Crop failures and export tariffs

Arbeitspapier

We analyse a stylized model of the world grain market characterized by a small oligopoly of traders with market power on both the supply and demand side. Crops are stochastic and exporting countries can impose export tariffs to protect domestic food prices. Our first results is that export tariffs are strategic complements and that for poor harvests equilibrium tariffs can explode (shedding some light on recent volatility in world food prices). We also show that the strategic interplay between governments of export countries and traders can give rise to a number of peculiar comparative statics. For example, it can be in the interest of traders to have poor harvests in one of the countries. Finally, we demonstrate that traders as well as consumers in import countries can benefit from cooperation between grain exporting countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 1342

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Oligopoly and Other Imperfect Markets ; Agriculture in International Trade
• Subject: grain markets ; food prices ; export tariffs ; oligopoly and oligopsony

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Baake, Pio ; Huck, Steffen
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/88768
• Last update: 10.03.2025, 11:42 AM CET