579 research outputs found
Mozambique Cashew reforms revisited
Cashew policy reforms in Mozambique have been controversial. They are often invoked by critics as an illustration of how agricultural policy reforms supported by international financial institutions may fail to have their intended effects. This paper revisits the reforms and their outcomes almost two decades later. While the reforms resulted in higher producer prices and an increase in output, lack of consensus on the specifics of the reforms and associated non-price support arrangements created a situation in which the sector was not able to withstand international price shocks that ultimately led to a collapse of both the processing industry and cashew production. Non-price support by donors improved the efficiency of the processing industry but this was not complemented by an expansion in cashew nut supply as such support did not extend to smallholder cashew producers. For the reforms to have had their intended results, greater investment in -- and support to -- smallholder production was needed to increase yields and overall output. Such a more comprehensive approach to cashew policy reform would have required a greater focus on achieving consensus on the causes of the cashew sector's problems and agreement by all stakeholders on a common institutional framework for pricing and non-price support.Markets and Market Access,Emerging Markets,Economic Theory&Research,Access to Markets,E-Business
The evolution of agricultural trade flows
Earlier research showed that during the 1980s and 1990s most of the global agricultural trade expansion took place among the industrial countries and among countries within trade blocs. These were also periods of declining agricultural prices. These prices increased during the 2000s, there were continuous trade reforms, and many developing countries started to support their agricultural sectors. This paper analyzes trade flows during the past two decades, and tries to measure whether all these developments have changed the trade balances and the share of different groups within the global trade flows. In addition, it looks at the trade balances on food to see the impact of these changes on net food importing countries. In conclusion, unlike the case with manufacturing, developing countries have not been able to increase their export shares in agriculture as significantly. They have maintained their trade shares by primarily expanding exports to other developing countries.Emerging Markets,Food&Beverage Industry,Economic Theory&Research,Trade Policy,Free Trade
Protection and industrial structure in India
Effective protection rates in India are so high and vary so greatly that anything short of low uniform tariffs and the complete elimination of quantitative restrictions would not make the industrial incentive scheme transparent, as it needs to be. The authors produce evidence to show that there is ample scope for reducing tariffs and quantitative restrictions and that most industries could coexist with much less protection than they now have. By eliminating all surcharges on inputs (tariffs on imported inputs, price differentials on local inputs, nondeductible excise taxes) - even without correcting for the effects of high investment costs - most projects (including import substitution projects) would earn from current international prices a positive profit margin on their marginal as well as full production costs. The proportion of projects with a positive profit margin would triple, from 20 to 63 percent. Among import-substituting projects that are not candidates for export under the present trade regime, under the proposed new regime half would be candidates for export if they would procure their inputs at international prices. Lower tariffs would fulfill their primary purpose more effectively: providing protection and incentive signals. The function of generating public revenues, another critical issue in India, should be fulfilled not through tariffs but through more efficient and protection-neutral instruments - in particular direct taxation (income tax) and nontariff indirect taxation (neutral excise taxes, MODVAT, and preferably the value-added tax on consumption).Environmental Economics&Policies,Economic Theory&Research,Access to Markets,Markets and Market Access,Consumption
Who are the net food importing countries ?
The purpose of this paper is to update the information on net food importing countries, using different definitions of food, separating countries by their level of income, whether they are in conflict and whether they are significant oil exporters. The study also estimates the changes in net food importing status of these countries over the last two and a half decades, and, most important, the study measures the relative importance of these net food imports in the import basket of the countries. Our results show that while many low-income countries are net food importers, the importance and potential impact of the net food importing status has been highly exaggerated. Many low-income countries that have larger food deficits are either oil exporters or countries in conflict. Food deficits of most low-income countries are not that significant as a percentage of their imports. Our results also show that only 6 low-income countries have food deficits that are more than 10 percent of their imports. Last two decades have seen a significant improvement in the food trade balances of low-income developing countries. SSA low-income countries are an exception to this trend. On the other hand, there are a group of countries which are experiencing civil conflicts which are large importers of food, and these countries can not meet their basic needs. They also need special assistance in the distribution of food within their boundaries. Therefore, one should modify the WTO Ministerial Declaration, and focus on these conflict countries rather than the broad net food importers.Food&Beverage Industry,Emerging Markets,Currencies and Exchange Rates,Economic Theory&Research,
Imports , exports , and industrial performance in India , 1970-88
In the 1960's and 1970's, India's policy of encouraging self-sufficiency by restricting imports was complemented by regulation of all facets of the industrial environment. Still, India developed a large, diversified manufacturing sector. In 1977-78, the policy environment began to change - with a relaxing of import controls and restrictions that has continued until now. With reform of industrial policies and a more expansionary macroeconomic policy, the value added in manufacturing grew from 4.5 percent a year in the 1970's to 7.9 percent a year in the 1980's. Meanwhile, gradual depreciation of the currency since 1985 has encouraged exports and brought prices in India closer to world levels. The faster growth of output and productivity in the 1980's is a welcome change from India's earlier stagnation. But deteriorating macroeconomic balances have brought India to a balance of payments crisis. Changes in tariffs and other instruments have more than compensated for relaxation of the import regime. Foreign trade has contracted relative to domestic output, despite some relaxation of quantity restrictions and attempts to increase exports. The main reason for this decline has been the increase in import prices relative to domestic output because of increasing tariffs, large real devaluations (especially after 1986), and rapidly expnanding domestic demand, which have made the domestic market more attractive than exports. Policy reform has led to faster growth of manufacturing output and productivity, but the main force behind faster growth has been increased public spending fueled by growing fiscal deficits. Another important variable has been a more accommodating import policy sustained by large external borrowings. This pattern of growth is not sustainable because of significant internal and external debt stocks that have accumulated over the last decade. Macroeconomic and trade policy must change significantly to shift the economy to a more export-oriented path - both to overcome the foreign exchange shortages and to rely more on external demand for industrial output. The authors argue that the manufacturing sector is highly responsive to relative price changes. Pessimism about elasticity has pervaded Indian policy making but they show high elasticities, indicating that the economy would respond favorably to changes in incentives.Economic Theory&Research,Environmental Economics&Policies,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Consumption,Trade Policy
The role of services in rural income : the case of Vietnam
This paper investigates the role of services in the household response to trade reforms in Vietnam. The relative response of the households and income growth after a major trade liberalization in rice are analyzed aiming to answer the following questions: What type of households, in which locations, having access to what type of services, benefited more from the reforms? It focuses on services that have an impact on transaction costs (roads or quality of roads, public transportation, access to credit, extension services, and availability of markets in communication services) because transaction costs are often cited as a barrier to rural households in responding to the price changes and increased incentives offered by trade and other policy reforms. The results suggest that availability of production related services contributes positively to the impact of trade reforms. Although most of the service variables have a positive and significant effect on growth in income, some that are expected to have an impact are not significant. This may be explained by the exceptional coverage of infrastructure services in Vietnam even before the reforms. When service availability is very similar across different localities, household characteristics become more important in determining the response.Transport Economics Policy&Planning,Rural Poverty Reduction,Economic Theory&Research,Housing&Human Habitats
Introduction and Overview
Global Agricultural Trade and Developing Countries explores the outstanding issues in global agricultural trade policy and evolving world production and trade patterns. This book presents research findings based on a series of commodity studies of significant economic importance to developing countries. Setting the stage with background chapters and investigations of cross-cutting issues, the authors describe trade and domestic policy regimes affecting agricultural and food markets and analyze product standards and compliance costs and their effects on agricultural and food trade. They then examine the impact and effectiveness of preferences and review the evidence on attempts to decouple agricultural support from agricultural output. Finally, they assess the potential gains from global liberalization in agricultural and food markets, and their sensitivity to various assumptions. Within this broad context of global agricultural policies and reforms, the authors then present detailed studies of commodity markets that feature distorted policy regimes among industrial and developing countries or that are important contributors to exports of developing countries. The commodities analyzed are sugar, dairy, rice, wheat, groundnuts, fruits and vegetables, cotton, seafood, and coffee. These commodity studies analyze current policy regimes in key producing and consuming countries, document the magnitude of these distortions, and estimate the distributional impacts-winners and losers-of trade and domestic policy reforms as well as their impact on trade flows and production location. Global Agricultural Trade and Developing Countries will aid policymakers and researchers in approaching global negotiations and in evaluating domestic policies on agriculture. This book compliments the findings of Agriculture and the WTO: Creating a Trading System for Development.
Are low food prices pro-poor ? net food buyers and sellers in low-income countries
There is a general consensus that most of the poor in developing countries are net food buyers and food price increases are bad for the poor. This could be expected of urban poor, but it is also often attributed to the rural poor. Recent food price increases have increased the importance of this issue, and the possible policy responses to these price increases. This paper examines the characteristics of net food sellers and buyers in nine low-income countries. Although the largest share of poor households are found to be net food buyers, almost 50 percent of net food buyers are marginal net food buyers who would not be significantly affected by food price increases. Only three of the nine countries examined exhibited a substantial proportion of vulnerable households. The average incomes (as measured by expenditure) of net food buyers were found to be higher than net food sellers in eight of the nine countries examined. Thus, food price increases, ceteris paribus, would transfer income from generally higher income net food buyers to poorer net food sellers. The analysis also finds that the occupations and income sources of net sellers and buyers in rural areas are significantly different. In rural areas where food production is the main activity and where there are limited non-food activities, the incomes of net buyers might depend on the incomes and farming activities of net food sellers. These results suggest the need for reevaluation of the consensus on the impact of food prices on food needs. Further work on the regional differences, and more important, on the second order effects, are necessary to answer these questions more precisely. Only on the basis of further analysis can we start generating better policy responses.Food&Beverage Industry,Rural Poverty Reduction,,Poverty Lines
The Indian trade regime
Despite attempts to liberalize India's import trade regime, the structure of import licensing is still restrictive and complex and for most products, trade restrictions are probably redundant as protection. Reforming export policies alone - without reforming India's import and tax systems - will produce only marginal improvements. Problems in the export administration can be resolved only by making changes in four areas. (1) The import licensing system must be rationalizedto eliminate import restrictions on inputs and components. The import regime inflicts heavy administrative costs on the Indian economy. Imports of raw materials and other inputs essential for production are delayed, leaving downstream producers idle when domestic supplies are interrupted (which happens often). The export regime is still not rationalized for smaller producers, indirect exporters, and firms that rely on domestic suppliers. (2) Tariffs and excise taxes must be consolidated around two to three slabs and the quantitative restrictions in intermediate and capital goods must be eliminated so firms can be compensated accurately for their tax burdens. The system that exists is far two complex. (3) The absolute level of tariffs on inputs must be reduced to administer the duty-free import schemes efficiently. High tariffs encourage leakage of duty-free imports into the domestic market and abuse of high drawback rates (incentives). (4) Tariffs and taxes on capital goods must be reduced to reduce the costs of investment. Tariffs in India - especially on key intermediate products (metals and chemicals) and capital goods - are high and getting higher fast. The high cost of basic inputs increases the cost of production, leads to uneconomic import-substitution which causes pressure for more protection, and requires an elaborate, cumbersome system to compensate exporters. High tariffs and excise taxes on capital goods damage Indian competitiveness, adding 10 to 15 percent to the cost of production and severely handicapping exporters. The excessive tariffs do not fulfill their primary purpose of providing protection and incentives; they are aimed at mainly generating revenues. Public revenues should be generated through more efficient instruments especially taxes.Environmental Economics&Policies,Trade Policy,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Consumption,Water Resources Assessment
Global Agricultural Trade and Developing Countries
Global Agricultural Trade and Developing Countries explores the outstanding issues in global agricultural trade policy and evolving world production and trade patterns. This book presents research findings based on a series of commodity studies of significant economic importance to developing countries. Setting the stage with background chapters and investigations of cross-cutting issues, the authors describe trade and domestic policy regimes affecting agricultural and food markets and analyze product standards and compliance costs and their effects on agricultural and food trade. They then examine the impact and effectiveness of preferences and review the evidence on attempts to decouple agricultural support from agricultural output. Finally, they assess the potential gains from global liberalization in agricultural and food markets, and their sensitivity to various assumptions. Within this broad context of global agricultural policies and reforms, the authors then present detailed studies of commodity markets that feature distorted policy regimes among industrial and developing countries or that are important contributors to exports of developing countries. The commodities analyzed are sugar, dairy, rice, wheat, groundnuts, fruits and vegetables, cotton, seafood, and coffee. These commodity studies analyze current policy regimes in key producing and consuming countries, document the magnitude of these distortions, and estimate the distributional impacts-winners and losers-of trade and domestic policy reforms as well as their impact on trade flows and production location. Global Agricultural Trade and Developing Countries will aid policymakers and researchers in approaching global negotiations and in evaluating domestic policies on agriculture. This book compliments the findings of Agriculture and the WTO: Creating a Trading System for Development.
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