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GTAP Resource #4407

"The Economic Impact of Global Food Price Increase on Africa Least Developed Countries: An Application of the Common Agricultural Policy Regionalized Impact (CAPRI) Model"
by Zongo, Jean-baptiste, Huey-Lin Lee, Shih-Hsun Hsu and Ching-Cheng Chang


Abstract
International prices of most staple food commodities in 2008 reached a remarkable level that had not been seen since late 1970’s. Food commodity prices are projected to remain on higher levels over the next decade, supported by firm demand, unfavorable weather conditions, slowing growth in global production, expected high price of crude oil. This perspective poses not only challenges to global food insecurity but also offers opportunities for food and agricultural producers arising from the higher average prices projected for the coming decade.

This paper attempted to investigate the impact of future global food price increase on 28 Africa least developed countries (LDCs) and to propose some policy instruments for tackling the impact of high food prices. Unlike most conventional studies on agricultural impact of trade, we chose in this study the Common Agricultural Policy Regionalized Impact (CAPRI in abbreviation, see Britz & Witzke, 2012) modeling system as the analytical tool. The market module of CAPRI is a multi-regional partial equilibrium model for agricultural products that covers 47 primary and secondary agricultural products produced in 77 countries of 40 trade blocks in the world, among which 28 individual African countries are accounted for, and the remaining African countries being aggregated into four trade blocks—namely, Africa-Rest, Nigeria, Ethiopia and South Africa. This study is, to our knowledge, thus far the very first application of the CAPRI modeling system to assess price surge and policy impact on African LDCs.

Based on the parameters as estimated by Haniotis and Baffes (2010), we translated the projected oil price increase in the medium run (5 to 10 years) into agricultural commodity price changes in the global market. Oil price rise affects agricultural product prices in both production and demand sides. Energy is needed for fertilizer production and thus higher energy prices would push up fertilizer production costs. This wou...


Resource Details (Export Citation) GTAP Keywords
Category: 2014 Conference Paper
Status: Published
By/In: Presented at the 17th Annual Conference on Global Economic Analysis, Dakar, Senegal
Date: 2014
Version:
Created: Hsu, S. (4/12/2014)
Updated: Hsu, S. (4/12/2014)
Visits: 724
- Climate impacts
- Economic development
- Agricultural policies
- Food prices and food security
- Africa (West)


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