The debate over the role of commodity storage in reducing price instability to the net benefit to society continues. Most of the early literature deals with stocks and price instability under price certainty. Little attention is given to the effects of stockholding on food security. Some of the earlier works based on welfare economics (Just, Hueth, and Schmitz 2004) include Waugh (1944), Oi (1961), Massell (1970), and Hueth and Schmitz (1972). Waugh concludes that consumers prefer price instability. As a result, there are costs from commodity storage used to generate price stability. Likewise, Oi concludes that producers prefer price instability; hence, storage is costly for producers. Massell demonstrates that in a market setting that included producers and consumers, society prefers price stability over instability. However, Schmitz (forthcoming) argues that this need not be the case given that both consumers and producers prefer price instability. His arguments are based on an explanation of why stocks are not achievable (Schmitz 2018a) and that producers prefer price instability regardless of the source of the instability (Schmitz 2018b). Later literature expanded the analyses to multi-products. For example, Turnovsky, Shalit, and Schmitz (1980) and Schmitz, Shalit, and Turnovsky (1981) using utility maximization models demonstrated that in the case of multi-products, producers, for example, prefer stability for a subset of the commodities produced but not for the entire set. Tisdell (1972) analyzed stock policy under uncertainty and concluded that the welfare gains from stabilization are highly dependent on the degree of market uncertainty. Feder, Just, and Schmitz (1980) presented a theory of the firm model where, under uncertainty, producers have several risk management tools, including storage. (References to additional papers can be found in Wright and Williams (1984)).
{"title":"Commodity Storage, Price Stabilization, and Food Security","authors":"A. Schmitz","doi":"10.1515/jafio-2019-0053","DOIUrl":"https://doi.org/10.1515/jafio-2019-0053","url":null,"abstract":"The debate over the role of commodity storage in reducing price instability to the net benefit to society continues. Most of the early literature deals with stocks and price instability under price certainty. Little attention is given to the effects of stockholding on food security. Some of the earlier works based on welfare economics (Just, Hueth, and Schmitz 2004) include Waugh (1944), Oi (1961), Massell (1970), and Hueth and Schmitz (1972). Waugh concludes that consumers prefer price instability. As a result, there are costs from commodity storage used to generate price stability. Likewise, Oi concludes that producers prefer price instability; hence, storage is costly for producers. Massell demonstrates that in a market setting that included producers and consumers, society prefers price stability over instability. However, Schmitz (forthcoming) argues that this need not be the case given that both consumers and producers prefer price instability. His arguments are based on an explanation of why stocks are not achievable (Schmitz 2018a) and that producers prefer price instability regardless of the source of the instability (Schmitz 2018b). Later literature expanded the analyses to multi-products. For example, Turnovsky, Shalit, and Schmitz (1980) and Schmitz, Shalit, and Turnovsky (1981) using utility maximization models demonstrated that in the case of multi-products, producers, for example, prefer stability for a subset of the commodities produced but not for the entire set. Tisdell (1972) analyzed stock policy under uncertainty and concluded that the welfare gains from stabilization are highly dependent on the degree of market uncertainty. Feder, Just, and Schmitz (1980) presented a theory of the firm model where, under uncertainty, producers have several risk management tools, including storage. (References to additional papers can be found in Wright and Williams (1984)).","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2019-0053","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47830314","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Many countries in the developing world use public stockholding programs to stabilize prices for both farmers and consumers. Governments directly purchase and store staple grains, and then sell them to processors or consumers, often at heavily subsidized prices. Despite the substantial costs of these stockholding programs, little is known about their effectiveness in mitigating retail price swings. This paper estimates the effects of purchase and sales activities of the Zambian Food Reserve Agency (FRA) on monthly maize market prices across more than thirty markets in Zambia from 2003 to 2008. To deal with the endogeneity in purchases and sales, we use predicted FRA purchase and sales targets as instrumental variables. Controlling for other policies, we find evidence that FRA activities stabilize retail prices in major district markets within the cropping year. Results show that FRA purchases raise local prices for surplus maize producers about 5 % on average at the time of harvest, and that FRA sales help lower the prices to consumers during the lean season up to 7 %. However, we find limited evidence that the FRA is able to reduce price volatility between years.
{"title":"Effects of Stockholding Policy on Maize Prices: Evidence from Zambia","authors":"Yujun Zhou, K. Baylis","doi":"10.1515/jafio-2019-0057","DOIUrl":"https://doi.org/10.1515/jafio-2019-0057","url":null,"abstract":"Abstract Many countries in the developing world use public stockholding programs to stabilize prices for both farmers and consumers. Governments directly purchase and store staple grains, and then sell them to processors or consumers, often at heavily subsidized prices. Despite the substantial costs of these stockholding programs, little is known about their effectiveness in mitigating retail price swings. This paper estimates the effects of purchase and sales activities of the Zambian Food Reserve Agency (FRA) on monthly maize market prices across more than thirty markets in Zambia from 2003 to 2008. To deal with the endogeneity in purchases and sales, we use predicted FRA purchase and sales targets as instrumental variables. Controlling for other policies, we find evidence that FRA activities stabilize retail prices in major district markets within the cropping year. Results show that FRA purchases raise local prices for surplus maize producers about 5 % on average at the time of harvest, and that FRA sales help lower the prices to consumers during the lean season up to 7 %. However, we find limited evidence that the FRA is able to reduce price volatility between years.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2019-0057","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49106494","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The present study investigates the underlying factors of price stickiness in German food retailing using fluid milk as a case study. We distinguish the duration between two actual price changes and two regular price changes as measures for price stickiness. Especially in the case of private labels, the choice of proxy for price rigidity has important implications. If we consider (regular) price changes, private label products are more (less) rigid than national brands. Price rigidity increases in the product’s average price. Prices of low priced private labels are rather flexible. Price adjustment of high priced private labels is similarly sluggish compared to national brands. We rationalize this finding with variable mark-ups under imperfect competition. In line with previous research, we find that price stickiness also depends on product attributes, retail formats, menu costs, psychological price points, and time-varying market conditions.
{"title":"Regular Price Stickiness in German Food Retailing","authors":"P. Holzer, Thomas Bittmann","doi":"10.1515/jafio-2019-0027","DOIUrl":"https://doi.org/10.1515/jafio-2019-0027","url":null,"abstract":"Abstract The present study investigates the underlying factors of price stickiness in German food retailing using fluid milk as a case study. We distinguish the duration between two actual price changes and two regular price changes as measures for price stickiness. Especially in the case of private labels, the choice of proxy for price rigidity has important implications. If we consider (regular) price changes, private label products are more (less) rigid than national brands. Price rigidity increases in the product’s average price. Prices of low priced private labels are rather flexible. Price adjustment of high priced private labels is similarly sluggish compared to national brands. We rationalize this finding with variable mark-ups under imperfect competition. In line with previous research, we find that price stickiness also depends on product attributes, retail formats, menu costs, psychological price points, and time-varying market conditions.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2019-0027","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43688092","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Storage policies are used in many countries to smooth price volatility and thereby support food security. When there is a global decrease in food supply caused by a number of extreme weather effects, food reserves are expected to reduce the potential negative implications for households with low purchasing power. In this paper, the properties of such a stockpiling policy are assessed and compared to a policy with storage but without stockpiling. The results show that a stockholding policy is an expensive strategy that generates economic benefits only in extreme cases.
{"title":"Storage Policies: Stockpiling Versus Immediate Release","authors":"J. Wesseler","doi":"10.1515/jafio-2019-0055","DOIUrl":"https://doi.org/10.1515/jafio-2019-0055","url":null,"abstract":"Abstract Storage policies are used in many countries to smooth price volatility and thereby support food security. When there is a global decrease in food supply caused by a number of extreme weather effects, food reserves are expected to reduce the potential negative implications for households with low purchasing power. In this paper, the properties of such a stockpiling policy are assessed and compared to a policy with storage but without stockpiling. The results show that a stockholding policy is an expensive strategy that generates economic benefits only in extreme cases.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2019-0055","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41333310","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
F. Bachewe, B. Minten, Alemayehu Seyoum Taffesse, K. Pauw, Alethia Cameron, Tirsit Genye Endaylalu
Abstract While storage losses at the farm are often assumed to be an important contributor to presumed large postharvest losses in developing countries, reliable and representative data on these losses are often lacking. We study farmers’ storage decisions and self-reported storage losses for grains based on two large-scale household surveys conducted in major agricultural areas in Ethiopia. We show that a relatively large share of grain production is stored by farm households for own consumption and that storage technologies are rudimentary. Farmers’ self-reported storage losses amount to an average of 4 % of all grains stored and 2 % of total harvest. These storage losses differ significantly by socioeconomic variables and wealth, as well as by crop and humidity. We further see strong spatial heterogeneity in storage losses being significantly higher in southwest Ethiopia. Efforts to scale up the adoption of improved storage technologies to reduce storage losses at the farm level should consider these characteristics.
{"title":"Farmers’ Grain Storage and Losses in Ethiopia","authors":"F. Bachewe, B. Minten, Alemayehu Seyoum Taffesse, K. Pauw, Alethia Cameron, Tirsit Genye Endaylalu","doi":"10.1515/JAFIO-2019-0059","DOIUrl":"https://doi.org/10.1515/JAFIO-2019-0059","url":null,"abstract":"Abstract While storage losses at the farm are often assumed to be an important contributor to presumed large postharvest losses in developing countries, reliable and representative data on these losses are often lacking. We study farmers’ storage decisions and self-reported storage losses for grains based on two large-scale household surveys conducted in major agricultural areas in Ethiopia. We show that a relatively large share of grain production is stored by farm households for own consumption and that storage technologies are rudimentary. Farmers’ self-reported storage losses amount to an average of 4 % of all grains stored and 2 % of total harvest. These storage losses differ significantly by socioeconomic variables and wealth, as well as by crop and humidity. We further see strong spatial heterogeneity in storage losses being significantly higher in southwest Ethiopia. Efforts to scale up the adoption of improved storage technologies to reduce storage losses at the farm level should consider these characteristics.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/JAFIO-2019-0059","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45570866","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract In Ethiopia, 95 % of total agricultural output comes from some 11 million smallholder farmers. A relatively significant proportion of the food grown in the country is stored at the household level by smallholder farm households, mainly for own consumption. Storage losses, generally perceived to be high, have significant implications for household food security. This study provides a microeconomic perspective of commodity storage, post-harvest losses (PHL), and food security in Ethiopia. It relies on a large-scale household panel dataset, the Ethiopia Socioeconomic Survey (ESS), which comprises 4,000 households in rural areas and small towns that are representative of the most populous regions of Ethiopia. The data were collected as part of the World Bank’s LSMS-ISA project; it involved three “waves” or collection periods: 2011/12, 2013/14, and 2015/16. Data from only the second and third waves were used to estimate a random-effects probit model. Findings show that the magnitude of PHL is substantial: damage is due to rodents and rotting related to traditional storage facilities, poor ventilation, humidity/temperature, and undesirable post-harvest handling. Findings also show that PHL decreases with better market access and improved storage practices. Mitigation measures that improve and promote modern grain storage facilities appear to provide a double dividend – reducing PHL while addressing food insecurity.
{"title":"Commodity Storage, Post-Harvest Losses, and Food Security: Panel Data Evidence from Ethiopia","authors":"Z. Gebreegziabher, G. V. van Kooten","doi":"10.1515/jafio-2019-0058","DOIUrl":"https://doi.org/10.1515/jafio-2019-0058","url":null,"abstract":"Abstract In Ethiopia, 95 % of total agricultural output comes from some 11 million smallholder farmers. A relatively significant proportion of the food grown in the country is stored at the household level by smallholder farm households, mainly for own consumption. Storage losses, generally perceived to be high, have significant implications for household food security. This study provides a microeconomic perspective of commodity storage, post-harvest losses (PHL), and food security in Ethiopia. It relies on a large-scale household panel dataset, the Ethiopia Socioeconomic Survey (ESS), which comprises 4,000 households in rural areas and small towns that are representative of the most populous regions of Ethiopia. The data were collected as part of the World Bank’s LSMS-ISA project; it involved three “waves” or collection periods: 2011/12, 2013/14, and 2015/16. Data from only the second and third waves were used to estimate a random-effects probit model. Findings show that the magnitude of PHL is substantial: damage is due to rodents and rotting related to traditional storage facilities, poor ventilation, humidity/temperature, and undesirable post-harvest handling. Findings also show that PHL decreases with better market access and improved storage practices. Mitigation measures that improve and promote modern grain storage facilities appear to provide a double dividend – reducing PHL while addressing food insecurity.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2019-0058","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45044539","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract We revisit the underlying economics of commodity storage and its relation to food security by first clarifying the standard model used to analyze the economic efficiency and distributional effects of commodity storage programs. We find that producers prefer stabilization, although their incomes are more variable, while consumers are indifferent. However, numerical simulations indicate that physical stocks will build up inexorably over a sustained period or the government will need to raise prices continuously over a prolonged period. For the least developed countries facing fluctuating world prices, government should guarantee the price received by producers because, with price uncertainty, farmers could experience losses even under a ‘good’ weather outcome; this would guarantee the producer price, benefitting farmers, while allowing the consumer price to vary with the world price benefits consumers as they prefer price instability. In some cases, however, the government may wish to impose a price ceiling so that households living at or near subsistence can afford to buy grain – an argument based on the grounds of food security. Numerical simulations indicate that such a mixed-price policy increases the wellbeing of both consumers and producers. Physical storage is not a necessity.
{"title":"Is Commodity Storage an Option for Enhancing Food Security in Developing Countries?","authors":"G. C. van Kooten, A. Schmitz, P. Kennedy","doi":"10.1515/JAFIO-2019-0054","DOIUrl":"https://doi.org/10.1515/JAFIO-2019-0054","url":null,"abstract":"Abstract We revisit the underlying economics of commodity storage and its relation to food security by first clarifying the standard model used to analyze the economic efficiency and distributional effects of commodity storage programs. We find that producers prefer stabilization, although their incomes are more variable, while consumers are indifferent. However, numerical simulations indicate that physical stocks will build up inexorably over a sustained period or the government will need to raise prices continuously over a prolonged period. For the least developed countries facing fluctuating world prices, government should guarantee the price received by producers because, with price uncertainty, farmers could experience losses even under a ‘good’ weather outcome; this would guarantee the producer price, benefitting farmers, while allowing the consumer price to vary with the world price benefits consumers as they prefer price instability. In some cases, however, the government may wish to impose a price ceiling so that households living at or near subsistence can afford to buy grain – an argument based on the grounds of food security. Numerical simulations indicate that such a mixed-price policy increases the wellbeing of both consumers and producers. Physical storage is not a necessity.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/JAFIO-2019-0054","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48035937","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper examines the role of storage and trade on food security with respect to milled rice in India for the period 1966–2013. Data on food balances, prices, and population obtained from FAOSTAT allow for the observation of the status quo with storage and trade. Then, using a spatial equilibrium framework, the outcomes without storage or trade are simulated. Our results are consistent with the literature with respect to welfare effects. Storage results in net welfare gains to society, although producers gain while consumers lose. Producers receive a welfare gain from net exports while consumers gain from net imports. From a food security perspective, the use of storage has provided benefits to consumers by increasing stability in the market, as seen through decreased standard deviation in both domestic rice prices and per capita availability. The results are mixed with respect to stability from trade.
{"title":"The Role of Storage and Trade in Food Security","authors":"P. Kennedy, A. Schmitz, G. C. van Kooten","doi":"10.1515/jafio-2019-0056","DOIUrl":"https://doi.org/10.1515/jafio-2019-0056","url":null,"abstract":"Abstract This paper examines the role of storage and trade on food security with respect to milled rice in India for the period 1966–2013. Data on food balances, prices, and population obtained from FAOSTAT allow for the observation of the status quo with storage and trade. Then, using a spatial equilibrium framework, the outcomes without storage or trade are simulated. Our results are consistent with the literature with respect to welfare effects. Storage results in net welfare gains to society, although producers gain while consumers lose. Producers receive a welfare gain from net exports while consumers gain from net imports. From a food security perspective, the use of storage has provided benefits to consumers by increasing stability in the market, as seen through decreased standard deviation in both domestic rice prices and per capita availability. The results are mixed with respect to stability from trade.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2019-0056","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45499499","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Online reviews influence consumer decision making, retrieving valuable information about consumers to the companies. We investigate how review valence, platform type, and review credibility affect purchase intention (visit to restaurants). We use an experimental 2 × 4 between-subjects factorial design with two platforms (company websites and independent websites) and four types of review valences (neutral, negative, positive and balanced), with data of 256 respondents. Results show that purchase intentions are influenced by review valence. The effect is moderated by perceived review credibility. Review platform has no moderating effect on the influence of review valence. Results provide practical information for marketers in the service industry.
{"title":"The Influence of Online Reviews on Restaurants: The Roles of Review Valence, Platform, and Credibility","authors":"Anne-Wil van Lohuizen, Andres A. Trujillo‐Barrera","doi":"10.1515/jafio-2018-0020","DOIUrl":"https://doi.org/10.1515/jafio-2018-0020","url":null,"abstract":"Abstract Online reviews influence consumer decision making, retrieving valuable information about consumers to the companies. We investigate how review valence, platform type, and review credibility affect purchase intention (visit to restaurants). We use an experimental 2 × 4 between-subjects factorial design with two platforms (company websites and independent websites) and four types of review valences (neutral, negative, positive and balanced), with data of 256 respondents. Results show that purchase intentions are influenced by review valence. The effect is moderated by perceived review credibility. Review platform has no moderating effect on the influence of review valence. Results provide practical information for marketers in the service industry.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2018-0020","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41377971","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The divergence in approaches to regulation of genetically modified organisms (GMOs) among countries is a contentious policy issue that has externalities that inhibit trade in agricultural products. One result is that approvals of GMO events is internationally asynchronous. Countries whose approval processes are slower or more stringent often impose import bans or other non-tariff barriers on imports of GM products they have rejected or have yet to approve. These trade barriers have been the subject of considerable investigation. As more and more GMO events are approved in some countries, but not in others, the probability of unintended mingling of GM crops in shipments of non-GM crops increases. Shipments of non-GM crops with a low level presence of non approved GM crops are routinely rejected by importing countries. This growing disruption to trade has not received a great deal of attention. This paper uses information from the GMO research and commercialization pipeline to estimate the potential impact of increases in mingling on international trade flows using a CGE model – GTAP. The results suggest that the growing potential for mingling will have a considerable detrimental impact on trade flows and, hence, tolerance levels should be an important question for multilateral trade negotiations.
{"title":"The GMO Pipeline, Import Bans and Asynchronous Approvals – The Impact on Agricultural Trade","authors":"Marija Pavleska, W. Kerr","doi":"10.1515/JAFIO-2019-0015","DOIUrl":"https://doi.org/10.1515/JAFIO-2019-0015","url":null,"abstract":"Abstract The divergence in approaches to regulation of genetically modified organisms (GMOs) among countries is a contentious policy issue that has externalities that inhibit trade in agricultural products. One result is that approvals of GMO events is internationally asynchronous. Countries whose approval processes are slower or more stringent often impose import bans or other non-tariff barriers on imports of GM products they have rejected or have yet to approve. These trade barriers have been the subject of considerable investigation. As more and more GMO events are approved in some countries, but not in others, the probability of unintended mingling of GM crops in shipments of non-GM crops increases. Shipments of non-GM crops with a low level presence of non approved GM crops are routinely rejected by importing countries. This growing disruption to trade has not received a great deal of attention. This paper uses information from the GMO research and commercialization pipeline to estimate the potential impact of increases in mingling on international trade flows using a CGE model – GTAP. The results suggest that the growing potential for mingling will have a considerable detrimental impact on trade flows and, hence, tolerance levels should be an important question for multilateral trade negotiations.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/JAFIO-2019-0015","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45469508","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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