Iii age analysis of trade policy reform and environment
This presentation is the property of its rightful owner.
Sponsored Links
1 / 21

III. AGE analysis of trade, policy reform and environment PowerPoint PPT Presentation


  • 69 Views
  • Uploaded on
  • Presentation posted in: General

III. AGE analysis of trade, policy reform and environment. Protection, food policies and the environment: Philippines. After several decades of fitful growth, heavy reliance on NR for incomes continues. Structural change has been slow Additions to the labor force work mainly in agric/services

Download Presentation

III. AGE analysis of trade, policy reform and environment

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Iii age analysis of trade policy reform and environment

III-B

III. AGE analysis of trade, policy reform and environment


Protection food policies and the environment philippines

III-B

Protection, food policies and the environment: Philippines

  • After several decades of fitful growth, heavy reliance on NR for incomes continues.

    • Structural change has been slow

    • Additions to the labor force work mainly in agric/services

    • Poverty (esp. in rural areas) remains high

  • While problems of urban pollution and infrastructure are severe, degradation of natural resource base (soils, forests, watershed services and fisheries) is the major problem.


Protection food policies and the environment philippines1

III-B

Protection, food policies and the environment: Philippines

  • Forest cover has fallen from >50% to <20% since 1950

  • Deforestation continues in spite of huge decline in commercial timber harvesting

    • Upland population doubled 1960-90, to >18m.

    • Upland agricultural area increased about sixfold.

    • Most upland agriculture is cereals, mainly corn.

    • Intensification and expansion are also associated with rapid land degradation plus off-site damages.


Iii age analysis of trade policy reform and environment

III-B


Spatial dimensions

III-B

Spatial dimensions

  • Population growth in cities and at cultivated frontier (forest margin)

  • In rural areas, most rapid growth in uplands, where land is ‘freely’ available

  • The main regions (island groups) are heterogeneous in terms of climate, soils, econ. conditions, etc.


Policy legacies and linkages

III-B

Policy legacies and linkages

  • ISI as development strategy

    • Maintained longer than ASEAN neighbors

    • Protection for capital-intensive mfg; this discouraged agricultural investment and production.

    • Low labor demand growth in mfg kept real wages low

    • Persistent poverty and income inequality

  • Ag. development policy (inc. Green Revolution) benefited mainly lowland ag.

  • Food policy protected cereals relative to other ag.

    • Decline of traditional upland crops (e.g. coffee)


Recent policy trends

III-B

Recent policy trends

  • Reductions in manufacturing protectionism

  • Relaxation of quantitative restrictions on agricultural trade (WTO compliance)

    • But QRs mainly replaced by prohibitive tariffs, esp in rice and corn.

    • Thus cereals excluded from trade liberalization agenda.

    • What environmental and welfare implications?


The apex model

III-B

The APEX model

  • Johansen-style AGE model

  • Main features:

    • 50 sectors, including 12 agriculture

    • Ag. production in 3 regions (specific factors)

    • 5 types of household (by income quintile), with unique asset ownership & consumption patterns

    • 2 types of labor (skilled and unskilled)

    • Data are sourced from Philippine Social Accounting Matrix and econometric estimates (for all elasticities)

    • Includes wide range of taxes and subsidies.


Production structure industry

III-B

Production structure: industry

Output

(Fixed proportions)

Composite primary factorIntermediates

(Flexible function)(CES)

Labor Variable K Fixed K Imported Domestic

SkilledUnskilled


Iii age analysis of trade policy reform and environment

III-B


Environmental stories

III-B

Environmental stories

  • Soil erosion depends mainly on corn area planted

  • Deforestation for ag. land implied by changes in land and labor prices

  • Industrial emissions calculated using AHTI


Policy experiments

III-B

Policy experiments

  • Except rice and corn, most highly protected sectors are in heavy industry (Table 6.3).

    • These are also the least L-intensive

    • And contain the biggest polluters

  • Experiment 1: reduce non-agricultural tariffs by 25%

  • Experiment 2: reduce all tariffs by 25%


Closure

III-B

Closure

  • Macro closure:

    • G budget and current account assumed to balance;

    • Savings and investment fixed;

    • So burden of adjustment falls on households

    • This yields a measure of welfare change (marketed goods) based on household expenditures

  • Micro closure:

    • Ag. land area is endogenous (allows for expansion, fallow)


Iii age analysis of trade policy reform and environment

III-B


Iii age analysis of trade policy reform and environment

III-B


Iii age analysis of trade policy reform and environment

III-B


Iii age analysis of trade policy reform and environment

III-B


Iii age analysis of trade policy reform and environment

III-B


Iii age analysis of trade policy reform and environment

III-B


Trade liberalization summary

III-B

Trade liberalization : summary

  • Scale effect: very small, as expected

  • Composition effect: liberalization reduces pressures on NR base, has mixed effects in industry

  • Real h’hold expenditures on goods: almost no change

  • Income distribution worsens

  • Clear env. benefits in agriculture, and reduced pressures for deforestation by farmers


Ongoing policy issues

III-B

Ongoing policy issues

  • Philippine poverty and income inequality have deep historical roots

    • Trade reform alone is not sufficient

  • Major environmental problems stem from poverty, low non-ag labor absorption, and open access

    • Trade reforms have indirect environmental benefits, but more is needed

    • EKC may be ‘too high’ regardless of trade policy; direct environmental policies are also needed

    • Protecting corn sector (food policy) cancels effects of environmental policies


  • Login