Projecting the World Economy to 2050: Agriculture in the Economy-wide GTAP Model

Recent analyses of the possible adverse effects of climate change and policy responses on agriculture and mining have raised food and energy security concerns in both rich and poorer countries. Analysing possible effects of ways of dealing with those concerns requires first projecting the world economy forward to 2050 and beyond. This paper provides as background a set of projections to 2050, drawing on the global economy-wide model known as GTAP. The projection is calibrated to ensure the real prices of primary products remain broadly unchanged from their levels in the model's base year of 2004. Alternative scenarios could have been calibrated to show (a) rising real prices for both food and energy raw materials (consistent with forecasts of several international agencies), by assuming some slowdown in productivity growth in primary sectors, or (b) declining real prices for agricultural and mining products (consistent with the experience of most of the 20th century), by assuming somewhat faster productivity growth in primary sectors. The set of projections shown for 2030 and 2050 is thus an intermediate set. The key impacts on international prices, agricultural self-sufficiency, sectoral shares of national economies and national shares of the global economy are highlighted. The paper concludes with implications for R&D spending and research policy.Global computable general equilibrium model projections, crop and labour productivity growth

Agricultural Policy as a Barrier to Global Economic Integration

For decades, trade between countries in agricultural products has been distorted by policies of richer countries favoring their farmers with import barriers and subsidies. Agricultural trade has often also been limited by an anti-agricultural, pro-urban bias in many developing country policies. Both sets of policies have reduced national and global economic welfare. They also have added to inequality and poverty in developing countries, because three-quarters of the worldÂ’s billion poorest people depend on farming for their livelihood. Over the past two decades numerous developing country governments have reduced their sectoral and trade policy distortions, while some high-income countries also have begun reforming their farm protectionist policies. Drawing on results from a new multi-country World Bank research project, this paper summarizes estimates of the extent of those distortions to prices of farm products over the past 5 decades, and of their effect in reducing the integration of the worldÂ’s agricultural markets.Distorted incentives, agricultural and trade policy reforms, international economic integration

Complex fission phenomena

Complex fission phenomena are studied in a unified way. Very general reflection asymmetrical equilibrium (saddle point) nuclear shapes are obtained by solving an integro-differential equation without being necessary to specify a certain parametrization. The mass asymmetry in binary cold fission of Th and U isotopes is explained as the result of adding a phenomenological shell correction to the liquid drop model deformation energy. Applications to binary, ternary, and quaternary fission are outlined.Comment: 28 pages, 17 figure

How Do Governments Respond to Food Price Spikes? Lessons from the Past

Food prices in international markets spiked upwards in 2008, doubling or more in a matter of months. Evidence is still being compiled on policy responses over the following two years, but new time series estimates of government intervention for the previous five decades allow insights into past policy responses to price fluctuations and spikes. This paper reviews the distortionary impacts of policies used by governments attempting to stabilize their domestic food markets. It then focuses on policy responses in the mid-1970s, as reflected in various annual indicators of distortions to producer and consumer incentives, before drawing out some policy lessons.Commodity price stabilization policies, Domestic market insulation, Distorted incentives, Agricultural and trade policies, Trade restrictiveness indexes

Distortions to Global Agricultural Markets: What Next?

A decline in governmental distortions to agricultural and other trade since the 1980s has contributed to economic growth and poverty alleviation globally. But new modeling results suggest that has taken the world only three-fifths of the way towards freeing merchandise trade, and that farm policies are responsible for 70 percent of the global welfare cost of remaining distortions to goods markets as of 2004. Meanwhile, new drivers are affecting the mean and variance of world prices of farm products, including biofuel mandates and subsidies, climate change mitigation policies and adaptation, water institution and policy developments, difficulties in concluding a multilateral Doha Round agricultural agreement at the WTO, and policies relating to transgenic foods. This paper reviews trends and fluctuations in past distortions to agricultural incentives, speculates on how they might evolve in coming decades alongside other market developments, and draws out implications for Australia.Distorted incentives, agricultural and trade policy reforms, Asia-Pacific region

Agricultural Distortion Patterns Since the 1950s: What Needs Explaining?

This paper summarizes a new database that sheds light on the impact of trade-related policy developments over the past half century on distortions to agricultural incentives and thus also to consumer prices for food in 75 countries spanning the per capita income spectrum. Price-support policies of advanced economies hurt not only domestic consumers and exporters of other products but also foreign producers and traders of farm products, and they reduce national and global economic welfare. On the other hand, the governments of many developing countries have directly taxed their farmers over the past half-century, both directly (e.g., export taxes) and also indirectly via overvaluing their currency and restricting imports of manufactures. Thus the price incentives facing farmers in many developing countries have been depressed by both own-country and other countriesÂ’ agricultural price and international trade policies. We summarize these and realted stylized facts that can be drawn from a new World Bank database that is worthy of the attention of political economy theorists, historians and econometricians. These indicators can be helpful in addressing such questions as the following: Where is there still a policy bias against agricultural production? To what extent has there been overshooting in the sense that some developing-country food producers are now being protected from import competition along the lines of the examples of earlier-industrializing Europe and Japan? What are the political economy forces behind the more-successful reformers, and how do they compare with those in less-successful countries where major distortions in agricultural incentives remain? And what explains the pattern of distortions across not only countries but also industries and in the choice of support or tax instruments within the agricultural sector of each country?Political economy, agricultural price and trade policies

Novel Indicators of the Trade and Welfare Effects of Agricultural Distortions in OECD Countries.

Agricultural markets in OECD countries have long been highly distorted by government policies. Traditional weighted average aggregates of the price distortions they involve, such as producer and consumer support estimates (PSEs and CSEs), can be poor indicators of the trade restrictiveness and economic welfare losses associated with them, especially if a countryÂ’s support estimates vary a lot across the product range. Supplementing those measures with estimates of trade and welfare effects of price supports requires the use of a sectoral or economy wide model and price elasticity data. This paper shows that, in the absence of such a model, and a willingness to make simple assumptions about elasticities, it is possible to generate more satisfactory indicators than PSEs and CSEs using no more than the price and quantity data used to generate them. These new indexes provide an attractive supplement to the current policy monitoring regime developed by the OECD Secretariat.Distorted incentives, agricultural price and trade policies, trade restrictiveness index

Trade Barrier Volatility and Agricultural Price Stabilization

National barriers to trade are often varied to insulate domestic markets from international price variability. This paper explores the extent of that behavior by governments using estimates of agricultural price distortions in 75 countries. Newly estimated price transmission elasticities are quite low, albeit slightly higher since than before 1985. In the case of extreme upward price spikes, trade policy responses by food importers are as substantial as those of exporting countries. The domestic price-stabilizing effect of intervention by each group is thereby weakened by the other groupÂ’s response, suggesting more-effective domestic policy options need to be considered instead of varying trade barriers.Commodity price stabilization, Price transmission, Domestic market insulation, Distorted incentives, Agricultural trade policies