Arbeitspapier

Agricultural Trade, Biodiversity Effects and Food Price Volatility

Biotic factors such as pests create biodiversity effects that increase production risks and decrease land productivity when agriculture becomes more specialized. We show in a Ricardian two-country trade setup that production specialization is incomplete under free trade because of the decrease in land productivity. Pesticides allow farmers to reduce these biodiversity effects, but they are damaging for the environment and for human health. When regulating farming practices under free trade, governments face a trade-off: they are tempted to restrict pesticide use compared to under autarky because domestic consumption partly relies on imports and thus depends less on them, but they also want to preserve the competitiveness of their agricultural sector on international markets. We show that at the symmetric equilibrium under free trade, restrictions on pesticides are generally more stringent than under autarky. As a result, trade increases the price volatility of crops produced by both countries, and of some or all of the crops that are country-specific, depending on the intensity of the biodiversity effects.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 5417

Klassifikation
Wirtschaft
Trade and Environment
Agriculture in International Trade
Thema
agricultural trade
food prices
agrobiodiversity
pesticides

Ereignis
Geistige Schöpfung
(wer)
Bellora, Cecilia
Bourgeon, Jean-Marc
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2015

Handle
Letzte Aktualisierung
20.09.2024, 08:22 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Bellora, Cecilia
  • Bourgeon, Jean-Marc
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2015

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