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Yield Variability and Agricultural Trade

Published online by Cambridge University Press:  15 September 2016

Jeffrey J. Reimer  and
Man Li
Jeffrey J. Reimer
Affiliation:
Department of Agricultural and Resource Economics at Oregon State University in Corvallis, Oregon
Man Li
Affiliation:
Department of Agricultural and Resource Economics at Oregon State University in Corvallis, Oregon
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Abstract

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.

Keywords

cropsgeographygrainstrade liberalizationyield variability
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 38 , Issue 2 , October 2009 , pp. 258 - 270
Copyright
Copyright © 2009 Northeastern Agricultural and Resource Economics Association 

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