method to explore the dynamic effects of price support policy. Panel data model is used to study the effect of the price support policy on price formation for national grain market prices. In addition, we apply the smooth transformation (STR) model to verify whether there is a distortion in the transmission of grain prices among different markets in China and from the international market to China’s market.
Findings
China’s grain price support policy plays a significant role in rising grain market prices, weakens the decisive role of the market mechanism in the formation of grain prices, hinders the spatial transmission of market price signals and decreases the effect of price transmission from the world market to China’s market.
Research limitations/implications
In order to ensure both the stability of grain production as well as the market stability, and also to ensure that intervention policies do not distort the food market, the minimum purchase price of grain and market regulation policies should be adjusted as follows: (1) price support policy should be shifted to an income support policy and (2) reasonably determine the scale of reserves and implement a grain minimum purchase price policy in limited areas.
Originality/value
Our findings are relevant for understanding the effect of China's grain price support policies on the implementation regions and the price transmission effect, which provide reference experience for developing countries to implement food price policies.
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This paper aims to examine the applicable legal framework, various concerns regarding the price support methodology and the merits and pitfalls of the Bali peace clause that…
Abstract
Purpose
This paper aims to examine the applicable legal framework, various concerns regarding the price support methodology and the merits and pitfalls of the Bali peace clause that currently shields India’s public stockholding (PSH) policy, to provide suggestions on moving forward in the World Trade Organization (WTO) negotiations.
Design/methodology/approach
At the WTO, PSH for food security is considered a trade-distorting price support measure when food stocks are purchased from farmers at administered prices instead of market prices. The price support is measured by a specific methodology stipulated under the Agreement on Agriculture. India is concerned that the price support methodology overestimates the actual support provided to the farmers and makes India susceptible to violating the WTO law.
Findings
The paper explains the domestic implications for India arising due to the applicable WTO law. Given the centrality of India’s PSH programmes in ensuring food security, India must seek more clarity on the interpretation of Article 18.4 of the AoA and the ambiguous provisions of the Bali peace clause.
Originality/value
The paper provides a timely and updated analysis of the contentious issue of PSH for food security, exclusively from the Indian perspective, highlighting the persisting challenges for India in WTO agriculture negotiations. This is timely as many WTO members have raised serious concerns about India’s market price support policies recently and this analysis informs the reader about the underlying issues.
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Harold Glenn A. Valera, Badri Narayanan Gopalakrishnan, Sumathi Chakravarthy, Sindhu Bharathi, Jean Balié and Valerien Olivier Pede
This paper investigates the effects of the total abolition of all forms of agricultural subsidies to producers and border tariffs on the prices of staple cereals.
Abstract
Purpose
This paper investigates the effects of the total abolition of all forms of agricultural subsidies to producers and border tariffs on the prices of staple cereals.
Design/methodology/approach
The authors use the GTAP global economy-wide model and focus on 27 countries and 8 regions. The GTAP database that is used contains information on budgetary transfers to producers and market price support such as domestic price support, tariffs, export subsidies, quotas on exports or imports and other border measures.
Findings
The removal of subsidies is estimated to significantly increase the prices of wheat and other cereal grains in Japan, paddy rice in Malaysia and Indonesia, processed rice in Malaysia and Indonesia and wheat in Brazil and India. When border tariffs are removed, cereal prices are projected to fall in several countries, but the decline is more pronounced for wheat in Kenya and Japan, other cereal grains in South Korea and all staples in Nepal.
Research limitations/implications
The alternative scenarios on the removal of agricultural subsidies in all agricultural sectors and the elimination of border tariffs are purely speculative as the analysis ignores important political economy considerations of agricultural and food policy reforms.
Practical implications
The findings from this study point to the importance of implementing additional policy measures to mitigate the possible negative effect of repurposing the support to agriculture and ensure the food security and welfare of those categories of buyers who heavily depend on the price of staple food for their livelihoods.
Social implications
This study’s findings confirm that the elimination of agricultural subsidies would impact global food security directly by making staple food less affordable to the poorest and indirectly by decreasing the available household budget for other presumably more nutritious food groups. Consequently, it is expected that these price increases could make segments of the world population poorer, particularly the net-food buyers due to a decline in their real income.
Originality/value
The authors assess the impact of removing the subsidies on the economy in a comprehensive way, particularly given the recent policy focus on net zero emissions and Sustainable Development Goals that include healthy foods. The authors also consider the counter effects of tariff reduction on this, which is price-reducing.
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Mohit Ray, Avinash Kumar and Samir K. Srivastava
Despite various consequences for different stakeholders in the mustard ecosystem, India prohibited blending in mustard oil to achieve self-reliance in edible oils and promote…
Abstract
Purpose
Despite various consequences for different stakeholders in the mustard ecosystem, India prohibited blending in mustard oil to achieve self-reliance in edible oils and promote consumer health. This paper uncovers the implications of this policy on mustard production, consumption and prices.
Design/methodology/approach
This paper deploys system dynamics (SD) to model the mustard ecosystem. SD uses simulation modeling to comprehend the nonlinear behavior of complex systems over time utilizing causal-loop and stock-flow diagrams.
Findings
While the mustard price does not vary in the short run, it diverges toward a higher side in the long run due to the changed policy mandate. Surprisingly, due to the predominance of market prices, the policy administered minimum support price (MSP) was found to have a limited influence on mustard prices. Hence, the focus should be on supply augmentation through non-price-based measures like disseminating information to enhance the yield rate of seed production and promoting the adoption of efficient technologies with higher oil conversion efficiency.
Research limitations/implications
The paper allows policymakers to quantitatively evaluate the effectiveness of policy interventions to mitigate the adverse impacts of policy mandate. It presents a reliable roadmap for policymakers to roll out effective policies.
Originality/value
The paper uncovers the system-level impact of policy on stakeholders and examines the effectiveness of MSP.
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The purpose of this paper is to focus on labor movement in the agricultural sector of Taiwan to clarify the relationship between agricultural policy and the agricultural…
Abstract
Purpose
The purpose of this paper is to focus on labor movement in the agricultural sector of Taiwan to clarify the relationship between agricultural policy and the agricultural adjustment problem by estimating the labor movement function.
Design/methodology/approach
The relationship between agricultural policy and the adjustment process of agricultural labor in Taiwan was analyzed by modeling labor movement between the agricultural sector and other sectors. Through empirical analysis of labor migration function, it is clear that the following policy factors, affect the incentive for labor migration, and obstruct off‐farm labor migration: the price support policy; the incomplete farmland conversion regulations, which increase farmers' farmland possession motive; and government agricultural expenditure, which includes direct transfers to the agricultural sector.
Findings
The study confirms that after the late 1980s the factors that obstruct agricultural adjustment much more than the price support policy are the incomplete farmland conversion regulations and increasing government agricultural payments, from the result of the simulation with the influence of the policy eliminated.
Research limitations/implications
The implication of this paper is that even though Taiwan has been participating in World Trade Organization from 2002 and consented to cut the tariff on agricultural products and reduce agriculture support policies not linked to production, a delay in labor adjustment between the agricultural sector and other sectors may not necessarily be eliminated if there are other policy factors that affect the incentive for off‐farm migration by farmers.
Originality/value
Many studies use the labor migration function for empirical analysis, but most of them estimated the function by a simple single regression which shows that the labor movement from the agricultural sector to the other sectors increases as a result of an expanding wage gap. However, off‐farm labor movement reduces the wage gap between sectors adversely. Therefore, a reverse causal relation exists between labor movement and the wage gap between sectors. The endogeneity problem was considered as analyzing the measurement of the labor migration function.
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State policies have played a significant role in shaping the structure of agrarian economy in both advanced and under‐developed capitalist societies.(1) The influence of the state…
Abstract
State policies have played a significant role in shaping the structure of agrarian economy in both advanced and under‐developed capitalist societies.(1) The influence of the state over the rural sector is not simply confined to its agricultural policies but covers a large array of policies and actions that may have direct as well as indirect effects on the rural population. This paper deals with the factors that influence agricultural policies of the state in the specific case of state policies towards Oriental tobacco production in Turkey.
Describes the decision‐support system CAPPLAN. CAPPLAN has been developed for firms which sell their products through a salesforce to industrial customers or wholesalers and…
Abstract
Describes the decision‐support system CAPPLAN. CAPPLAN has been developed for firms which sell their products through a salesforce to industrial customers or wholesalers and retailers. Explains that in such situations, it is common practice to negotiate the price based on guidelines provided by the sales management. Details how CAPPLAN offers a jointly optimal differentiation of prices and allocation of calling effort across account groups subject to both a limited production capacity and working‐time capacity, and also provides a parametric optimization of prices and calling effort for varying levels of production capacity. Reports how the system has been applied at an industrial photo laboratory selling the development of film and the production of prints through retailers, resulting in a substantial improvement in profits.
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Aditya Korekallu Srinivasa, K.V. Praveen, Subash Surendran Padmaja, M.L. Nithyashree and Girish K. Jha
This paper examines whether farmers' knowledge of the minimum support prices (MSPs) affects farm-gate prices. MSP is the minimum guaranteed price for agricultural commodities…
Abstract
Purpose
This paper examines whether farmers' knowledge of the minimum support prices (MSPs) affects farm-gate prices. MSP is the minimum guaranteed price for agricultural commodities announced by the Government of India for 24 commodities. Most farmers in India prefer to sell their produce at the farm-gate due to a small marketable surplus and hence do not directly benefit from MSP. The authors test the common argument in the political discourse that if farmers have knowledge of MSP, then they can bargain with traders during the farm-gate transaction and demand a better price close to MSP.
Design/methodology/approach
The authors use matching methods to examine the impact of knowledge of MSP on farm-gate prices.
Findings
Using nationally representative data, the authors show that there is no empirical evidence that the knowledge of MSP of the crops leads to higher bargaining power and better farm-gate prices.
Practical implications
Price information (MSP in this case) alone cannot improve the bargaining power of farmers and result in a better price realization. As a safety net, MSP fails in the absence of procurement of products by the government. This also raises the question of the equitability of the price support system in India and calls for a rethink of the MSP policy.
Originality/value
This study is the first of its kind to examine the anchoring effect of knowledge of MSP on farm-gate prices using a nationally representative dataset.
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