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Maize Trade Liberalization vs. Fertilizer Subsidies in Tanzania: A CGE Model Analysis with Endogenous Soil Fertility

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This paper presents an analysis on economy-environmental interlinkages for Tanzania by using a computable general equilibrium (CGE) model based on a social accounting matrix. The purpose of the analysis is to include general equilibrium effects when evaluating two suggested policy measures meant to stimulate growth and crop production. The model is multisectoral with a particular focus on crop producing sectors and soil mining processes. Maize trade liberalization and a fertilizer subsidy are considered. The model simulations show that both policy reforms have expansive effects and that there are significant sectoral complementarities between agriculture and non-agriculture in Tanzania. Fertilizer subsidies promotes cash crop production and a more land intensive production pattern in agriculture, while a maize trade liberalization stimulates food crops and a more land extensive agriculture. Fertilizer subsidies are found to imply far more expansive effects than a trade liberalization does. Only minor differences are identified between the two policy reforms as concerning their impact on the balance of trade, distribution and the environment.

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  • Sverre Grepperud & Henrik Wiig & Finn Roar Aune, 1999. "Maize Trade Liberalization vs. Fertilizer Subsidies in Tanzania: A CGE Model Analysis with Endogenous Soil Fertility," Discussion Papers 249, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:249
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    1. Kelly, Valerie & Adesina, Akinwumi A. & Gordon, Ann, 2003. "Expanding access to agricultural inputs in Africa: a review of recent market development experience," Food Policy, Elsevier, vol. 28(4), pages 379-404, August.

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    More about this item

    Keywords

    CGE-model; soil fertility; trade reform; agricultural subsidy.;
    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
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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