Political economy of rice price protection in Asia

Economic Development and Cultural Change

Volumn 44, Issue 3, 1996, Pages 463-483

  David, Cristina C ^a   Huang, Jikun ^b  

^a Philippine Inst for Devmt Studies

^b CHINA NATIONAL RICE RESEARCH INSTITUTE   (China)

Author keywords

[No Author keywords available]

Indexed keywords

AGRICULTURAL TRADE; DEVELOPING REGION; FOOD PRICING POLICY; POLITICAL ECONOMY; PRICE PROTECTION; RICE PRICE; TRADE POLICY;

ASIA;

EID: 0030474538     PISSN: 00130079     EISSN: None     Source Type: Journal    
DOI: 10.1086/452228     Document Type: Article

References (25)

1. Terry Sicular, Food Price Policy in Asia: A Comparative Study (Ithaca, N.Y., and London: Cornell University Press, 1989).
2. The other Asian rice-growing countries were excluded either because of unavailability of data (Burma, Vietnam, Laos, and Cambodia) or because the measurement of price policy impact in terms of nominal protection rates of rice and fertilizer is not straightforward (Sri Lanka and Malaysia).
3. Masao Honma and Yujiro Hayami, "The Determinants of Agricultural Protection Levels: An Econometric Analysis," in The Political Economy of Agricultural Protection: East Asia in International Perspective, ed. Kym Anderson and Yujiro Hayami (Sydney, London, and Boston: Allen & Unwin, 1986); Peter H. Lindert, "Economic Perspectives on the Historical Evolution of Agricultural Policies," in Agriculture and the State: Employment and Poverty in Developing Countries, ed. C. Peter Timmer (Ithaca, N.Y., and London: Cornell University Press, 1991).
4. Masao Honma and Yujiro Hayami, "The Determinants of Agricultural Protection Levels: An Econometric Analysis," in The Political Economy of Agricultural Protection: East Asia in International Perspective, ed. Kym Anderson and Yujiro Hayami (Sydney, London, and Boston: Allen & Unwin, 1986); Peter H. Lindert, "Economic Perspectives on the Historical Evolution of Agricultural Policies," in Agriculture and the State: Employment and Poverty in Developing Countries, ed. C. Peter Timmer (Ithaca, N.Y., and London: Cornell University Press, 1991).
5. C. Peter Timmer, "How Does Indonesia Set Its Rice Price? The Role of Markets and Government Policy" (paper presented at the International Conference on the Economic Policy Making Process, Jakarta, Indonesia, 1990).
6. Except in Thailand and a few other countries, variable export and import duties have not been adopted despite apparent operational ease and lesser opportunities for rent seeking under monopoly control of international trade.
7. Lindert.
8. This may not be true in developed countries, such as in the United States and a number of European countries, where the relative size of major agricultural exports to the whole economy is small and per capita income is high and thus the country can afford to subsidize exports along with efforts to subsidize its agricultural sector.
9. Anderson and Hayami, eds.
10. Randolph Barker and Robert W. Herdt, The Rice Economy of Asia (Washington, D.C.: Resources for the Future, 1985).
11. Cristina C. David and Keijiro Otsuka, ed., Modern Rice Technology and Income Distribution in Asia (Boulder, Colo.: Lynne Rienner, 1993).
12. Yujiro Hayami and Masao Kikuchi, "Investment Inducements to Public Infrastructure: Irrigation in the Philippines," Review of Economics and Statistics 60 (February 1978): 70-77; Cristina C. David, "Fertilizer Demand in the Asian Rice Economy," Food Research Institute Studies 15 (First Quarter 1976): 109-24; and Cristina C. David and Keijiro Otsuka, "The Modern Seed-Fertilizer Technology and Adoption of Labor-Saving Technologies: The Philippine Case," Australian Journal of Agricultural Economics 34 (August 1990): 132-46.
13. Yujiro Hayami and Masao Kikuchi, "Investment Inducements to Public Infrastructure: Irrigation in the Philippines," Review of Economics and Statistics 60 (February 1978): 70-77; Cristina C. David, "Fertilizer Demand in the Asian Rice Economy," Food Research Institute Studies 15 (First Quarter 1976): 109-24; and Cristina C. David and Keijiro Otsuka, "The Modern Seed-Fertilizer Technology and Adoption of Labor-Saving Technologies: The Philippine Case," Australian Journal of Agricultural Economics 34 (August 1990): 132-46.
14. Yujiro Hayami and Masao Kikuchi, "Investment Inducements to Public Infrastructure: Irrigation in the Philippines," Review of Economics and Statistics 60 (February 1978): 70-77; Cristina C. David, "Fertilizer Demand in the Asian Rice Economy," Food Research Institute Studies 15 (First Quarter 1976): 109-24; and Cristina C. David and Keijiro Otsuka, "The Modern Seed-Fertilizer Technology and Adoption of Labor-Saving Technologies: The Philippine Case," Australian Journal of Agricultural Economics 34 (August 1990): 132-46.
15. Ammar Siamwalla and Stephen Haykin, The World Rice Market: Structure, Conduct, and Performance, Research Report no. 39 (Washington, B.C.: International Food Policy Research Institute, 1983).
16. Cristina C. David, "The World Rice Economy: Challenges Ahead," in Rice Biotechnology, ed. G. S. Khush and G. H. Toenniessen (London: CAB International and IRRI, 1991).
17. Rice has the lowest traded ratio among cereal grains, since less than 5% of world rice production is currently traded internationally, in contrast to nearly 30% for wheat and corn.
18. The real exchange rate reflects the relative price of tradable to nontradable goods. Because the price index for nontradable goods is not available for all the countries included in the study, the consumer price index is used as proxy, as commonly done in other studies.
19. D. Gale Johnson, "World Agriculture, Commodity Policy, and Price Variability," American Journal of Agricultural Economics 57 (December 1975): 823-28.
20. Border price is the export unit value in Thailand and Pakistan. For importing countries in South and Southeast Asia, we used the Thai f.o.b. price for 35% broken rice, adjusted by 10% for transport cost. For East Asia, the Thai 5% broken rice is used.
21. Kym Anderson, Yujiro Hayami, and Masayoshi Honma, "The Growth of Agricultural Protection," in Anderson and Hayami, eds.
22. Based on estimates of producer subsidy equivalent (PSE) averaging 48% from Frederick J. Nelson, "United States," in Estimates of Producer and Subsidy Equivalents; Government Intervention in Agriculture, 1982-1987, ed. Alan J. Webb, Michael Lopez, and Renato Penn (Washington, D.C.: U.S. Department of Agriculture, 1990). Nominal protection rate was derived using the formula [(PSE / 1 - PSE) * 100].
23. Although government rice trade policies generally affect world rice prices, world rice price is assumed to be exogenous in the estimating equation because individual "small" countries are used as observations, and the world rice price is affected by many other factors including developments in other grains markets.
24. Ratio of irrigated area was initially included but was dropped due to multicollinearity problems with the adoption rate of modern varieties. The coefficient of modern varieties therefore also includes the effect of irrigation. Often input price subsidy is preferred over raising output prices to cope with the policy dilemma of lowering prices to consumers while maintaining adequate incentives to rice farmers. See Randolph Barker and Yujiro Hayami, "Price Support versus Input Subsidy for Food Self-Sufficiency in Developing Countries," American Journal of Agricultural Economics 58 (December 1976): 617-28.
25. See G. G. Judge, R. Cartel Hill, and William E. Griffiths et al., Introduction to the Theory and Practice of Econometrics (New York: Wiley, 1988).