Agricultural policies in Indonesia

As in many other developing countries, the concerns about food security in Indonesia during the 1980s and early 1990s resulted in policies aimed at achieving self-sufficiency in food crops. The Government of Indonesia (GOI) combined price interventions and economic incentives to encourage agricultural production, especially of the staple crops. From 1985 to 1998, Indonesia started a series of domestic and trade reforms emanating from a combination of unilateral undertakings, the country's commitments to the WTO, and the government's agreement with the IMF following the 1997/98 financial crisis. This study computes nominal protection rates and producer support estimates (NPR and PSE) for Indonesia for the period 1985-2003 for six agricultural commodities, rice, maize, sugar, soybeans, crude palm oil, and natural rubber (representing more than two-thirds of Indonesian agricultural output) in an attempt to quantify the net effects of these policies. The NPRs and PSEs computed for Indonesia show that in spite of the reforms, the GOI has protected its agriculture over the past twenty years, although not uniformly across commodities. Although the reforms went a long way in reducing trade and domestic regulations on agricultural products, the study results demonstrate a return to protection for some commodities in recent years.

Income effects of alternative trade policy adjustments on Philippine rural households: a general equilibrium analysis

Three types of trade policy adjustments to deal with an unsustainable current account deficit are examined in this paper for their economywide income and equity effects, based on the results of simulation experiments using a CGE model of the Philippine economy. Gross domestic product (GDP) expectably decreases with import rationing and less markedly, with the imposition of a general import surtax; by contrast, adjustment through the reduction of tariffs leads to a larger GDP. The latter result, however, is counterbalanced by a substantial loss in government income. With respect to the distribution of income gains (and losses), the additional market distortions and rent-seeking that accompany the implementation of import rationing heavily discriminate in favor of Metro Manila households, whose average income is the highest among the five household groups distinguished in the model. Moving to a general import surtax represents an improvement in that non-Metro Manila households are penalized less. However, these first two policy options are deemed inferior to tariff liberalization which yields larger income benefits to small-farm and "other rural" households relative to the more affluent Metro Manila, other urban, and large-farm households.Import quotas., Income distribution, Tariff., Trade liberalization., Philippines.,

A 1991 social accounting matrix (SAM) for Zimbabwe:

The 1991 Social Accounting Matrix (SAM) for Zimbabwe that we document in this paper is intended to provide benchmark data for economy-wide analysis under the MERRISA Project. Its construction is based on a three-step process: (1) building a macro SAM that presents the aggregative features of the Zimbabwean economy and serves as a control matrix for the micro SAM; (2) disaggregation into a complete but unbalanced micro SAM; and (3) balancing the disaggregated and complete micro SAM using the cross-entropy approach. The macro SAM entries are based on aggregates from a recent, significant revision of the Zimbabwe national accounts for 1991. The structure of the micro SAM is a disaggregated version of the macro SAM. The outcome is an 88 by 88 matrix that includes 36 activities, 27 commodities, 9 factors of production (4 labor, 3 capital, and 2 land categories), 5 households groups, and one account each for enterprises, government, investment/saving, and rest-of-the-world. Among the significant features of the Zimbabwean economy that are explicitly taken into account in the SAM structure are the importance of agriculture, the distinction between smallholder and large-scale commercial farms, home consumption by smallholder farm households, and the large marketing margins that reflect inefficiencies in trade and transport infrastructure.Macroeconomics., Social accounting Zimbabwe.,

Agricultural growth linkages in Zimbabwe: income and equity effects

The comparative effects on GDP and household incomes associated with various pathways of agricultural growth in Zimbabwe are investigated, based on SAM (social accounting matrix) multiplier analysis. Among the five growth paths considered, the "smallholder road to agricultural development" yields the largest increase in national income. It benefits smallholder households the most, but the income gains to the two other low-income household groups are lower compared to those arising from the four other agricultural growth paths. Foodcrop production, in which smallholders have a dominant share, shows a larger GDP multiplier than both the traditional (tobacco and cotton) and nontraditional (horticulture)export crop sectors, which are dominated by large-scale commercial farms.Income Rural areas Africa., Agricultural development Africa., Agricultural policy Economic aspects., Households Zimbabwe., Social accounting.,

Macroeconomic and agricultural reforms in Zimbabwe

Using a CGE (computable general equilibrium) model for Zimbabwe with 1991 as base period, this paper examines quantitatively the income and equity effects of macroeconomic reform measures in isolation and in conjunction with potentially complementary changes in agricultural sector policies. Some important features of the CGE model are an explicit focus on agriculture, distinction among various rural and urban household groups, and detailed specification of factor markets. Specific aspects of economic policy existing in the pre-reform benchmark year are taken into account in the base model, such as the administered setting of the foreign exchange rate, quantitative import restrictions, and government-determined maize prices for domestic producers and grain millers. The model makes use of a 1991 SAM (social accounting matrix) for Zimbabwe as database.Social accounting Zimbabwe ,mathematical models ,zimbabwe ,TMD ,

The effects of alternative free trade agreements on Peru: Evidence from a global computable general equilibrium model

"By using a global computable general equilibrium model, this report analyzes the impact of various pending free trade agreements for Peru. In December 2007, a Peru–United States free trade agreement (FTA) was finally ratified by the U.S. Congress, replacing the Andean Trade Promotion and Drug Eradication Act, which awarded Peru and other Andean countries nonreciprocal preferential tariffs. A Peru–European Union (EU27) FTA is also being negotiated in the context of Peru's participation in the integration of the Andean Community (CAN). Finally, as of October 2008 Peru is concluding negotiations for a free trade agreement with China, its third major trading partner after the United States and the EU27. Although these agreements are expected to improve market access, their impact on the economic welfare of the beneficiary countries is dependent on the countries' structure of current tariffs and trade and the extent to which the new agreements result in trade diversion versus trade creation. The analysis shows that specific features of Peru's trade and tariff structures make the country a better candidate for a South-South FTA with China than for North-South FTAs with the United States or the EU27." from authors' abstractWTO, Free Trade Agreement, trade liberalization, CGE Modeling,

Social accounting matrices and multiplier analysis: An introduction with exercises

This training guide introduces development practitioners, policy analysts, and students to social accounting matrices (SAMs) and their use in policy analysis. There are already a number of books that explain the System of National Accounts and SAM multipliers—some of these are recommended at the end of this training guide. However, most books tend to be quite technical and move quickly from an introduction to more complex applications. By contrast, this guidebook uses a series of hands-on exercises to gradually introduce SAMs and multiplier analysis. It therefore complements more theoretical SAM and multiplier literature and provides a first step for development practitioners and students wishing to understand the strengths and limitations of these economic tools. It is also useful for policy analysts and researchers embarking on more complex SAM-based methodologies. One such methodology is computable general equilibrium (CGE) modeling, for which IFPRI has also developed a series of introductory exercises and a standard modeling framework.Social Accounting Matrices (SAM's), Policy analysis, complex applications, multiplier analysis, Computable General Equilibrium (CGE) model,

Is SAFTA trade creating or trade diverting?: A computable general equilibrium assessment with a focus on Sri Lanka

The Agreement on South Asian Free Trade Area (SAFTA) entered its second phase of implementation in 2008. The creation of a free trade area is expected to affect its participants—Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka—very differently given their diversity in terms of size, income, and structure of trade and protection. Using the 2004 MAcMapHS6-v2 database on measures of applied protection at the HS6 level and MIRAGE, a computable general equilibrium global model, this study examines the effects of SAFTA on trade and net income in the region. The magnitude of the effects will depend on initial levels of protection in the region and whether the agreement is trade diverting or trade creating. An important component of the SAFTA agreement is the exemption of products (sensitive list) from the trade liberalization process. Because such exclusion can restrict significantly the benefits from the regional trade agreement, we simulate the effects of SAFTA with and without sensitive products. Our findings show that among South Asian countries, Sri Lanka gains the most from the agreement because it initially has relatively low tariffs and faces high tariffs in the region. Exempting sensitive products from the agreement limits gains from trade for the lower-middle-income members of SAFTA but may be welfare enhancing for the least developed economies.South Asian Free Trade Area (SAFTA), trade liberalization, Computable General Equilibrium (CGE) model, welfare, trade, applied protection, income, FTA, Markets, Globalization,

Does trade liberalization enhance income growth and equity in Zimbabwe?: the role of complimentary policies

Using an agriculture-focused CGE model for Zimbabwe with 1991 as base period, this paper examines quantitatively the income and equity effects of trade liberalization in isolation and in conjunction with potentially complementary changes in fiscal and land policies. Trade policy reform alone (dismantling of import and foreign exchange controls, and reduction of import taxes to a low uniform rate) is shown to increase aggregate disposable household income significantly. However, the least income gain accrues to smallholder farm households, which account for about four-fifths of the poor in Zimbabwe, so the equity impact is unfavorable. Concurrent implementation with specific changes in government expenditure and tax policies and two alternative stylized land redistribution schemes yields differing outcomes in terms of aggregate household income growth and its distribution.Trade liberalization Econometric models., Zimbabwe Economic policy., Income distribution Zimbabwe., Fiscal policies ,

On boxes, contents, and users

An important component of the current debate about agriculture trade negotiations is whether further liberalization of trade and agricultural policies may help or hinder food security in WTO member countries. These concerns were formulated first, in Article 20 of the Agreement on Agriculture negotiated during the Uruguay Round, which indicated that negotiations should take into consideration, among other things, "non trade concerns"; and in its preamble, which mentioned as examples of those concerns, "food security and the need to protect the environment". They were also reaffirmed in the Doha Declaration, which declares that "the long-term objective" is "to establish a fair and market-oriented trading system through a program of fundamental reform", and confirmed that special and differential treatment will be granted to developing countries "to effectively take account of their development needs, including food security and rural development". Although the issue of food security and agricultural negotiations within the WTO has been raised both by industrialized ("multifunctionality" of agriculture) and developing countries, the discussion in the case of developing countries has included important policy objectives such as elimination of poverty and hunger (as cause and consequence of food insecurity). Concerned with the effects that further negotiations would have on the attainment of those objectives in poor countries, several developing countries have proposed the creation of a "Development Box" or a "Food Security Box". To contribute to this debate, the paper surveys and discusses in greater detail three main aspects of trade liberalization and food security within the WTO: the adequacy of the current WTO classification of countries according to their food security situation; the policy perspectives in industrialized countries and in developing countries; and the legal issues faced by developing countries. The paper concludes that a better classification is needed within the WTO to target food insecure countries, that many food security concerns can be addressed with specific clarifications and changes in the current language of the AoA, and that although developing countries may not be legally constrained to invest in food security, they lack the financial, human, and institutional resources to do so.World Trade Organization ,Poverty alleviation ,food security ,trade liberalization ,