MARKET ACCESS - OPPORTUNITIES AND RISKS

Industrial Organization,

Growing together or growing apart ? a village level study of the impact of the Doha Round on rural China

Most studies of the opening of the Chinese economy focus at the national level. The few existing disaggregated analyses are limited to analyzing changes in agricultural production. The authors use an innovative village equilibrium model that accounts for nonseparability of household production and consumption decisions. This allows them to analyze the impact of trade liberalization on household production, consumption, and off-farm employment, as well as the interactions among these three aspects of household decisions. They use the village model to analyze the impact of price changes and labor demand, the two major pathways through which international trade affects households. Analyzing the impact of trade liberalization for one village in the Jiangxi province of China, the authors find changes in relative prices and outside village employment to have opposite impacts on household decisions. At the household level the impact of price changes dominates the employment impacts. Comparing full trade liberalization and the more limited Doha scenario, reactions are more modest in the latter case for most households, but the response is nonlinear to increasing depth of trade reforms. This is explained by household-specific transaction (shadow) prices in combination with endogenous choices to participate in the output markets. Rising income inequalities are a growing concern in China. Whether trade liberalization allows incomes to grow together or to grow apart depends on whether one accounts for the reduction in consumption demand when household members migrate. Assessing the net effect on the within-village income distribution, the authors find that poorer households that own draught power gain most from trade liberalization. The households that have to rely on the use of own labor for farm activities and are not endowed with traction power, nor with a link to employment opportunities in the prospering coastal regions, have fewer opportunities for adjustment.Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,Housing&Human Habitats,Access to Markets

INTERNATIONAL DIFFUSION OF GAINS FROM BIOTECHNOLOGY AND THE EUROPEAN UNION'S COMMON AGRICULTURAL POLICY

This paper analyses the impact of adopting or rejecting genetically modified GM crops in the EU, taking into account the European Union's Common Agricultural Policy (CAP). In this paper the productivity impact of GMs differs across crops, as it takes factor biased technology change into account. The transfer of knowledge across countries is modelled as a process of endogenous knowledge spillovers. Analyses with a multi-region applied general equilibrium model shows that the CAP protects farm income and production from not adopting GM crops in the EU but has costs in terms of welfare. The EU will forgo substantial benefits if it banned GM imports.Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies,

Modeling Differentiated Quality Standards in the Agri-Food Sector: The Case of Meat Trade in the EU

This paper looks at trade impacts of quality related standards from the supply side of the exporting country. We argue that food quality standards imposed by an importing country have profound effects on the market structure of the exporting industry, and hence a significant impact on the supply response. For our analysis, we develop a stylized oligopoly model that allows for the co-existence of complying and non-complying suppliers. The model is applied to two alternative policy options to explore different mechanisms an importing county may use to enhance the quality of its imports. We take the Polish meat sector as an empirical example, since after Poland's accession to the EU the tight EU food quality standards indeed apply but the process of adjusting to them is far from complete - particularly in Polish meat production/processing. The simulations show that a subsidy scheme, such as the EU's SAPARD program in Poland, can be an effective instrument to promote the compliance with standards and to upgrade the industry in the exporting country.food quality standards, trade, market structure, Poland, meat sector, oligopoly, International Relations/Trade, Livestock Production/Industries, Q17, Q18, L1,

Linking models in land use simulation - Application of the Land Use Scanner to changes in agricultural area

When we model land use change, we utilize – consciously or unconsciously – other models as well. The variables we regard as exogenous are often generated endogenously by a different model. We are not always fully aware of the implications of this for our modelling exercises. The model which generated the demographic growth that we use in forecasting the need for residential space may have used assumptions that are at variance with ours. The model resulting in claims for agricultural land may have already taken competing claims into account – whereas our land use model may simulate this competition all over again. The data used for different models may not be compatible. Conversely, our land use simulation exercises can also be used by others as input. A model for the agricultural sector, for instance, must consider the constraint of available land – especially whether the land required is available in a particular area which is regarded as optimal for a particular production line. Land use models can provide that input. The Agricultural Economics Research Institute in The Hague, uses a number of models at various spatial levels – from the individual farm to the global economy – and for different purposes. Recently, the linkages between these models have received more attention, which also lays bare the compatibility problems between them. In order to examine both the possibilities and the problems inherent in these linkages, a research project on this ‘model train’ has been undertaken. Based on two opposing scenarios prepared by the Dutch Central Planning Bureau, the study calculates the long-term consequences of these scenarios: beginning with a general equilibrium model at global level (GTAP) through a sectoral model at national and regional scale - the Dutch Regionalized Agricultural Model (DRAM) – to a model assessing ecological effects in a local area (SOMMA). The Land Use Scanner, a land use information system and simulation model for the Netherlands, has been used to predict changes in the agricultural area for the regions used in DRAM. The land claims, which are an exogenous variable in the Land Use Scanner, were generated from projections of future population and GDP, on the basis of their historical correlation with land use. This project has led to interesting insights into the problems of linking models. It is hoped that these insights will help to improve the models we use – including land use models. The paper highlights the importance of making modelling assumptions explicit, such that the outcome of one model can indeed be a useful input into another one. The integrated modelling approach yields more consistent projections of land use.

Should Europe Further Strengthen Intellectual Property for Plant Breeders? An Analysis of Seed Industry Proposals

This paper illustrates the potential negative effects of increasing the scope of plant breeders' rights (PBR) protection, as has been proposed for Europe by leading plant breeding firms. Such a policy could increase the costs for varietal development for breeding companies, particularly if their access to varieties of the market leader is constrained. This is represented as an asymmetrical increase in breeders' cost functions in a simple model of endogenous quality choice under price competition. Increased scope of IPR protection leads to increased profits for the leading breeding company but decreases in varietal quality and both farm and overall profits.intellectual property rights, product differentiation, plant breeding, genetic diversity, Research and Development/Tech Change/Emerging Technologies, L13, O34, Q16,

Mediterranean Association Agreements and European Security

Agricultural and Food Policy,

Impacts of the EU sugar policy reforms on developing countries

This report analyses the impacts of the Commission's July 2004 proposal for sugar policy reforms on developing countries. The study uses three approaches that complement each other: model simulations, literature review and country case studies. Model simulations indicate that the consequences of the EU policy reform on EU imports are rather modest: imports from LDCs increase but to a lesser extent than the Commission and other studies indicate. Important trigger points in the evaluation of the impact on trade flows are the degree of substitutability between domestic EU sugar and imported sugar, and potential 'swap' or trade diversion effects. Welfare effects are minor to ACP countries as a group, but country effects may differ strongly. The study includes three case studies - Ethiopia, Mauritius and Brazil, representing an EBA, an ACP and a net exporting country with no preferences to the EU market - to show how EU policy changes may affect the sugar industry in each of these countries.Agricultural and Food Policy,

A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade

This report develops a conceptual framework for the assessment of costs and benefits associated with non-tariff measures that allows an evidence-based comparative assessment of alternative regulatory approaches. It was prepared by Frank van Tongeren (OECD Secretariat), John Beghin (Iowa State University), and St?phan Marette (INRA).

Growth, Employment and Education: An Application of Multicriteria Analysis to Pakistan

Development planning is a multicriteria problem. Apart from economic goals (like economic growth, income distribution, employment, price stability, balance of payments, etc.) a set of basic human needs (like food, health , housing, clothing, education, etc.) has to be fulfilled within a limited time horizon. Of course, not all targets of economic policy can reach desirable levels within a plan period given scarce resources and trade-offs between goals and basic needs. Priorities have to be formulated and goals and needs have to be weighted against another. Multicriteria analysis can contribute to this weighing process by circumscribing feasible areas and by quantifying above mentioned trade-offs. The purpose of this paper is to present an illustration of multicriteria analysis in which at least two goals of economic policy (growth and employment) and one basic human need (education) are incorporated. The model is applied to Pakistan due to data access