Economic Impacts of Import Liberalization Policy On Agricultural Food Sector in Malaysia

Roslina Binti Ali, Aimi Athirah Ahmad and Suhana Safari

International Journal of Food and Agricultural Economics (IJFAEC), 2020, vol. 08, issue 4

Abstract: Deficient domestic production and supply while substantial requirements from both local food industries and final consumption largely dictate the government to remove a non-tariff barrier through implementing unrestricted quota policy for beef, mutton, and coffee in Malaysia. Previous studies discovered varied impacts of the non-tariff barrier removal across countries and commodities. After approximately five years of implementation, it is pertinent to evaluate the impacts of import quota removal on both sides – local industries and consumers to those primary commodities. A secondary database was utilized before and after the quota removal period. The major quantitative methods, nonparametric trend test, and multivariate dummy regression were applied to identify the monotonic trends and to estimate the effects of quota removal, respectively, focusing on value-added exports and market prices. Before the regression analysis, diagnostic tests were conducted to confirm the validity of each estimated model. Following the implementation of liberalized import policy, all commodities experienced significant impacts, however, the impacts and magnitude differ considerably – value-added beef exports decreased as larger than mutton while value-added exportsfor coffee increased. The market prices significantly increased in both livestock commodities with mutton was nearly twice as a beef increment. Besides, the trend analysis indicated declining imports with increasing market prices for both beef and mutton after the quota removal, yet, coffee showed contrary effects. While the trade theory promises better off after removing non-tariff barriers, this study found different consequences between commodities across economic indicators at the national level.

Keywords: Agricultural and Food Policy; Demand and Price Analysis; Food Security and Poverty; International Development; International Relations/Trade; Political Economy (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/307653/files/vol8.no4.pp325.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:ijfaec:307653

DOI: 10.22004/ag.econ.307653

Access Statistics for this article

More articles in International Journal of Food and Agricultural Economics (IJFAEC) from Alanya Alaaddin Keykubat University, Department of Economics and Finance Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().