Producer Support Estimates (PSEs) for agriculture in developing countries: measurement issues and illustrations from India and China
In many developing countries, governments rely on price-based measures (including border protection and subsidies on inputs and outputs) more than on budgetary payments to achieve agricultural policy objectives defined to include price stabilization or food self-sufficiency. Assessing the effects of...
| Autores principales: | , , , |
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2004
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/157242 |
| _version_ | 1855527023052587008 |
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| author | Mullen, Kathleen Sun, Dongsheng Orden, David Gulati, Ashok |
| author_browse | Gulati, Ashok Mullen, Kathleen Orden, David Sun, Dongsheng |
| author_facet | Mullen, Kathleen Sun, Dongsheng Orden, David Gulati, Ashok |
| author_sort | Mullen, Kathleen |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | In many developing countries, governments rely on price-based measures (including border protection and subsidies on inputs and outputs) more than on budgetary payments to achieve agricultural policy objectives defined to include price stabilization or food self-sufficiency. Assessing the effects of these price-based measures is thus important to evaluating whether agriculture is being protected or disprotected by commodity or in the aggregate. This aspect of producer support estimates (PSEs) is simple to describe conceptually but difficult to evaluate well empirically. Developing countries may face higher international transport and port costs for imports and exports than developed countries or may have substantial internal handling, transportation and processing costs. Separating these structural effects on farmers from agricultural policy effects that drive a wedge between the domestic farmgate price and an adjusted international reference price requires extensive data and judgments. In this paper, we describe the PSE measurement issues and illustrate their importance. We estimate product-specific market price support, budget expenditures and PSEs for three important agricultural commodities (wheat, rice and corn) in India (1985-2002), using representative disaggregated state-level results, and for five commodities (wheat, rice, corn, soybeans and sugar) in China (1995-2001). The results for India suggest that ignoring factors such as internal transport costs, marketing margins and quality differences can result in inaccurate price support estimates and PSEs that may be of the wrong sign. We also explore how relaxing or changing certain standard PSE assumptions (such as altering the “scaling up” procedure or computing the PSE as a percentage of value of production at world reference prices) can have large impacts on the results. Finally, for commodities that are near self-sufficiency, we follow Byerlee and Morris (1993) and define a relevant adjusted reference price based on the relationship between an estimated autarky price and the import and export prices. We discuss this procedure and use the resulting reference prices to compute the market price support component of the PSE for India. Based on our three-commodity PSEs for India, support is largely counter-cyclical, rising when world prices are low (as in the late 1980s and 1990s) and falling when world prices strengthen (as in the mid 1990s). From our more preliminary five-commodity PSE estimates for China, a trend decline in disprotection is more evident. Further research is needed to confirm and elaborate on these results. |
| format | Artículo preliminar |
| id | CGSpace157242 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2004 |
| publishDateRange | 2004 |
| publishDateSort | 2004 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1572422025-11-06T06:23:41Z Producer Support Estimates (PSEs) for agriculture in developing countries: measurement issues and illustrations from India and China Mullen, Kathleen Sun, Dongsheng Orden, David Gulati, Ashok prices policies producer prices self-sufficiency price stabilization analysis costs trade In many developing countries, governments rely on price-based measures (including border protection and subsidies on inputs and outputs) more than on budgetary payments to achieve agricultural policy objectives defined to include price stabilization or food self-sufficiency. Assessing the effects of these price-based measures is thus important to evaluating whether agriculture is being protected or disprotected by commodity or in the aggregate. This aspect of producer support estimates (PSEs) is simple to describe conceptually but difficult to evaluate well empirically. Developing countries may face higher international transport and port costs for imports and exports than developed countries or may have substantial internal handling, transportation and processing costs. Separating these structural effects on farmers from agricultural policy effects that drive a wedge between the domestic farmgate price and an adjusted international reference price requires extensive data and judgments. In this paper, we describe the PSE measurement issues and illustrate their importance. We estimate product-specific market price support, budget expenditures and PSEs for three important agricultural commodities (wheat, rice and corn) in India (1985-2002), using representative disaggregated state-level results, and for five commodities (wheat, rice, corn, soybeans and sugar) in China (1995-2001). The results for India suggest that ignoring factors such as internal transport costs, marketing margins and quality differences can result in inaccurate price support estimates and PSEs that may be of the wrong sign. We also explore how relaxing or changing certain standard PSE assumptions (such as altering the “scaling up” procedure or computing the PSE as a percentage of value of production at world reference prices) can have large impacts on the results. Finally, for commodities that are near self-sufficiency, we follow Byerlee and Morris (1993) and define a relevant adjusted reference price based on the relationship between an estimated autarky price and the import and export prices. We discuss this procedure and use the resulting reference prices to compute the market price support component of the PSE for India. Based on our three-commodity PSEs for India, support is largely counter-cyclical, rising when world prices are low (as in the late 1980s and 1990s) and falling when world prices strengthen (as in the mid 1990s). From our more preliminary five-commodity PSE estimates for China, a trend decline in disprotection is more evident. Further research is needed to confirm and elaborate on these results. 2004 2024-10-24T12:48:19Z 2024-10-24T12:48:19Z Working Paper https://hdl.handle.net/10568/157242 en Open Access application/pdf International Food Policy Research Institute Mullen, Kathleen; Sun, Dongsheng; Orden, David; Gulati, Ashok. 2004. Producer Support Estimates (PSEs) for agriculture in developing countries: measurement issues and illustrations from India and China. MTID Discussion Paper 74. https://hdl.handle.net/10568/157242 |
| spellingShingle | prices policies producer prices self-sufficiency price stabilization analysis costs trade Mullen, Kathleen Sun, Dongsheng Orden, David Gulati, Ashok Producer Support Estimates (PSEs) for agriculture in developing countries: measurement issues and illustrations from India and China |
| title | Producer Support Estimates (PSEs) for agriculture in developing countries: measurement issues and illustrations from India and China |
| title_full | Producer Support Estimates (PSEs) for agriculture in developing countries: measurement issues and illustrations from India and China |
| title_fullStr | Producer Support Estimates (PSEs) for agriculture in developing countries: measurement issues and illustrations from India and China |
| title_full_unstemmed | Producer Support Estimates (PSEs) for agriculture in developing countries: measurement issues and illustrations from India and China |
| title_short | Producer Support Estimates (PSEs) for agriculture in developing countries: measurement issues and illustrations from India and China |
| title_sort | producer support estimates pses for agriculture in developing countries measurement issues and illustrations from india and china |
| topic | prices policies producer prices self-sufficiency price stabilization analysis costs trade |
| url | https://hdl.handle.net/10568/157242 |
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