Do subsidies matter in food price stabilization? Evidences from Ethiopia in a computable general equilibrium framework

In the poorest countries like Ethiopia the spillover effects of a soaring food price is unbearable. To mitigate the recent rise in food prices and the burden on urban poor consumers, policy makers have considered various measures. A recent shift from subsidizing oil to grain to ease the spiraling cost of food is one attempt the Ethiopian government has made so far. To this end, the government has removed an $800m annual subsidy on petroleum products and used the money to combat rising grain prices. Using the standard GTAP model and the recent GTAP Africa database, this paper simulates the overall implication of 5 and 10 percent increase of subsidy on wheat. Regarding the impact on prices, the simulation result tells us that prices have indeed fall. At macro level, the result reveals subsidy on wheat leads to a decline in the overall trade balance. In terms of welfare, the intervention is likely to have a positive impact.Food policy; price policy; WTO; Ethiopia; GTAP

The impact of banning export of cereals in response to soaring food prices: Evidences from Ethiopia using the new GTAP African database

In the poorest countries like Ethiopia the spillover effects of a soaring food price is unbearable. To mitigate the recent rise in food prices and the burden on urban poor consumers, different measures have been considered by policy makers. Recently, Ethiopia banned the export of all grain products in a bid to stem huge price hikes. The export of indigenous grains, including the staple grains, like teff, maize, sorghum, and wheat are suspended indefinitely. Using the standard GTAP model and the recent GTAP Africa database, this paper simulates the overall implication of banning export of grains. Regarding the impact on prices, the simulation result tells us that prices are likely to fall. At macro level, the result reveals trade balance will not be decline following such actions. However, it has been shown that in terms of overall welfare the policy has a devastating impact as the country will likely to lose welfare equivalent of $ 148 million.Food price inflation;- export ban;- WTO:- Ethiopia;- GTAP

Agricultural Efficiency Gains and Trade Liberalization in Sudan

The traditional agriculture in Sudan occupies 60% of the total cultivated land and employs 65% of the agricultural population. Nevertheless, it is characterized by its low crop productivity, which is mainly driven by low technical efficiency, while drought and civil conflicts threaten most of its areas countrywide. Therefore, it has contributed only an average of 16% to the total agricultural GDP during the last decade. This paper addresses from an empirical point of view the sectoral and macroeconomic implications of agricultural efficiency improvement in Sudan and assesses the efficiency gains under the assumption of trade liberalization. Efficiency improvement experiments are implemented by augmenting the efficiency parameters of labor, capital, and land in a Computable General Equilibrium (CGE) framework. The CGE model of the study relies on the newly produced Sudanese Social Accounting Matrix (SAM), which provides data on 10 agricultural sectors, 10 industrial sectors and 13 service sectors. Results show that improving the agricultural efficiency would lead to improvements in GDP, welfare level, and trade balance. In addition it would also improve the output and competitiveness of the Sudanese agricultural exports and increase their strength to face the challenges of liberalization.Agricultural efficiency, liberalization, Sudan SAM, CGE analysis, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Consumer/Household Economics, Crop Production/Industries, Food Security and Poverty, Labor and Human Capital, Land Economics/Use, Production Economics, Productivity Analysis, D2, D5, D6, E1, E2, F1, F2, H2,

The Integration of Palestinian-Israeli Labour Markets: A CGE Approach

Replaced with revised version of paper 07/12/11.labor market, CGE, Labor and Human Capital,

A 2004 social accounting matrix for Israel : documentation of an economy-wide database with a focus on agriculture, the labour market, and income distribution

This document describes the Israeli Social Accounting Matrix (SAM) for the year 2004, developed by the Agricultural and Food Policy Group at the University of Hohenheim. The SAM is a part of a larger research project which aims to analyse several economic, trade, and labour policies in the context of economic integration of agriculture between Israel and the West Bank. Data are obtained from various sources in Israel. Sources include the Israeli Central Bureau of Statistics (ICBS), the Central Bank of Israel (CBI), and the Israeli Tax Authority (ITA). Data from sources outside of Israel are used to fill-in some gaps in the domestic reports. External sources include the World Trade Organization (WTO), the Organisation for Economic Co-operation and Development (OECD), and the World Bank. The SAM provides data on 47 sectors with activities separated from commodities, 36 labour force types, 10 household groups, as well as 17 tax accounts in addition to 37 accounts reserved for taxes on production factors. A topdown approach is pursued by first building a balanced macro SAM which is consistent with 2004 national account data. Subsequently, the macro SAM is disaggregated into a micro SAM which is balanced in several steps.Dieser Bericht beschreibt die ?Social Accounting Matrix? (SAM) für Israel für das Jahr 2004, welche am Fachgebiet für Agrar- und Ernährungspolitik der Universität Hohenheim erstellt wurde. Die israelische SAM ist Teil eines größeren Forschungsprojektes mit dem Ziel verschiedene ökonomische, Handels- und Arbeitsmarktpolitiken im Kontext der ökonomischen Integration von landwirtschaftlichen Märkten zwischen Israel und dem Westjordanland zu analysieren. Es werden Daten von verschiedenen israelischen Quellen verwandt: dem israelischen statistischem Amt (ICBS), der israelischen Zentralbank (BOI) und der israelischen Steuerbehörde (ITA). Diese werde durch nicht-israelische Quellen ergänzt, welche die Welthandelsorganisation (WTO), die Organisation für wirtschaftliche Zusammenarbeit und Entwicklung (OECD), sowie die Weltbank umfassen. Die SAM differenziert 47 Sektoren, wobei Aktivitäten und Güter unterschieden werden. Ferner beinhaltet die SAM 36 Klassen des Produktionsfaktors Arbeit und 10 unterschiedliche Haushaltsgruppen, die durch 54 verschiedene Steuern (davon 37 auf Produktionsfaktoren) ergänzt werden. Die Erstellung der SAM erfolgt folgendermaßen: zuerst wird eine mit den israelischen volkswirtschaftlichen Daten für 2004 konsistente Makro-SAM erstellt. Diese wird im nächsten Schritt disaggregiert in eine detaillierte Mikro-SAM, welche in mehreren Stufen ausbalanciert wird

Malaria control and elimination in Kenya: economy-wide benefits and regional disparities

Background Malaria remains a public health problem in Kenya despite several concerted control efforts. Empirical evidence regarding malaria effects in Kenya suggests that the disease imposes substantial economic costs, jeopardizing the achievement of sustainable development goals. The Kenya Malaria Strategy (2019–2023), which is currently being implemented, is one of several sequential malaria control and elimination strategies. The strategy targets reducing malaria incidences and deaths by 75% of the 2016 levels by 2023 through spending around Kenyan Shillings 61.9 billion over 5 years. This paper assesses the economy-wide implications of implementing this strategy. Methods An economy-wide simulation model is calibrated to a comprehensive 2019 database for Kenya, considering different epidemiological zones. Two scenarios are simulated with the model. The first scenario (GOVT) simulates the annual costs of implementing the Kenya Malaria Strategy by increasing government expenditure on malaria control and elimination programmes. The second scenario (LABOR) reduces malaria incidences by 75% in all epidemiological malaria zones without accounting for the changes in government expenditure, which translates into rising the household labour endowment (benefits of the strategy). Results Implementing the Kenya Malaria Strategy (2019–2023) enhances gross domestic product at the end of the strategy implementation period due to more available labour. In the short term, government health expenditure (direct malaria costs) increases significantly, which is critical in controlling and eliminating malaria. Expanding the health sector raises the demand for production factors, such as labour and capital. The prices for these factors rise, boosting producer and consumer prices of non-health-related products. Consequently, household welfare decreases during the strategy implementation period. In the long run, household labour endowment increases due to reduced malaria incidences and deaths (indirect malaria costs). However, the size of the effects varies across malaria epidemiological and agroecological zones depending on malaria prevalence and factor ownership. Conclusions This paper provides policymakers with an ex-ante assessment of the implications of malaria control and elimination on household welfare across various malaria epidemiological zones. These insights assist in developing and implementing related policy measures that reduce the undesirable effects in the short run. Besides, the paper supports an economically beneficial long-term malaria control and elimination effect.Peer Reviewe

Trade policy in a sovereign Palestinian State: What are the options in a final settlement?

This paper quantifies the economy‐wide effects of different trade policies on the Palestinian economy, using a detailed database and a general equilibrium model adjusted to the particularities of the Palestinian economy. The findings show that a liberal and non‐discriminatory trade regime provides the highest benefits for the Palestinian economy, in terms of welfare effects, GDP growth and job creation. The choice of an exchange rate regime has a considerable influence on the effects of trade policy. Accordingly, a full control over trade and monetary policy instruments could improve the capacity of the Palestinian National Authority to address the prevailing high unemployment and sluggish economic growth.Deutsche Forschungsgemeinschaft http://dx.doi.org/10.13039/501100001659Economic Research Forum http://dx.doi.org/10.13039/501100015610Peer Reviewe

Do subsidies matter in food price stabilization? Evidences from Ethiopia in a computable general equilibrium framework

In the poorest countries like Ethiopia the spillover effects of a soaring food price is unbearable. To mitigate the recent rise in food prices and the burden on urban poor consumers, policy makers have considered various measures. A recent shift from subsidizing oil to grain to ease the spiraling cost of food is one attempt the Ethiopian government has made so far. To this end, the government has removed an $800m annual subsidy on petroleum products and used the money to combat rising grain prices. Using the standard GTAP model and the recent GTAP Africa database, this paper simulates the overall implication of 5 and 10 percent increase of subsidy on wheat. Regarding the impact on prices, the simulation result tells us that prices have indeed fall. At macro level, the result reveals subsidy on wheat leads to a decline in the overall trade balance. In terms of welfare, the intervention is likely to have a positive impact

Do grain reserves necessarily contribute to prices stability and food security in Sudan? An assessment

AbstractMost governments in Africa implement policies aiming to stabilize the prices of staple foods, which often include building up grain reserves, besides other trade measures insulating their domestic market from the world market. The mechanism should ideally work as follows, grains should be bought and stored from areas, during the surplus seasons (after harvest) so as to assure fair prices to producers and should be distributed during deficit seasons, in deficit areas besides in cases of emergencies. However, ideal approaches are not necessarily followed in many developing countries due to different constraints and situations. The Strategic Reserve Corporation (SRC) is an institution that is established ten years ago to play such a role in Sudan. This paper tries to assess the performance of the SRC against the overall goals and to study the related obstacles if any. We use a sample of 112 respondents from the SRC staff, related and grain farmers as our data source. Results of the research revealed numerous financial and administrative constraints that obstruct SRC from playing the intended role, which need to be considered so as to contribute to price stability and food security in Sudan

Climate change and agriculture in the Sudan: Impact pathways beyond changes in mean rainfall and temperature

Several environmental changes have occurred in the Sudan in the past; several are ongoing; and others are projected to happen in the future. The Sudan has witnessed increases in temperature, floods, rainfall variability, and concurrent droughts. In a country where agriculture, which is mainly rainfed, is a major contributor to gross domestic product, foreign exchange earnings, and livelihoods, these changes are especially important, requiring measurement and analysis of their impact. This study not only analyzes the economy-wide impacts of climate change, but also consults national policy plans, strategies, and environmental assessments to identify interventions which may mitigate the effects. We feed climate forcing, water demand, and macro-socioeconomic trends into a modelling suite that includes models for global hydrology, river basin management, water stress, and crop growth, all connected to the International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT). The outcomes of this part of the modeling suite are annual crop yields and global food prices under various climate change scenarios until 2050. The effects of such changes on production, consumption, macroeconomic indicators, and income distribution are assessed using a single country dynamic Computable General Equilibrium (CGE) model for the Sudan. Additionally, we introduce yield variability into the CGE model based on stochastic projections of crop yields until 2050. The results of the model simulations reveal that, while the projected mean climate changes bring some good news for the Sudan, extreme negative variability costs the Sudan cumulatively between 2018 and 2050 US$109.5 billion in total absorption and US$ 105.5 billion in GDP relative to a historical mean climate scenario without climate change