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),

Regional Disparities in Ghana: Policy Options and Public Investment Implications

Ghana has achieved sustained growth and poverty reduction during the 1990s, but such growth did not benefit the three poor northern regions and the development gap has increased between the south and north. One of the most important reasons is that much of the growth has been generated by export agriculture in which northern Ghana has little contribution if any. This paper sets out to identify avenues for pro-poor growth in Ghana, focussing on agricultural opportunities, particularly in northern Ghana. Using an economywide, multimarket model and based on time series production data between 1991 and 2000 and Ghana Living Standards Survey data of 1991/92 and 1998/99, this paper analyzes the possible poverty reduction trends up to 2015 by assuming different patterns of growth. The results show that agriculture-led growth has a larger poverty reducing effect than nonagriculture-led growth. Within agriculture, growth in staple crop production reduces poverty more than export crops. In northern Ghana, the staple crops whose growth exerts the largest effect on poverty reduction are groundnut, cassava and cowpea. However, despite the large effects of the agriculture-led growth, the projections of poverty rates in the regions, particularly Upper East are still high implying a need for complementary avenues for poverty reduction. A review of the literature shows that while the north generally is a net migration area, the rewards of migration have been limited because people who migrate have no skills and are, therefore, limited to entering the informal job market where wages are low. The implication is to enhance this labour with education and skills. Ultimately, the regions must attract production investment to boost economic activity and generate local growth. The state must play a leading role in investing in productive and social infrastructure as a way of facilitating the environment for private sector operators

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. ,

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,

Environment, Welfare and Gains from Trade: A North-South Model in General Equilibrium

The effects of environment on trade and welfare are analyzed in a modified Heckscher-Ohlin framework using a quasi-homothetic preferences to account for differences in countries' expenditure shares on health. Three types of pollution, local-disembodied, global-disembodied and embodied, result as a by-product of inputs used in production. For each case, the Walrasian, Pareto optimal and the Regulators' problem are analyzed. The optimal tax is shown to improve each country's welfare if the country is small in the world market. Otherwise, changes in the terms of trade may cause one country to be made better off at the expense of the other. Interdependence for the global-disembodied case is explored using a one-shot Nash game. For the embodied pollution, taxing the polluting input only can cause a decline in welfare when the polluting input is intensively used. Instead, a tax on the polluting input in combination with a subsidy to the non-polluting input is optimal. In general, the results suggest compensatory payments may be required to encourage abatement policies. Contrary to other approaches, an abatement policy does not necessarily decrease a country's comparative advantage, i.e., reduce exports of the polluting sector.International Relations/Trade,