Sit Down at the Ballgame: How Trade Barriers Make the World Less Food Secure

20 Pages Posted: 28 Feb 2011 Last revised: 13 May 2016

See all articles by Martine M. Rutten

Martine M. Rutten

LEI Wageningen UR

Lindsay J. Shutes

LEI Wageningen UR; University of Sheffield - Department of Economics

Gerdien W. Meijerink

Netherlands Bureau for Economic Policy Analysis (CPB)

Date Written: February 25, 2011

Abstract

This paper analyses the impacts of trade policy responses to rising world food prices by carrying out a series of stylised experiments in the wheat market using a world trade model, GTAP. The sequence of events that is modelled comprises a negative wheat supply shock and subsequent implementation of an export tax by a major net exporter and a reduction in import tariffs by a small importer. The effects of trade policy responses are contrasted with those of full liberalisation of the wheat market. At the core are the (opposite) effects on producers and consumers, as well as the terms-of-trade and trade tax revenue effects. Food security is shown to depend crucially on changes in prices but also in incomes that are associated with changes in factor returns. The results reveal that major net exporters are generally better off when implementing export taxes for food security purposes. Large exporting countries export price instability causing world food prices to rise further. Net importing countries lose out and have limited leeway to reduce tariffs or subsidise imports. Liberalising wheat trade mitigates rising prices and contributes to food security, but to the detriment of production in Africa and Asia, making them more dependent on and vulnerable to changes in the world market. Concerted action at the WTO forum is required, notably clarifying and sharpening the rules regarding export measures.

Keywords: food security, world food crisis, international grain trade, trade measures, trade liberalisation, CGE modelling

JEL Classification: C68, F10, Q18

Suggested Citation

Rutten, Martine M. and Shutes, Lindsay J. and Shutes, Lindsay J. and Meijerink, Gerdien W., Sit Down at the Ballgame: How Trade Barriers Make the World Less Food Secure (February 25, 2011). Available at SSRN: https://ssrn.com/abstract=1769745 or http://dx.doi.org/10.2139/ssrn.1769745

Martine M. Rutten (Contact Author)

LEI Wageningen UR ( email )

Alexanderveld 5
The Hague, 2502 LS
Netherlands

Lindsay J. Shutes

University of Sheffield - Department of Economics

9 Mappin Street
Sheffield, S1 4DT
UNITED KINGDOM

LEI Wageningen UR ( email )

Burgemeester Patijnlaan 19
The Hague, 2502 LS
Netherlands
0703358281 (Phone)

Gerdien W. Meijerink

Netherlands Bureau for Economic Policy Analysis (CPB) ( email )

The Hague
Netherlands

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