Assessing the net importwelfare impacts of the rising global price of food in Italy

In Italy, as one of the developed countries, the agricultural sector is key in supplying food, food security and food safety. In this study, the amount and value of net imports for various foodstuffs in Italy was used. At first, compensatory price elasticities were calculated by using the Almost Ideal Demand System (AIDS) and the effect of increasing the global price of food on net import welfare was studied. The results show that the welfare index of compensatory changes calculated for the entire food groups is 126.46 billion USD. Meat and beverage groups have the most and the least compensatory changes, respectively

Assessing symmetric price transmission by using threshold cointegration in Iranian egg market

Purpose: Eggs bear an essential role in Iranian diet, primarily for their protein content. The egg production strictly depends on the price of inputs, that is corn used for poultry feeding. The upsurge in corn prices in recent years gave rise to both consumers’ and producers’ dissatisfaction, increasing production cost and the egg price in the final market. The purpose of this paper is to investigate the price-transmission dynamics between corn and retail egg prices in Iran. Design/methodology/approach: Individual commodity price series generally contain stochastic trends and they are non-stationary. Standard unit root and cointegration tests will be conducted in order to determine whether price series are stationary and whether they are cointegrated, respectively. The existence of cointegration between the two-price series depends on the nature of autoregressive process. If there is an asymmetric convergence between two variables, then Engle and Granger’s (1987) test can have a misspecification error and the result cannot indicate nature of variables. Threshold or asymmetric convergence test should be used, which can detect the asymmetric behavior of variables and threshold effects on series. Findings: Results showed that, in the long run, owing to price transmission, any price shocks on corn price will be transmitted to the egg price. Practical implications: Policy makers should implement input and output price policies to support producer and consumer in the retail market to increase consumer and producer welfare, and they should also control intermediaries in this market. Originality/value: This research dealing with price transmission has been concerned only with applying time-series modeling techniques to price data. The main focus of this approach has been to characterize vertical price relationships by the extent, speed and nature of the adjustments through the supply chain to market shocks generated at different levels in the marketing process. Thus, it complements the marketing margin models, which are mainly concerned with testing for market imperfections and calculating the price transmission. Besides these points, particular importance has been given in this research to the question of symmetry of price adjustments

Evaluating Agricultural Price Policy through Positive Information in Iran

Supplying food to a growing population has always been a concern for authorities in Iran. In this regard, agricultural sector plays an important role in food supply and food’s security by increasing agricultural production. But the most important concern in Iranian agricultural sector are the scarcity and resource constraints. Therefore, it seems that only way to increase food supply along with food security purpose is to increase productivity. One of the policy used to increase productivity is the output price policy, in particular for those strategic products that provided Iran's political security. The aim of this paper is to assess the effect of output price policy for Iranian agriculture. This latter is represented by a regional agricultural model, based on PMP, that groups the agriculture supply of 30 Iranian regions. The assessment of IAP presented in this paper confirms the biggest effects regions. It means that the effect of new IAP scenario is different in each region and each region has special cropping pattern. In this regard, policy makers should implement different sustaining policies at regional level. Also, if Iran wants to join WTO, it should be reduced or removed the amount of payments for inefficient crops

The impact of food price shocks on poverty and vulnerability of urban households in Iran

The aim of this paper is to assess the welfare effects of food price changes on urban households' poverty and vulnerability. This is achieved by using Hicksian price Compensating Variation (CV) and compensated price elasticities, based on Quadratic Almost Ideal Demand System (QAIDS). The study includes in total eight food groups (cereals, meats, dairy, cooking oil, sugar, fruits, vegetables, and tea and coffee) and encompasses 18852 urban households. The results showed that the welfare index for food groups was 20 USD (2.52% of the monthly average income of urban households). After increasing food prices, based on the poverty line, 41% of urban households were observed to be below the poverty line and the number of poor households increased by 10.63%. To enable food security and to execute food safety goals, the Iranian government should compensate for the welfare losses by supportive policies such as direct subsidy payments to vulnerable households