Domestic policy responses to the food price crisis: The case of Bolivia

In face of the global food crisis of 2007-2008, severe concerns arose about how developing countries would be affected by the extreme short-term fluctuations in international commodity prices. We examine the effects of the crisis on Bolivia, one of the poorest countries of the Americas. We focus on the effectiveness of the domestic policy interventions in preventing spillovers of the development of international food prices to domestic markets. Using a cointegration model, we study price interdependencies of wheat flour, sunflower oil and poultry. The analysis suggests that the policy measures taken had little effect on food security during the food crisis. Throughout the entire period, perfect price transmission between the Bolivian poultry and sunflower oil markets and the respective international reference markets existed. Bolivian prices were determined by international prices and the policy interventions in the markets of these two commodities were not found to have had an effect. The government's large-scale wheat flour imports did not shield Bolivian consumers from the shocks of international prices.

Agricultural Production and Yield Estimation: Two distinctive aspects of Brazilian Agriculture and a perspective on world food problems

Brazil has been increasing its importance in agricultural markets. The reasons are well known to be the relative abundance of land, the increasing technology used in crops, and the development of the agribusiness sector which allow for a fast response to price stimuli. The elasticity of acreage response to increases in expected return is estimated for Soybeans in a dynamic (long term) error correction model. Regarding yield patterns, a large variation in the yearly rates of growth in yield is observed, climate being probably the main source of this variation which result in ‘good’ and ‘bad’ years. In South America, special attention should be given to the El Niño and La Niña phenomena, both said to have important effects on rainfalls patterns and consequently in yield. The influence on El Niño and La Niña in historical data is examined and some ways of estimating the impact of climate on yield of Soybean and Corn markets are proposed. Possible implications of climate change may apply.

How do domestic policies affect the integration of Ethiopian fertiliser markets with world markets?

Frequent shifts in policy on fertiliser markets have occurred in Ethiopia with the aim of facilitating both physical and economic access of farmers to fertiliser. The last shift was the introduction of a monopoly on each stage of the supply chain in 2008. Furthermore, government control of prices and margins as well as stockholding programmes are also present on the markets. This paper evaluates the effect of these policies on the integration of domestic with world markets of fertiliser, using cointegration methods. Time series data of diammonium phosphate (DAP) and urea prices on world, import and retail markets between 1971 and 2012 are used. The findings show high transmission of price signals from world markets to import prices for both DAP and urea. However, between import and retail prices there is no evidence of cointegration for urea, while for DAP full price transmission is concluded. In the retail market, domestic transaction costs associated with storing large volumes of fertiliser act as a buffer between import and retail prices, especially for urea. Therefore, economic benefits could be achieved by reducing the size of stocks and revising the demand estimation process.