System-wide Impacts of Agricultural Export Taxes: A Simulation Experiment with Ethiopian Data

This paper examines rural-urban spillover effects of agricultural price policy in a developing economy. It employs a computable general equilibrium methodology based on a bi-regional social accounting matrix for Ethiopia. The simulation experiment quantifies system-wide impacts of exports tax on agricultural products. Protecting consumers (particularly urban households), transferring income from producers to consumers, and shifting resources from the agriculture to industry are among the most important motivations cited in the literature for exports tax on agricultural products in developing economies. However, taking inter-regional spill-over effects into account, this study shows that the removal of agricultural export tax does actually improve household welfare both in the rural and urban regions. Also, the elimination of export tax enhances structural transformation of the economy

System-wide Impacts of Agricultural Export Taxes: A Simulation Experiment with Ethiopian Data

This paper examines rural-urban spillover effects of agricultural price policy in a developing economy. It employs a computable general equilibrium methodology based on a bi-regional social accounting matrix for Ethiopia. The simulation experiment quantifies system-wide impacts of exports tax on agricultural products. Protecting consumers (particularly urban households), transferring income from producers to consumers, and shifting resources from the agriculture to industry are among the most important motivations cited in the literature for exports tax on agricultural products in developing economies. However, taking inter-regional spill-over effects into account, this study shows that the removal of agricultural export tax does actually improve household welfare both in the rural and urban regions. Also, the elimination of export tax enhances structural transformation of the economy

A Policy Impact Evaluation Model For Scotland: Decoupling Single Farm Payments

The purpose of this paper is to assess the impacts of decoupling single farm payments in Scotland. It focuses on aggregate impacts on the agricultural products in domestic and external markets and the spill-over effect of this on the non-agricultural sector as well as an aggregate impact on the Scottish GDP. In order to capture system-wide impacts of the policy reform, a CGE model was formulated and implemented using a social accounting matrix constructed for Scotland. The simulation results suggest that the Scottish agricultural sector may encounter declines in output and factor us as a result of the policy reform. However, this critically depends on two factors: (a) the price effect of the policy reform on Scottish agricultural products relative to the EU average as well as the conditions of changes in world agricultural market prices; and (b) the extent to which customers would be sensitive to price effects of the policy reform. As far as the spill-over effect to the non-agricultural sector is concerned, decoupling of direct payments seems to have a positive spill-over effect. Similarly, the aggregate GDP effect is positive under all simulation scenarios. Critically, the simulation experiments indicate that policy shock may have a symmetrical outcome across the two sectors, with contractions in agriculture being accompanied by expansions in the non-agricultural sector, mainly because of factor market interactions between the two sectors.Cap reform; single farm payments; spill-over effects; Scotland

THE EFFECTS OF SINGLE FARM PAYMENTS ON SCOTTISH AGRICULTURE: A CGE MODELING APPROACH

Using a CGE model calibrated on Scottish data, this paper examines two important issues related to evaluating impacts of the Single Farm Payment. These are specification of product transformation functions and investigation into supply elasticity parameter. Simulation results from a standard CGE were compared with those from an alternative optimisation framework proposed in this study. The latter yielded a policy effect that is likely to represent behaviour of a profit maximising farmer. The parameter sensitivity analysis showed the important role differences in supply conditions can play; which implied a need for further econometric studies to estimate supply parameters.Single farm payments, decoupling, multi-output farming, farm types, CET function, CGE modelling, Agricultural Finance, Demand and Price Analysis, Farm Management, Research Methods/ Statistical Methods,

Measuring and Explaining Technical Efficiency of Dairy Farms: A Case Study of Smallholder Farms in East Africa

Replaced with revised version of paper 11/18/10.Dairy farms, efficiency scores, Data Envelopment Analysis, fractional regression, returns to scale, Livestock Production/Industries,

Sustainability, natural capital and climate change in Kuwait

We explore the challenge of sustainability in Kuwait and, in doing so, explore three distinct (but related) questions surrounding this. First, we assess development prospects in Kuwait using metrics of national wealth and natural capital. Secondly, we construct a comprehensive greenhouse gas (GHG) emissions inventory for Kuwait. Third, we provide a risk assessment for Kuwait of climate change impacts by combining an economic model with different climate scenarios relevant to Kuwait’s food security. Our findings on wealth accounting and our GHG inventory point to the importance of strengthening, and extending, statistical systems in Kuwait. The benefits of this would be improved sustainability benchmarks (against which official national savings commitments can be evaluated) and a more robust basis for judging GHG reduction strategies (given our finding that existing data sources underestimate Kuwait emissions). Moreover, understanding climate risks for Kuwait is crucial to prudent assessment of development prospects. We show that food security is a useful starting point for this and investigate the impacts of changing world food prices on the cost of imports and scope for substituting for domestic activities in both the food. production and processing sector

Trade Policy and Mega-Cities in LDCs: A General Equilibrium Model with Numerical Simulations

This paper follows the new economic geography approach to model the relationships between trade policy and spatial agglomeration of production in the context of a small open developing economy. We construct a general equilibrium model with interactions between centripetal forces and centrifugal forces that determine linkages between urban and rural regions. Centripetal forces such as labor migration, increasing returns, and transport costs tend to concentrate economic activities and population in the urban region. This causes the inequality between urban and rural areas to increase. On the other hand, centrifugal forces such as congestion and urban land rents favor dispersion of firms and workers. This favors a balanced urban system that is conducive for rural development. We concentrate on explaining how trade policy affects the interactions between these forces by implementing the theoretical model through numerical simulations. The results suggest that trade liberalization can improve urban-rural inequalities as long as the country that implements trade policy reform does not face any trade restrictions in the external market

Trade Policy and Mega-Cities in LDCs: A General Equilibrium Model with Numerical Simulations

This paper follows the new economic geography approach to model the relationships between trade policy and spatial agglomeration of production in the context of a small open developing economy. We construct a general equilibrium model with interactions between centripetal forces and centrifugal forces that determine linkages between urban and rural regions. Centripetal forces such as labor migration, increasing returns, and transport costs tend to concentrate economic activities and population in the urban region. This causes the inequality between urban and rural areas to increase. On the other hand, centrifugal forces such as congestion and urban land rents favor dispersion of firms and workers. This favors a balanced urban system that is conducive for rural development. We concentrate on explaining how trade policy affects the interactions between these forces by implementing the theoretical model through numerical simulations. The results suggest that trade liberalization can improve urban-rural inequalities as long as the country that implements trade policy reform does not face any trade restrictions in the external market

Climate change and food security: assessing the prospect for Kuwait using an economy-wide model

This study is concerned with food security effects of global warming in Kuwait. The Intergovernmental Panel on Climate Change (IPCC) approach to monitor impacts of human activities on climate change has essentially remained top-down. Hence, it fallen out of favour among end user communities. In this procedure, the needs of policymakers at national scale have been peripheral. Kuwait's food security is a good illustration of this. The study is implemented by applying a recursive dynamic computable general equilibrium model for Kuwait. The model was calibrated on Kuwaiti data to examine food security impacts of the five Shared Socio-economic Pathways. The simulation results indicate asymmetrical impacts on Kuwait's agriculture and food processing industries. Arid countries would benefit by enhancing national capacities to assess food security implications of global warming scenarios

Commuting, Migration, and Rural Development

This paper develops a theoretical framework to simulate expansion of non-farm businesses and population in rural areas. It follows the new economic geography modeling approach with a focus on the role of urban land rents in limiting the sustainability of agglomeration in the urban region. In most new economic geography models such centrifugal forces cause dispersion of people and firms that leads to emergence of new cities. In this model, households make residential choices and move to rural areas surrounding the urban region. This increases demand for goods and services in the rural region and hence makes firms to follow households. While the business location decision improves employment prospects in the rural region, a good proportion of households may keep their jobs in the city and hence commute between the two regions. This explains the current trends of rural in-migration and linkages between urban and rural regions with a focus on complementary relationship between migration and commuting