Economywide impact of avian flu in Ghana: A dynamic CGE model analysis

"We use a dynamic CGE model to quantitatively assess the economywide impact of HPAI in Ghana. The likely effect of an avian flu outbreak is modeled as demand or supply shocks to the poultry sector. Our analysis shows that, while chicken is a quite small sector of the Ghanaian economy, the shock in chicken demand due to consumers' anxieties is the dominant factor in causing chicken production to fall. The indirect effect on soybean and maize that are used as chicken feed is also large. Under the worst-case scenario, soybean production will fall by 37 percent and maize by 6.4 percent. However, the economywide impact on both AgGDP and GDP is very small. In the worst-case scenario, in which chicken production falls by 70 percent in 2011, AgGDP falls by only 0.4 percent and GDP is almost unchanged. However, the livelihood impacts of a HPAI outbreak could be significant for some sections of the population in Ghana particularly those involved in the poultry sector. Micro-level analysis of chicken producers' livelihood, therefore, is necessary." from authors' abstractAvian influenza Developing countries, General equilibrium model, Computable general equilibrium (CGE) modeling, Food safety, Water quality, Water policies,

Productivity convergence in Brazil: The case of grain production

"In recent years, Brazil has become a considerable player in agricultural markets for a number of commodities. Such agricultural growth in Brazil has largely been the result of gains in productivity over the last several decades. Still, there remain some sub-national regions and states that lag behind in both agricultural productivity and levels of per capita income. In this paper, we investigate whether technological spillovers in agriculture have reached the poorer or less productive regions with focus on the evolution and patterns of land productivity. To assess such spillovers, we examine three cereal crops: maize, rice and wheat, as these crops are grown by commercial and subsistence farmers throughout the country. We first apply a generalized entropy (GE) method to assess whether inequality in productivity has changed over time. The entropy analysis indicates that the trends for overall entropy did not increase over time for all three crops. Moreover, declining trends in between-group inequality were observed for maize and wheat and remained constant for rice. This result suggests that yields in less productive micro-regions, indeed, have grown faster than yields in more productive micro-regions, at least in the case of maize and wheat. Next, two types of econometric estimations are used to measure whether convergence has occurred in yields of the three crops. The econometric findings are consistent with the GE results and suggest that conditional convergence has occurred in all three crops, which demonstrates that yields in less productive regions converge to those in productive regions, given the control of other factors. However, the process has been rather slow." from authors' abstractproductivity, Convergence, Spillovers, Development strategies,

Dynamic Gains and Losses from Trade Reform: An Intertemporal General Equilibrium Model of the United States and MERCOSUR

An intertemporal general equilibrium model of the United States and MERCOSUR is created to analyze the dynamic adjustments in both regions' commodity and capital markets after trade liberalization. Simulation results show that tariff reductions initiated by MERCOSUR have small positive effects on the U.S. production, trade, consumption and investment, and stimulates MERCOSUR's growth, and improves its current account. If tariffs are eliminated by both regions, both regions are better off from points of intertemporal social welfare, international trade, domestic investment, and growth. Agriculture benefits more from trade reform, which implies that ruralagricultural sector might have been a victim of trade protection policies.International Relations/Trade,

Assessing potential impact of avian influenza on poultry in West Africa: a spatial equilibrium model analysis

"In this paper, the authors analyze the potential economic impacts of avian influenza (AI) in West Africa, taking Nigeria as an example. They find that, depending on the size of the affected areas, the direct impact of the spread of AI along the two major migratory bird flyways would be the loss of about 4 percent of national chicken production. However, the indirect effect—consumers' reluctance to consume poultry if AI is detected, causing a decline in chicken prices—is generally larger than the direct effect. The study estimates that Nigerian chicken production would fall by 21 percent and chicken farmers would lose US$250 million of revenue if the worst-case scenario occurred. The negative impact of AI would be unevenly distributed in the country, and some states and districts would be seriously hurt. This study is based on a spatial equilibrium model that makes use of the most recent spatial distribution data sets for poultry and human populations in West Africa. The study shows that, while most of the attention has focused on preventing global influenza pandemic, preventive measures are also needed at the national, subnational, and local levels, because AI could potentially have a huge negative impact on the poultry industry and the livelihood of smallholder farmers in many regions in West Africa.." Authors' AbstractComputable general equilibrium (CGE) modeling, Small farmers, Spatial analysis (Statistics),

Exploring market opportunities for African smallholders

"Wealthy countries' agricultural subsidies have also created unfair competition. African farmers not only have limited access to rich-country agricultural markets, but they also face unfair competition in their own domestic markets from subsidized imports of food staples. New challenges come from dramatically changed marketing chains that require African farmers to compete in markets that are more demanding in terms of product quality and food safety. What can be done to enhance market opportunities so that agriculture can become a more powerful engine of growth for the continent? Which markets and which products offer the greatest potential for raising incomes and food consumption? This brief addresses these questions and suggests policies that could help enlarge markets for African farmers." from Text

Exploring regional dynamics in Sub-Saharan African agriculture

"Identifying growth poles in the SSA region, strengthening linkages and generating mutual benefits across African countries is an important part of the strategy to promote agriculture-led growth at the Africa-wide scale. Using agricultural trade data, this study focuses on identifying major countries that play important roles in regional agricultural trade and commodities in which African countries have a comparative advantage and where there is potential for more trade within the region....Poor infrastructure and institutional barriers are among the major reasons constraining African countries to exploit their comparative advantage and strengthen their economic linkages. The model simulations show that opening the EU market is strongly in the common interest of African countries. Reducing African countries own trade barriers, both in agriculture and non-agriculture, can significantly increase intra-regional agricultural trade. However, the benefit of the globalization and agricultural trade liberalization to the African countries would be limited by poor market access conditions such as transportation and other infrastructure. Because of these, many African agricultural commodities can hardly reach domestic and regional markets, or be exported to the world. Without improving the efficiency of these nonagricultural sectors that provide critical inputs or services to agricultural production and trade, it is virtually impossible for the countries of SSA to increase their competitiveness in international markets." from Authors' Abstract

Foreign inflows and growth challenges for African countries

Foreign inflows are important sources of income that many African governments use to finance public investments and to support the development of manufacturing or export-oriented service sectors. Yet the recent growth experience of many African economies shows that domestic-oriented industry (construction, utilities) and services have become the largest sectors. Using Ghana and its newly found oil as an example, we analyze the dynamic relationship between increasing foreign inflows and economic growth and structural change by developing a multisector intertemporal general equilibrium model. We find that the sudden increase in petrodollars used to finance either the government�s recurrent spending or public investment generates a substantial short-run growth shock consistent with the Dutch disease theory. Opposed short-run effects on the growth of the tradable and nontraded sectors lead the structure of the economy to become more domestic oriented. The creation of an oil fund helps reduce the negative growth and structural effect, while in the longer term, if oil spending does not enhance productivity, growth declines and the GDP share of the nontraded sector further increases. Smart use of oil revenue thus not only involves the creation of an oil fund but also spending inflows on productivity-enhancing investment. Whether public investments can help overcome Dutch disease effects also depends on the growth magnitude of the inflows. At the same level of investment-to-productivity-growth efficiency, public investments take longer to overcome the negative growth effects the higher the growth rate of inflows. This paper further shows that the structural effect of foreign inflows on economic development is a long-term challenge for Africa. The domestic-oriented economic structure can become a persistent phenomenon for countries that continue to receive foreign inflows in the form of petrodollars or in any other form.Dutch disease, foreign inflows, Growth, intertemporal general equilibrium, structural change,

Impact of the MFA phase-out on the world economy

This study focuses on the possible impact of the MFA phase-out on the world economy. Starting from analyzing trends in world textile and apparel trade, the study found that the developing countries were a growing factor in world T&A trade in recent decades. Moreover, using trade data from 91 countries over 37 years, the study indicates a strong positive relationship between trade in textile and apparel and the standard of living. The study further focuses on the possible impacts of the MFA phase-out on the world T&A using an intertemporal, global general equilibrium model. The study found the the MFA phase-out would enlarge world trade of T&A and developing countries will further gain market share in world total exports. Even though the developing countries currently free from the MFA quota restraints may lose their market shares, as world T&A prices are lowered by improving the efficiency of world T&A trade post-MFA, consumers are better off by consuming cheap commodities.Markets. ,Industries Economic aspects. ,Living standards. ,Trade policy. ,

Economic transformation in theory and practice: What are the messages for Africa?

"Encouraging signs of growth acceleration in Africa may herald a new development era of rapid transformation. In an effort to promote the future success of African transformation, we herein provide an extensive literature review on development economics and empirical observations from successfully transformed countries, along with analytic narratives on the transformations of Thailand and Mexico. To conclude, we derive six key messages for African transformation. We find that the traditional development economics theory is consistent with the transformation practice of successful countries. However, this theory needs to be broadened in light of rising inequalities during transformation. Success vitally depends on agricultural development; early withdrawal of public support away from agriculture slows down transformation, and the resulting inequalities are recognized as a persistent development challenge. Transformation also depends on industrialization strategies, but we find that winner-picking industrialization negatively affects other aspects of development, whereas home-grown, export-oriented industrialization led by private entrepreneurs opens up broader opportunities for sustainable growth. Finally, government support will be required to create a business-promoting environment and to offer incentives for African entrepreneurs to lead growth." from authors' abstractEconomic transformation, Agricultural growth, structural change, Development strategies,

A Global Perspective of Liberalizing World Textile and Apparel Trade

International trade in textile and apparel has been governed by quantitative restrictions under the Multi-Fiber Arrangement (MFA) and earlier agreements for more than 30 years. One of the major accomplishments of the Uruguay Round was the Agreement on Textiles and Clothing (ATC), which provides for the dismantling of these restrictions. Under the Uruguay Round ATC, the MFA restrictions are to be phased out over a 10-year period and are scheduled to end by the year 2005. This study combines a data description of the trends in world textile and apparel trade flow, an econometric analysis on the linkage between textile trade and growth, and an intertemporal, world CGE model to evaluate the possible impact of liberalizing world textile and apparel trade. As textile and apparel industry is an important source of the growth, our study focuses on the effect on the developing countries.Textile trade and growth, ATC, Intertemporal general equilibrium