Trade and price policy and livestock-cereal interactions in domestic markets
Abstract
By 1994 Morocco will move to price and trade liberalization of major agricultural products. This study is an attempt to assess the impacts of different policy alternatives. It used a general equilibrium framework. The model has three major components: domestic supply, demand, and model closure. Domestic supply is handled differently for crops and livestock. Crop supply is determined using a linear programming farm model incorporating vector technologies for crop production. Livestock production and use of cereals as feedstuffs is handled through least cost ration models. Consumer demand is modeled using a nested CES utility function approach. Closure includes trade, price formation, and income relationships. Incomes are divided into four rural households, one urban household, and the government. Trade and exogenous prices were modeled by a penalty function. The sequential joint maximization algorithm developed by Rutherford was used to solve the model. Twelve policy simulations were done in the analysis. Only one of the simulations made all farmer groups better off without hurting urban consumers. All the other policy alternatives made one or more household groups worse off while making some better off. In general, the welfare changes were fairly small. Most of them made urban consumers better off and one or more farm household groups worse off. This result occurred because most of the policy alternatives involved lowering of trade barriers, which led to lower prices for agricultural imports. This research should enable Moroccan policy makers to better understand the impacts of policy alternatives on different segments of society.
Degree
Ph.D.
Advisors
Tyner, Purdue University.
Subject Area
Agricultural economics
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