Implications of food trade policy for domestic and international food price volatility
This paper investigates the impact of food trade policies on domestic and international price volatility, focusing on rice and wheat markets. It posits that policymakers aim to minimize the political costs associated with changing domestic prices and those associated with deviating from political-ec...
| Autores principales: | , , |
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
| Publicado: |
CGIAR System Organization
2025
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/179431 |
| _version_ | 1855524355264479232 |
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| author | Martin, Will Mamun, Abdullah Minot, Nicholas |
| author_browse | Mamun, Abdullah Martin, Will Minot, Nicholas |
| author_facet | Martin, Will Mamun, Abdullah Minot, Nicholas |
| author_sort | Martin, Will |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | This paper investigates the impact of food trade policies on domestic and international price volatility, focusing on rice and wheat markets. It posits that policymakers aim to minimize the political costs associated with changing domestic prices and those associated with deviating from political-economy equilibria. The study uses price data, adjusted to reflect trade costs, to estimate an Error Correction Model that identifies key policy response parameters. The findings suggest that systematic, short-run protection changes designed to insulate against changes in world prices reduce shocks to domestic prices but exacerbate world price volatility. However, idiosyncratic, national shocks to protection rates—such as those due to national weather shocks—increase domestic price volatility relative to the amplified volatility of world prices. Our findings challenge the conventional view of price insulation as a zero-sum game, suggesting it is a negative-sum game that increases domestic price volatility for almost all countries, creating opportunities for policy reforms to lower costs and reduce price volatility. |
| format | Artículo preliminar |
| id | CGSpace179431 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2025 |
| publishDateRange | 2025 |
| publishDateSort | 2025 |
| publisher | CGIAR System Organization |
| publisherStr | CGIAR System Organization |
| record_format | dspace |
| spelling | CGSpace1794312026-01-07T02:07:18Z Implications of food trade policy for domestic and international food price volatility Martin, Will Mamun, Abdullah Minot, Nicholas agricultural trade international trade trade food prices price volatility trade policies behavioural sciences econometric models modelling This paper investigates the impact of food trade policies on domestic and international price volatility, focusing on rice and wheat markets. It posits that policymakers aim to minimize the political costs associated with changing domestic prices and those associated with deviating from political-economy equilibria. The study uses price data, adjusted to reflect trade costs, to estimate an Error Correction Model that identifies key policy response parameters. The findings suggest that systematic, short-run protection changes designed to insulate against changes in world prices reduce shocks to domestic prices but exacerbate world price volatility. However, idiosyncratic, national shocks to protection rates—such as those due to national weather shocks—increase domestic price volatility relative to the amplified volatility of world prices. Our findings challenge the conventional view of price insulation as a zero-sum game, suggesting it is a negative-sum game that increases domestic price volatility for almost all countries, creating opportunities for policy reforms to lower costs and reduce price volatility. 2025-12-14 2026-01-06T21:44:04Z 2026-01-06T21:44:04Z Working Paper https://hdl.handle.net/10568/179431 en Open Access application/pdf CGIAR System Organization Martin, Will; Mamun, Abdullah; and Minot, Nicholas. 2025. Implications of food trade policy for domestic and international food price volatility. CGIAR System Organization. https://hdl.handle.net/10568/179431 |
| spellingShingle | agricultural trade international trade trade food prices price volatility trade policies behavioural sciences econometric models modelling Martin, Will Mamun, Abdullah Minot, Nicholas Implications of food trade policy for domestic and international food price volatility |
| title | Implications of food trade policy for domestic and international food price volatility |
| title_full | Implications of food trade policy for domestic and international food price volatility |
| title_fullStr | Implications of food trade policy for domestic and international food price volatility |
| title_full_unstemmed | Implications of food trade policy for domestic and international food price volatility |
| title_short | Implications of food trade policy for domestic and international food price volatility |
| title_sort | implications of food trade policy for domestic and international food price volatility |
| topic | agricultural trade international trade trade food prices price volatility trade policies behavioural sciences econometric models modelling |
| url | https://hdl.handle.net/10568/179431 |
| work_keys_str_mv | AT martinwill implicationsoffoodtradepolicyfordomesticandinternationalfoodpricevolatility AT mamunabdullah implicationsoffoodtradepolicyfordomesticandinternationalfoodpricevolatility AT minotnicholas implicationsoffoodtradepolicyfordomesticandinternationalfoodpricevolatility |