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GTAP Resource #5103

"Impact of Increasing Agricultural Domestic Support on Food Price Transmission"
by Yang, Fan, Kirsten Boysen-Urban, Martina Brockmeier, Eddy Bekkers and Joseph Francois

Purpose – The paper aims to explore how increased agricultural domestic support might affect China’s domestic market under the assumption of incomplete price transmission caused by border measure adjustments.

Design/Methodology/approach - We extend the standard Global Trade Analysis Project (GTAP) framework in two respects. First, we incorporate price transmission elasticities so that the extended model accounts for border measures to stabilise domestic prices. Second, we update the current representation of agricultural domestic support in China to analyse the impact of long-term food security policies. Running a set of simulations, we examine how different policy assumptions affect the agricultural market.

Findings – Adjustments of border measures as responses to high international agricultural prices mitigate the domestic prices increase, which also lead to an increase in China’s trade deficit and prohibits net food sellers from receiving high prices. In the long term, an increase in China’s agricultural domestic support to its WTO de minimis commitment level would increase domestic agricultural production and reduce its demand pressure on the international market.

Resource Details (Export Citation) GTAP Keywords
Category: 2016 Conference Paper
Status: Published
By/In: Presented at the 19th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2016
Created: Brockmeier, M. (4/18/2016)
Updated: Brockmeier, M. (4/18/2016)
Visits: 1,399
- Model validation and sensitivity analysis
- Agricultural policies
- Domestic policy analysis
- Food prices and food security

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