The impact of banning export of cereals in response to soaring food prices: Evidences from Ethiopia using the new GTAP African database

Getachew Abebe Woldie and Khalid Siddig

MPRA Paper from University Library of Munich, Germany

Abstract: In the poorest countries like Ethiopia the spillover effects of a soaring food price is unbearable. To mitigate the recent rise in food prices and the burden on urban poor consumers, different measures have been considered by policy makers. Recently, Ethiopia banned the export of all grain products in a bid to stem huge price hikes. The export of indigenous grains, including the staple grains, like teff, maize, sorghum, and wheat are suspended indefinitely. Using the standard GTAP model and the recent GTAP Africa database, this paper simulates the overall implication of banning export of grains. Regarding the impact on prices, the simulation result tells us that prices are likely to fall. At macro level, the result reveals trade balance will not be decline following such actions. However, it has been shown that in terms of overall welfare the policy has a devastating impact as the country will likely to lose welfare equivalent of $ 148 million.

Keywords: Food price inflation; - export ban; - WTO:- Ethiopia; - GTAP (search for similar items in EconPapers)
JEL-codes: F13 E31 Q17 D58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-afr and nep-agr
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:18241

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