The Effects of Rising Cabbage Import on Cabbage Production in Thailand

Itthipong Mahathanaset and Kampanat Pensupar

No 291519, ARE Working Papers from Kasetsart University - Department of Agricultural and Resource Economics

Abstract: This paper investigates the impact of a higher import of cabbage after Thailand’s FTA with trade partners enacted. A system of cabbage demand, supply and harvested area equations are estimated using time-series data and GMM estimation. The results reveal that an increase in cabbage import quantity will significantly reduce the domestic price, harvested area, and supply as well as farmers’ welfare. Using the producer surplus as a welfare measurement, our calculation shows that Thai cabbage farmers as a whole will lose money of 56,359,884 Baht. In the short run, production subsidies might be needed to alleviate the harmful effects on the farmers. However, in the long run, in order to avoid economic inefficiency due to production subsidies, food safety standards for cabbage import should be established. In addition, government should encourage the farmers to adopt GAP which helps improve their yields as well as product quality and farm gate price, and reduce their production costs, so that they can compete with cabbage imports.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 11
Date: 2019-07-17
New Economics Papers: this item is included in nep-int and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:ags:kuaewp:291519

DOI: 10.22004/ag.econ.291519

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