Markets Theses
The Impact of the Common External Tariff on Jamaica’s Beef Sector
Eric Bailey, Master’s Thesis, 2009. Major Professor: Dave Weatherspoon
In the context of liberalization of international trade, the
governments of CARICOM countries implemented a policy of a phased
reduction of the Common External Tariff (CET) in 1991. This policy has
been blamed for causing a contraction in the domestic beef sector in
Jamaica. This thesis investigates the trade dynamics of the Jamaican
beef sector with respect to the world market. The prime focus was to
determine what impact, if any, the phased reduction of the CET had on
meat import demand and the output of the Jamaican beef sector. It also
sought to identify the most effective policy alternatives to increase
the competitiveness of the local beef industry.
Using time series data from 1979 to 2005, demand and supply equations
were estimated using Seemingly Unrelated Regression to test for
structural changes through the use of dummy variables. The analysis
revealed that there is substitutability between imported meats and
domestic beef, and a statistical significance of the policy change for
imported meat. Furthermore, the short term supply response of domestic
beef with respect to its own price was inelastic and became more
inelastic after the policy change. A welfare analysis conducted on an
alternative tariff regime (assuming a 30% increase in tariff), showed a
net loss in social welfare.
Gomes Cambuta, Plan B Paper, 2009. Major Professor: Dave Weatherspoon
The decline in agricultural output over the years and the subsequent
pervasive food crisis in most of Africa have motivated governments and
international organizations to develop a variety of strategies, policy
alternatives and programs aimed at promoting agricultural production and
food security. Many of these strategies have been conceived and
implemented by international organizations, and in some cases the
strategies have fail to address the root cause of failure of the
agricultural sector to perform to its potential.
Therefore, this field study uses scenario analysis to engage key players
in the agriculture industry to identify causes of Angola’s loss of
production capacity over the years, the factors needed to revitalize the
agricultural-led economy, factors that can help stabilize the
agricultural sector and conditions required for the development and
coordination of the food supply chain in Angola.
The framework provided in the paper was based on an evaluation of
perceptions of future demand for locally produced agricultural products;
the country’s supply response capability; the role of the informal and
formal markets; infrastructure needs; and the development of formal
supply chains for domestic and export markets.
The methodology used was an adaptation of a methodology used in Industry
Strategic Planning and Coordination, and the Technological Demands
Determination by Prospective Analysis.
The study revealed that in spite of its high resource endowment, Angola
will first need to address institutional and structural agricultural
development constraints and develop systems that allow better
coordination of development efforts among institutions, before it is
able to produce food for export markets. The development priority for
the next five years includes creating conditions that stimulate local
production, help the country produce enough to become food self
sufficient, and gradually reduce food imports. Nevertheless, the
production for import substitution should not preclude efforts towards
targeting export niche markets.
Kudzai Mukumbi, Master’s Thesis, 2008. Major Professor: Dave Weatherspoon
The problem of market access for previously disadvantaged producers in the South African agricultural market has remained despite the removal of the apartheid policy. The South African Agricultural Broad Based Black Economic Empowerment policy (AgriBEE) seeks to redress this issue. This study examines the potential economic effects of the preferential procurement aspect of the proposed AgriBEE policy. The AgriBEE policy has a target that fifty percent of agricultural produce sold by retailers must be procured from previously disadvantaged producers. The study is an empirical analysis of the potential effects of the policy using a partial equilibrium framework. The welfare implications of the proposed AgriBEE policy on retailers, large and small-scale producers are analyzed. An international trade tool, (the domestic content policy) was adapted to analyze a domestic issue (AgriBEE policy) in the context of a single dualistic economy composed of previously disadvantaged farmers and large-scale commercial farmers. Data from the tomato, cabbage and butternut squash markets was used to quantify the welfare implications of the policy. Results from the analysis indicate that consumers are penalized with the policy but there is potential for the previously disadvantaged farmers to benefit from the policy. Another key result is that the higher the target set for preferential procurement under AgriBEE the higher the dead weight loss of the policy.
