Rice Reforms and Poverty in the Philippines: A CGE Analysis
Cororaton, Caesar B. | July 2004
Abstract
The quantitative restriction (QR) on rice will last until the end of 2004. The paper employs a computable general equilibrium (CGE) model to analyze the possible poverty and distributional effects of the removal of QR and the reduction in tariff on rice imports. Policy experiments indicate that while market reforms in rice lead to a reduction in the overall headcount poverty index, both the poverty gap and the squared poverty gap indices increase. The Gini coefficient increases as well. In general, these results imply that the poorest of the poor are adversely affected. In particular, while market reforms in rice bring about a reduction in consumer prices that is favorable to all, imports of rice surge and generate displacement effects on poor households that rely heavily on agriculture for factor incomes, particularly on palay rice production and other related activities. Palay production and its output price decline. This translates to lower demand for factor inputs in the sector, lower factor prices in agriculture, and lower factor incomes for these households. Thus, poverty in these groups, as well as the general income inequality, deteriorates. However, the results of the experiments involving various poverty-offsetting measures indicate that an increase in direct government transfers to these household groups can provide a better safety net.
Citation
Cororaton, Caesar B.. 2004. Rice Reforms and Poverty in the Philippines: A CGE Analysis. © Asian Development Bank. http://hdl.handle.net/11540/3596. License: CC BY 3.0 IGO.Keywords
Commercial agriculture
Agriculture
Sustainable agriculture
Trade Volume
Agricultural Trade
Food Security And Trade
Regional Trade Agreements
Agroindustry
Agricultural trade
Commercial farming
Agroindustry
Sustainable development
Export volume
Export Development
Access to markets
Agricultural market
Agricultural economy
Distribution
Agricultural diversification
Agricultural resource
Farm produce
Land capability for agriculture
Food Supply
Rural land use
Technological innovations
Agricultural innovations
Farm supply industry
Natural resource
Adaptive natural resource management
Produce trade
Poor
Price Indexes
Intergrated rural development
Cost and standard of living
Population
Crop improvement
Rice farming
Crop
Food industry
Perishable goods
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