Scenarios for the Philippine Agri-Food System with and without Tariffication: Application of a CGE model with Endogenous Area Allocation
Briones, Roehlano M. | December 2018
Abstract
This paper presents an application of a CGE model to analyze scenarios covering the SDG period at the level of the Philippine economy and for its agri-food sectors. Unlike previous CGE models, the analysis incorporates endogenous area allocation under an aggregate land constraint. The area allocation model is based on constant elasticity of transformation of area harvested in an outer nest between perennial and temporary crops, and an inner nest among the types of perennials and among the types of temporary crops.
The baseline scenario finds that growth patterns prevailing since the 2010s can be sustained within the SDG period assuming productivity trends industry and service sectors continue. Unfortunately, the scenario also implies that the mediocre growth performance of agriculture will likewise be sustained into the foreseeable future. Growth proceeds at a moderate pace for most of the agri-food sectors, with the significant exception of banana, which is expected to contract. Similarly, the major crops are all projected to experience a growth in yield and minor change in area harvested, except for banana where deterioration in both indicators is marked.
The usefulness of CGE model is demonstrated by applying it to a policy experiment, corresponding to one of the largest reform initiatives in Philippine agriculture, namely the tariffication of the rice import quota. Tariffication is disadvantageous to the palay sector across various measures, namely area harvested, yield, and production. Even agriculture as a whole is adversely affected, experiencing a further growth slowdown. Nonetheless, overall growth of GDP as well as household per capita expenditure rises with greater openness to rice imports. Consistent with expectation, imports are larger with tariffication, leading to more affordable consumer price of rice, and therefore greater rice demand.
Citation
Briones, Roehlano M.. 2018. Scenarios for the Philippine Agri-Food System with and without Tariffication: Application of a CGE model with Endogenous Area Allocation. © Philippine Institute for Development Studies. http://hdl.handle.net/11540/9529.Keywords
Commercial agriculture
Agriculture
Sustainable agriculture
Trade Volume
Agricultural Trade
Food Security And Trade
Regional Trade Agreements
Food Security
Agriculture
Agricultural Trade
Trade
Trade Barriers
Trade Facilitation
Sustainable agriculture
Commercial agriculture
Trade Negotiations
Trade Development
Trade And Development
Regional Trade Agreements
Agricultural Trade
Agriculture Trade Liberalization
Agroindustry
Agricultural trade
Commercial farming
Agroindustry
Sustainable development
Export volume
Export Development
Access to markets
Agricultural market
Agricultural economy
Distribution
Agricultural trade
Agricultural investment
Agricultural economy
Agricultural products
Import volume
Export volume
Tariff negotiations
Regional integration
Trade regulations
Agricultural market
Agricultural economy
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
Integrated rural development
Cost and standard of living
Population
Crop improvement
Rice farming
Crop
Food industry
Perishable goods
Food
Agricultural resource
Farm produce
Natural products in agriculture
Plant products industry
New agricultural enterprises
Agricultural industry
Foreign trade and employment
Perishable goods
Consumer goods
Agricultural products
Agricultural industry
Food industry
Food Safety
Crop Insurance
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