WTO Subsidy Disciplines

Gulotty, Robert

doi:10.1017/s1474745622000118

Cited by 4 publications

(1 citation statement)

References 52 publications

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“…Our model does not consider a reversal of trade with Rich becoming an exporter of organic crops to Poor. Such trade reversal is unlikely due to discontinuous costs associated with reversing importer-exporter roles and the fact that such trades of a subsidized commodity would likely be challenged under WTO rules (Gulotty, 2022).…”

Section: Resultsmentioning

confidence: 99%

Policy-induced expansion of organic farmland: implications for food prices and welfare

Mérel

Qin

Sexton

2023

European Review of Agricultural Economics

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Public policies increasingly support the expansion of organic agriculture as part of a menu of food and environmental initiatives. A little-studied yet crucial element of such expansion, especially in light of scientific evidence on lower yields of organic crops, is its impact on overall food production and food prices, especially for poorer households. In this paper, we first establish a positive empirical relationship between countries’ propensity to produce and consume organic foods and their per-capita income. Such correlation suggests that, even if rich countries’ consumers can benefit from an increase in the organic farmland share, poor countries’ consumers would likely face higher conventional food prices. We then develop and calibrate a model of world food demand and supply to assess the implications of a policy-driven expansion in organic farmland. Our results for four major grains and oilseeds show that raising the organic cropland share in rich countries from 3 to 15 per cent increases food prices in poor countries by up to 6.3 per cent, with central values of 1.2–2.5 per cent, and a commensurate reduction in consumer welfare. Model parameterisations indicate that farmers in poor countries benefit from higher crop prices, while consumers in rich countries are largely unaffected and sometimes benefit. In all cases, poor countries’ consumers bear most of the distortion burden. In our preferred parameterisation, a 3 per cent increase in cropland in rich countries is needed to offset the food price increase in poor countries.

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Section: Resultsmentioning

confidence: 99%