Yield Variability and Agricultural Trade

We examine how changes in yield variability affect the welfare of cereal grain and oilseed buyers and producers around the world. We simulate trade patterns and welfare for 21 countries with a Ricardian trade model that incorporates bilateral trade costs and crop yield distributions. The model shows that world trade volumes would need to increase substantially if crop yield variability were to rise. Net welfare effects, however, are moderate so long as countries do not resort to policies that inhibit trade, such as export restrictions or measures to promote self-sufficiency in crops. Low-income countries suffer the most from increases in yield variability, due to higher bilateral trade costs and lower-than-average productivity.


Issue Date:
2009-10
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/55543
Published in:
Agricultural and Resource Economics Review, Volume 38, Number 2
Page range:
258-270
Total Pages:
13




 Record created 2017-04-01, last modified 2017-08-25

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