Risk Assessment of Food Supply: A Computable General Equilibrium Approach

Tetsuji Tanaka

    Research output: Book/ReportBook

    40 Citations (Scopus)

    Abstract

    The world’s food markets have experienced significant instability in recent years and this instability has led to increasing concerns over food security at both the regional and global levels. This thesis employs an advanced computable general equilibrium (CGE) approach and conducts empirical research to address three important topics in the literature of food security assessment.

    The first element of the research revisits the long-standing trade liberalisation debateon Japanese rice imports. The Japanese government has been reluctant to liberalise the rice trade on the grounds that it would threaten its ‘‘national food security’’ in the events of such shocks as crop failure and trade embargoes, and it would make the Japanese economy more dependent upon food imports and, thus, more susceptible to these risks. Using a CGE model with a Monte Carlo simulation, the research quantifies the welfare impacts of productivity shocks and export quotas by major rice exporters and finds little evidence of Japan suffering
    from such shocks.

    The second aspect of the research explores the root causes of the soaring grain prices in 2008 by assessing the impacts of possible factors on world-market prices of wheat, rice and maize within a global CGE modelling framework. It is found that the primal actual demand and supply factors explain only about 20 per cent of the increases in terms of wheat, rice and maize.

    The third part of the research assesses the impact of the escalating world-market grain price in 2008 on the grain prices in the least developed countries (LCDs), using a world trade CGE model. It finds that while the price rises of wheat and maize are limitedly explained by the main real-side factors, over half the rice price hike is accounted for by export restrictions and oil price spike. The emergence of biofuel production, which is popularly considered to be one of the most critical driving forces, marginally increases the grain prices of LDCs. This is because LDCs have little import and export of maize, and feedstock of biofuel (sugar cane and oil seed) does not show strong substitutive effects on the price of wheat, rice and maize.

    Through these analyses, the thesis makes a methodological contribution and identifies policy implications. The methodological contribution is the application of the Monte Carlo method to CGE analysis, which made it possible to evaluate the probabilistic impacts of Japan’s rice trade liberalisation. Policy implications are identified for trade liberalisation, grain stocks, export restrictions, and biofuel policy including energy price and financial speculation.
    Original languageEnglish
    PublisherCambridge Scholars Pub.
    Number of pages160
    ISBN (Print)1443841838, 978-1443841832
    Publication statusPublished - 2012

    Fingerprint

    Computable general equilibrium
    Risk assessment
    Food supply
    Maize
    Wheat
    Food security
    Factors
    Biofuels
    Trade liberalization
    Japan
    Import
    Computable general equilibrium model
    World market
    Less developed countries
    Policy implications
    Crops
    Food imports
    Japanese economy
    Empirical research
    Productivity shocks

    Cite this

    Risk Assessment of Food Supply : A Computable General Equilibrium Approach. / Tanaka, Tetsuji.

    Cambridge Scholars Pub., 2012. 160 p.

    Research output: Book/ReportBook

    Tanaka T. Risk Assessment of Food Supply: A Computable General Equilibrium Approach. Cambridge Scholars Pub., 2012. 160 p.
    Tanaka, Tetsuji. / Risk Assessment of Food Supply : A Computable General Equilibrium Approach. Cambridge Scholars Pub., 2012. 160 p.
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    AB - The world’s food markets have experienced significant instability in recent years and this instability has led to increasing concerns over food security at both the regional and global levels. This thesis employs an advanced computable general equilibrium (CGE) approach and conducts empirical research to address three important topics in the literature of food security assessment. The first element of the research revisits the long-standing trade liberalisation debateon Japanese rice imports. The Japanese government has been reluctant to liberalise the rice trade on the grounds that it would threaten its ‘‘national food security’’ in the events of such shocks as crop failure and trade embargoes, and it would make the Japanese economy more dependent upon food imports and, thus, more susceptible to these risks. Using a CGE model with a Monte Carlo simulation, the research quantifies the welfare impacts of productivity shocks and export quotas by major rice exporters and finds little evidence of Japan suffering from such shocks. The second aspect of the research explores the root causes of the soaring grain prices in 2008 by assessing the impacts of possible factors on world-market prices of wheat, rice and maize within a global CGE modelling framework. It is found that the primal actual demand and supply factors explain only about 20 per cent of the increases in terms of wheat, rice and maize. The third part of the research assesses the impact of the escalating world-market grain price in 2008 on the grain prices in the least developed countries (LCDs), using a world trade CGE model. It finds that while the price rises of wheat and maize are limitedly explained by the main real-side factors, over half the rice price hike is accounted for by export restrictions and oil price spike. The emergence of biofuel production, which is popularly considered to be one of the most critical driving forces, marginally increases the grain prices of LDCs. This is because LDCs have little import and export of maize, and feedstock of biofuel (sugar cane and oil seed) does not show strong substitutive effects on the price of wheat, rice and maize. Through these analyses, the thesis makes a methodological contribution and identifies policy implications. The methodological contribution is the application of the Monte Carlo method to CGE analysis, which made it possible to evaluate the probabilistic impacts of Japan’s rice trade liberalisation. Policy implications are identified for trade liberalisation, grain stocks, export restrictions, and biofuel policy including energy price and financial speculation.

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    SN - 1443841838

    SN - 978-1443841832

    BT - Risk Assessment of Food Supply

    PB - Cambridge Scholars Pub.

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