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The macroeconomic and food security implications of price interventions in the Philippine rice market

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  • Mariano, Marc Jim M.
  • Giesecke, James A.

Abstract

The Philippine government has a number of policy interventions in the domestic rice market aimed at promoting national food security. This paper examines the economy-wide and food security implications of three of the main policies: a ceiling on prices paid by rice consumers; a floor on prices received by paddy producers; and a subsidy on prices paid for seeds by paddy farmers. These programmes have been subject to domestic criticism on allocative efficiency and distributional grounds. We examine the effects of removing the programmes using an economy-wide model with detailed treatment of agricultural activity, land use, and food security measures. We find that the programmes make a small contribution to food security, for a modest budgetary outlay. The allocative efficiency gains available from ending the programmes are small, and may be outweighed by the potential for adverse short-run macroeconomic consequences.

Suggested Citation

  • Mariano, Marc Jim M. & Giesecke, James A., 2014. "The macroeconomic and food security implications of price interventions in the Philippine rice market," Economic Modelling, Elsevier, vol. 37(C), pages 350-361.
    • Handle: RePEc:eee:ecmode:v:37:y:2014:i:c:p:350-361
    DOI: 10.1016/j.econmod.2013.11.025
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    2. Briones, Roehlano M., 2016. "Embedding the AMPLE in a CGE Model to Analyze Intersectoral and Economy-Wide Policy Issues," Discussion Papers DP 2016-38, Philippine Institute for Development Studies.
    3. Zhao, Xin & Van Der Mensbrugghe, Dominique & Tyner, Wallace E., 2017. "Modeling land physically in CGE models: new insights on intensive and extensive margins," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258363, Agricultural and Applied Economics Association.
    4. Kun Cheng & Qiang Fu & Tianxiao Li & Qiuxiang Jiang & Wei Liu, 2015. "Regional food security risk assessment under the coordinated development of water resources," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 78(1), pages 603-619, August.
    5. Mamoon, Dawood & Ijaz, Kinza, 2017. "How Climate Change and Agriculture Fares with Food Security in Pakistan?," MPRA Paper 81346, University Library of Munich, Germany.
    6. Harold Glenn A. Valera & Jim Lee, 2016. "Do rice prices follow a random walk? Evidence from Markov switching unit root tests for Asian markets," Agricultural Economics, International Association of Agricultural Economists, vol. 47(6), pages 683-695, November.
    7. Marc Jim M. Mariano & James A. Giesecke & Nhi H. Tran, 2015. "The effects of domestic rice market interventions outside business-as-usual conditions for imported rice prices," Applied Economics, Taylor & Francis Journals, vol. 47(8), pages 809-832, February.
    8. Vicente E. Montano, 2024. "Is there Price Distortion in the Philippine Rice Market: A Bayesian Discrete Wavelet Transform Analysis," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(15), pages 275-287, December.
    9. Marc Jim M. Mariano & James A. Giesecke, 2016. "Forecasting development outcomes under alternative surplus labour assumptions," Applied Economics, Taylor & Francis Journals, vol. 48(42), pages 4019-4032, September.
    10. Peter B. Dixon & Maureen T. Rimmer & Rajesh Chadha & Devender Pratap & Anjali Tandon, 2016. "A CGE model for India with an application on the effects of eliminating agricultural subsidies," Centre of Policy Studies/IMPACT Centre Working Papers g-265, Victoria University, Centre of Policy Studies/IMPACT Centre.
    11. Zhao, Xin & Calvin, Katherine & Wise, Marshall, 2020. "The critical role of conversion cost and comparative advantage in modeling agricultural land use change," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304204, Agricultural and Applied Economics Association.
    12. Okimoto, Madoka, 2015. "International price competition among food industries: The role of income, population and biased consumer preference," Economic Modelling, Elsevier, vol. 47(C), pages 327-339.
    13. James A. Giesecke & Nhi H. Tran, 2018. "The National and Regional Consequences of Australia's Goods and Services Tax," The Economic Record, The Economic Society of Australia, vol. 94(306), pages 255-275, September.
    14. Lee, Jim & Valera, Harold Glenn, 2015. "Do Rice Prices Follow a Random Walk? Evidence from Markov Switching Unit Root Tests for Asian Markets," MPRA Paper 123469, University Library of Munich, Germany.
    15. Emerta A. Aragie & Jean Balié, 2024. "The effect of price support policies under productivity shocks: evidence from an economywide model," International Economics and Economic Policy, Springer, vol. 21(1), pages 1-26, February.
    16. J.A. Giesecke & R. Waschik & N.H. Tran, 2019. "Modelling the Consequences of the U.S.-China Trade War and Related Trade Frictions for the U.S., Chinese, Australian and Global Economies," Centre of Policy Studies/IMPACT Centre Working Papers g-294, Victoria University, Centre of Policy Studies/IMPACT Centre.
    17. Zhao, Xin & van der Mensbrugghe, Dominique & Tyner, Wally, 2017. "Modeling land physically in CGE models: new insights on intensive and extensive margins," Conference papers 332816, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Xin Zhao & Katherine V. Calvin & Marshall A. Wise, 2020. "The Critical Role Of Conversion Cost And Comparative Advantage In Modeling Agricultural Land Use Change," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 11(01), pages 1-44, February.

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    More about this item

    Keywords

    Food security; Food subsidies; General equilibrium; Land use; Rice market; Philippines;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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