Article

Argentina; country case study of agricultural prices and subsidies

Authors:
To read the full-text of this research, you can request a copy directly from the authors.

Abstract

Summary

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... Corporación Universitaria del Meta-UNIMETA (Abd-el-Rahman, 1991), la capacidad de contaminar (Lee & Roland-Holst, 1997), los impuestos y subsidios (Reca, 1980), el sistema y estrategia de distribución (Rodríguez, 2006), las inversiones directas extranjeras (Denisia, 2010), la tecnología (Suri, 2011) y las diferencias demográficas entre países (Cai y Stoyanov, 2016). ...
Book
Full-text available
Una de las labores más difíciles para los miembros de una sociedad consiste en la reflexión de su propia realidad y entorno, estando inmerso en ellos. Este es precisamente el propósito de los autores del libro: Conflicto y Construcción de paz. El texto se caracteriza por el abordaje pluridisciplinar de áreas como la psicología, la economía, ingeniería, la contaduría, la economía, la física, la administración, el derecho, la biología, la agronomía, entre otras. Y corresponde a un esfuerzo por parte de la Corporación Universitaria del Meta de difundir investigaciones que emplean varias herramientas y análisis para el abordaje y la solución de problemas de la realidad colombiana y latinoamericana. El libro no tiene la pretensión de presentar de forma exhaustiva una síntesis de todos los retos y posibilidades a los que se enfrenta la sociedad colombiana, pero sí enfatizar en algunas que lleven a la comprensión, la reflexión y estudio del entorno colombiano desde diferentes miradas. Esto convierte a este maravilloso libro en un insumo para futuras investigaciones, para la comprensión de problemas específicos de una sociedad.
... Evidence indicates that aggregate agricultural supply response tends to be smaller than the response of individual crops. Most of the empirical estimates of aggregate agricultural supply response have been largely based on variants of Nerlove's (1958) formulation (see, for example, Reca, 1980;Bapna, 1981;Chhibber, 1982;Bond, 1983). These studies produced broadly similar results with short-run aggregate supply elasticities around 0.2 and long-run elasticities of about 0.4. ...
Article
Given the negative impact of persistent unsustainable fiscal deficits on the Nigerianeconomy, there is now a consensus among interested parties on the need to address the problem effectively. The literature suggests theree approaches for this purpose: increasein revenue, reduction in expenditure, or a continuation of both. An appraisal of the budgetary process in Nigeria shows that annual expenditure proposals are always anchored on projected revenue, thus the accuracy of revenue projection is a necessary condition for devising an appropriate framework for fiscal deficit management in Nigeria. This study, therefore, evaluates the productivity of the tax system for the period 1970- 1999 to devise a reasonably accurate estimation of Nigeria's sustainable revenue profile. This will assist in the design of an appropriate expenditure profile as a means of averting the persistent unsustainable fiscal deficit in the country. Overall, the study reports a satisfactory level of productivity of the tax system. Although the advent of the oil boom, encouraged some laxity in the management of non-oil revenue sources, this was rectified to a reasonable extent with the commencement of the structural adjustment programme. The study concludes that the current revenue profile is sustainable, with little prospectfor significant improvement in the short run. It also suggests that a significant reduction in public expenditure and prudent management of financial resources are the most feasible solutions to the problem of unsustainable fiscal deficit in Nigeria. Finally, the report underscores the urgent need for the improvement of the tax information system to enhance the evaluation of the performance of the Nigerian tax system and facilitate adequate macroeconomic planning and implementation.
... Several studies have addressed the long-run consequences of Argentina's price discrimination against agriculture including among others Colome et. al. (2011), Diaz Alejandro (1975, Nogués (2011 and2015), Reca (1980), and Sturzenegger and Salazni (2007). barriers, an opportunity for further industrialization of primary products by establishing escalated export taxes through higher rates on primary inputs than on the processed products. ...
Chapter
Full-text available
For developing countries, the Uruguay Round had mixed results: some positive, some negative, and some negotiating areas only made marginal progress. In our view, adoption of the WTO rules for administering import barriers on contingent protection (mainly antidumping and countervailing measures) entailed a major positive institutional shift away from the high degree of trade policy arbitrariness that prevailed before. In contrast, strong pressures against liberalization of agricultural trade resulted in the failure of this Round to establish rules on primary agricultural export barriers. Included among these are escalated export taxes that entail input subsidies. This chapter reviews the experience of importing countries’ contingent protection measures that sought to compensate the input subsidies from escalated export taxes in biodiesel imports from Argentina. The end result of a WTO that is empty of rules on primary agricultural export barriers has been the implementation of arbitrary policies taken by both the exporting and some importing countries. We conclude that in much the same way that WTO rules on import barriers reduced the high degree of arbitrariness that used to characterize developing countries’ import-substitution policies, multilateral rules on agricultural export barriers would imply a further positive institutional change for the benefit of both exporting and importing countries.
... Several studies have addressed the long--run consequences of Argentina's price discrimination against agriculture including among others Colome et. al. (2011), Diaz Alejandro (1975, Nogués (2016), Reca (1980), andSturzenegger andSalazni (2007). 6 Wherever export QRs were applied, easy rents were created, and over these years their dollar value reached a minimum of USD 9 billion (Nogues 2016). ...
Preprint
Abstract This paper reviews the recent experience of importing countries’ contingent protection measures against input subsidies from escalated export taxes in biodiesel imports from Argentina. The analysis indicates that the end result of a WTO that is empty of rules on primary agricultural export barriers opens the door for arbitrary policies by exporting countries and leaves importing countries without a legal right to impose compensating contingent measures. This was made clear by the findings of the WTO Panel and Appellate Body in the Argentina-EU biodiesel case. Nevertheless, under Trump’s charge against the multilateral trading system, since December 2019 the WTO Appellate Body remains non-functioning and therefore, importing countries can now impose counteracting measures without risking a negative legal finding as the EU faced. As illustrated by the US contingent measures, a non-functioning Appellate Body now facilitates arbitrary measures by importing countries. The obvious solution to this mess is to include WTO rules on agricultural export barriers, and reinstate the the Appellate Body to normal functioning.
... It arrives at very low price elasticities for timeseries analysis and at negative values for cross-section analysis. Reca (1989) estimates long-run elasticities of food production between 0.42 and 0.52 for Argentina but Parkin (1991) Hence, production in the primary sector is determined by the outputcapital ratio u 1 as shown by equation (1). The stock of capital k 1 is assumed to be non-shiftable. ...
Article
Full-text available
This paper presents a dual economy model of the fix-price/flex-price kind that explicitly allows for the existence of a government budget constraint in a fully open economy. Both the external and fiscal closures resemble very much the contemporary experience of several Latin American countries, where fiscal discipline and fix exchange rate systems have been the norm. Thus, within the public sector, it is assumed that public investment is the adjustment variable, while foreign reserves variation adjusts the external balance. Short-run impacts of policy-induced variables and changes in exogenous external financing are analysed. Relevant trade-offs, especially between output and inflation, follow from an analysis in which the time perspective is rather short. However, in the medium term, some balancing forces in the economy can moderate the trade-offs. We show among a wide range of events and policy options that this is the case of debt relief or a concerted lending strategy. Copyright Blackwell Publishing Ltd 2005.
... Evidence indicates that aggregate agricultural supply response tends to be smaller than the response of individual crops. Most of the empirical estimates of aggregate agricultural supply response have been largely based on variants of Nerlove's (1958) formulation (see, for example, Reca, 1980;Bapna, 1981;Chhibber, 1982;Bond, 1983). These studies produced broadly similar results with short-run aggregate supply elasticities around 0.2 and long-run elasticities of about 0.4. ...
Article
Domestic policy in Sudan, as in many developing countries, has discriminated against agriculture and exports. The agricultural sector over the period 1980-1990, and on all counts, showed poor performance related to both domestic and external factors. In an attempt to improve the performance of agriculture a number of stabilization and strucural adjustment programmes were implemented during the period 1980-1993.
... They showed that industrial protection policy increases the input costs of agricultural activities, thereby reducing effective protection below nominal protection [e.g. Reca (1980) on Argentina; Cuddihy (198 0) on Egypt; Gotsch and Brown (1980) on Pakistan; Bertrand (1980) on Thailand and Bovet and Unnevehr (1981) on Togo] 1 . ...
Article
Full-text available
This paper investigates quantitatively the effects of trade policy on agriculture in the empirical context of Peninsular Malaysia using a SAM-based multi-sectoral, general equilibrium model. The focus of the analysis is on the economy-wide implications of changes in tariffs on import-substituting manufacturing activities. In general, the results bear out the expectation that industrial protection distorts incentives favoring manufacturing and nontradable activities over agriculture as a whole. Whereas this result is familiar from other recent studies, the general-equilibrium approach allows many additional disaggregate findings. Industrial protection in Malaysia taxes, e.g., not all agricultural sectors. The rubber sector is discriminated by tariff protection for manufacturing, but the oil palm sector is favored due to strong forward linkages to the protected industries.
... The decision problem confronting each farmer is to choose a particular technology in order to maximise expected profits (Reca, 1980). A theoretical supply curve is based on the assumption that farmers seek to maximise profits. ...
Article
For many years, coffee has been a major source of income to many Ugandans. Traditionally, Uganda coffee farmers have sold their coffee in unhulled form as dried cherries (Kiboko) through governmental parastatals. Structural changes in the agricultural sector arising from policy reforms that Uganda embraced since 1990 (notably liberalisation, privatisation and decentralization) removed the monopoly of governmental parastatals in agricultural marketing and pricing which was a disincentive to improvement of quality and quantity of output. Because of liberalisation, coffee quality and exports declined as the traders were more concerned about quantity rather than quality, which led to low prices and consequently low farm incomes. In response to this, value addition through hulling prior to marketing by farmers was suggested as one of the remedies. However, the rate of adoption of this strategy remains disappointingly low. The purpose of this study is to determine the factors underlying the adoption of coffee hulling by farmers, and to estimate the price elasticities for hulled and unhulled coffee sold. 300 farmers were randomly selected and interviewed using a structured questionnaire. Descriptive statistics were used to characterize and highlight differences between farmers who sell hulled and unhulled coffee. The censored Tobit model was used to analyse the factors that influence the sale of hulled coffee. Two OLS models for the marketed supply of unhulled and hulled coffee were estimated and their corresponding elasticities determined. The results indicate that higher market prices of hulled coffee positively and significantly (p
... The case study on Argentina was written by Reca (1977). He pointed out that the major goals of the agricultu.al ...
Article
Full-text available
This article evaluates the effects of government intervention in agricultural commodity markets for a sample of developing countries. It also presents a review of the methodology for quantifying the effects of the distortions on prices, supply, demand, incomes, and foreign exchange. The empirical results indicate that the agricultural sector in developing countries is often heavily taxed. As a consequence, agricultural production is discouraged, while consumption is subsidized, and the increases in government revenue provided by taxation are counterbalanced by a loss of foreign exchange earnings.
... The numbers in Table 1 are representative of the height of barriers that prevailed between 2007 and 2015 4 Quantitative export restrictions on wheat and bovine meat were instituted in early 2006 as a response to the 2006-2008 food-price inflation that became a major international crisis (FAO 2014). The criticisms to this response come not so much from the policy itself but from the fact that these QRs were maintained well after the crisis had receded 5 Several studies have addressed the long-run consequences of Argentina's price discrimination against agriculture including among others Colome et al. (2011), Diaz Alejandro (1975), Nogués (2011, 2016, Reca (1980), and Sturzenegger and Salazni (2007) 6 Wherever export QRs were applied, easy rents were created, and over these years, their dollar value reached a minimum of USD 9 billion (Nogues 2016). How these rents were distributed is anyone's guess domestic industries that their governments were ready to protect from "unfair competition." ...
Book
For developing countries, the Uruguay Round had mixed results: some positive, some negative, and some negotiating areas only made marginal progress. In our view, adoption of the WTO rules for administering import barriers on contingent protection (mainly antidumping and countervailing measures) entailed a major positive institutional shift away from the high degree of trade policy arbitrariness that prevailed before. In contrast, strong pressures against liberalization of agricultural trade resulted in the failure of this Round to establish rules on primary agricultural export barriers. Included among these are escalated export taxes that entail input subsidies. This chapter reviews the experience of importing countries' contingent protection measures that sought to compensate the input subsidies from escalated export taxes in biodiesel imports from Argentina. The end result of a WTO that is empty of rules on primary agricultural export barriers has been the implementation of arbitrary policies taken by both the exporting and some importing countries. We conclude that in much the same way that WTO rules on import barriers reduced the high degree of arbitrariness that used to characterize developing countries' import-substitution policies, and multilateral rules on agricultural export barriers would imply a further positive institutional change for the benefit of both exporting and importing countries.
Article
Full-text available
This paper outlines the role of improved soil fertility in the process of structural transformation, and examines specific financial, economic, social, and political arguments in favor of promoting increased fertilizer use, particularly in smallholder farming systems. The paper draws experiences and insights from the literature on which policies and programs appear to work best and which least well in stimulating a sustainable increase in fertilizer use by small farmers. Special attention is given to addressing the question of fertilizer subsidies: Under what circumstances are they warranted and what form should they take, if and when they are implemented?
Article
When proposals for reform of tariff or subsidy policies are made, attempts to predict the effect on incentives are frequently hampered by the need for input-output technical data. This article develops and illustrates the use of a methodology for approximating effective protection coefficients (EPCs) when such data are unavailable or outdated. It derives the equations which approximate the EPC from statistical analysis of a cross section of existing EPC studies for four agricultural commodities: corn, cotton, rice, and wheat. Informational requirements for computing approximations include the nominal protection coefficients on output and tradable inputs and readily available macroeconomic data. These approximation equations perform well in an out-of-sample test.
Article
Full-text available
This paper outlines the role of improved soil fertility in the process of structural transformation, and examines specific financial, economic, social, and political arguments in favor of promoting increased fertilizer use, particularly in smallholder farming systems. This paper draws experiences and insights from the literature on which policies and programs appear to work best and which least well in providing a consistent and growing supply of fertilizer to smallholders. Particular attention is given to addressing the question of fertilizer subsidies: Under what circumstances are they warranted and what form should they take, if and when they are implemented?
Article
Tanzania is among the many African countries that have engaged in agricultural liberalization since the mid-1980s. in the hope that reforms that introduce price incentives and efficient marketing will encourage producers to respond. This paper assesses that claim by examining the supply response of agricultural output in Tanzania. Our estimates suggest that aggregate agricultural supply response is quite high so that the potential for agricultural sector response to liberalization of agricultural prices and marketing may be quite significant. The long-run elasticity of aggregate food crop output to relative prices was almost unity. Short-run supply responses were estimated at about 0.35 for aggregate food crops and for all (food and export) crops. Liberalization of agricultural markets, where it increases the effective prices paid to farmers, can be effective in promoting production, although complementary interventions, to improve infrastructure, marketing, access to inputs and credit, improved production technology etc, are probably necessary.
Article
The low agricultural output of many developing countries is often blamed on discrimination against the farm sector, especially as a result of low state-regulated prices. Accordingly, it is argued that agricultural prices should be raised to offer producers incentives to expand production. However, the connection between farm prices and aggregate agricultural output has not yet been adequately clarified by empirical evidence. The following article tackles this problem.
Chapter
The objective of this paper is to analyze agricultural policies of selected countries: A high subsidizing group (EU), a moderate subsidizing country (Mexico), one with almost no agricultural support (Brazil), and one with high negative support (Argentina). Nevertheless, the way support is implemented is very important as well. Support in Brazil is very low, though distortive. Support in the EU and Mexico is not only distortive, but spread among different commodities. This fact has negative policy implications: further decreases in absolute and distortive support requires reforms in policy measures affecting several products, having to deal with resistance from different interest groups.
Article
The paper investigates the relative importance of trade policy and 'natural' sources of export taxation in Malawi, a landlocked African economy. These sources of export taxation are in turn used to explore how export supply would respond to trade liberalisation as opposed to measures which lower other international trade costs. The findings indicate that trade policy barriers are now only a limited source of 'true' export taxation and that trade policy reform needs to be complemented with reforms to reduce international trade, including transport, costs.
Article
Full-text available
In assessing the response of agricultural production to government policies, it is necessary to look not just at output prices but at all the factors that affect real farm profits; to disentangle the effects on individual (or export) crops from the effects on aggregate output; and to distinguish the short-run aggregate response from the long-run. Individual crops respond strongly to price factors, but growth in one crop usually takes resources away from others. The price elasticity of agriculture overall is very low in the short run because the main factors of production —land, capital, and labor —are fixed. Aggregate output can grow only if more resources are devoted to agriculture or if technology changes. Output is also affected by investments in roads, markets, irrigation, infrastructure, education, and health. Research and extension increase the demand for fertilizer. As for adjustment policy: domestic food supply may not increase rapidly in response to adjustment programs, so structural adjustment programs should do more than ease the balance of payments; analysis should focus on how to make all of agriculture grow.
Article
This paper analyzes the response of the soybean sown area of Argentina to changes in price incentives and other variables which are relevant for agricultural production. To this effect, VEC models are estimated for some of the main producing provinces and for the country’s total in the period 1974-2006. The estimated models allow analyzing the long-term relationship among the share of soybean sown area, relative prices, the use of certain inputs, and the risks involved. For models where cointegration relations are observed, positive and significative responses are found in the soybean sown area to changes in relative prices.
Article
This work investigates the sources of agricultural product fluctuations for the Argentina's economy using a Structural Vector Error Correction model (SVEC) approach and quarterly data covering the period 1993:1–2010:1. To this effect, the paper imposes short and long run restrictions to the SVEC model and identifies four structural shocks: terms of trade, supply, demand, (real exchange rate) and monetary shocks. The results show that the main source of output fluctuations in the long run are supply shocks (productivity) and in a lesser extent to the terms of trade.
Research
Full-text available
Modeling aggregate supply response of agriculture in developing economies may be effectively pursued both at micro and meso-levels in a profit maximizing framework, choice of technique and household decision theoretical system of neo-classical tradition. The system of equations consisting of aggregate output supply, input demand, and private investment functions can be estimated taking into account of imperfections in land, labor, capital and public infrastructure and market access across ago-ecosystems and production systems.
Chapter
The budgetary constraint is fundamental to the basic dilemma. If it did not exist the solution would be easy. The government would simultaneously keep producer prices high and consumer prices low by a general system of deficiency payments to farmers or general food subsidies to consumers. Such a system is possible only if the food is consumed in processed form (e.g. bread). Otherwise, food will be bought at the low, subsidized prices and resold at the higher producer prices. Even advanced countries have found it difficult to sustain such a system, and no developing country has the capacity for such a large subsidy programme, without sacrificing other important objectives such as new productive investment or operating existing investments. Either the country keeps prices paid to farmers low, with the negative effect on agricultural production (though, as we have seen, much less for total output than for one specific crop), or parastatal organizations buy at higher prices and sell at lower ones. The budgetary burden of such a subsidy programme means that other types of development expenditure are sacrificed. Subsidies to food absorb up to 20 per cent of budgetary expenditure in some developing countries. The solution to the dilemma has therefore to be found against severe budgetary constraints. The dilemma has three, not two, horns. Keep producer prices up, consumer prices down, and minimize government costs.
Article
Jamaica experienced one of the longest uninterrupted periods of negative growth among LDCs in the 1970s. Agricultural exports led this decline with an unusually poor growth performance, exacerbating foreign exchange shortages. Commodity board pricing policies played a strong role in penalizing these exports. Further, board policies appear to be inefficient in either maximizing profits or foreign exchange. Implicit and unstated objectives of board policies are discussed. Supply functions show that farmers do react positively to price changes, contrary to board assumptions. Beneficiaries of this penalizing price policy are identified and an important implication for foreign aid policy is underscored.
ResearchGate has not been able to resolve any references for this publication.