Food Policy in a Warming World

Allan Hsiao, Jacob Moscona and Karthik Sastry

No 32539, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies how governments intervene in agricultural markets to reshape the economic consequences of climate extremes. We construct a global dataset of agricultural policies and extreme heat exposure by country and crop since 1980. Extreme heat shocks to domestic production lead to policies that assist consumers by lowering domestic food prices. This effect is persistent, primarily implemented via border policies, and stronger during election years. Shocks to foreign production induce the opposite response: policies that assist producers by raising prices. These findings can be rationalized by a model in which governments use agricultural policy to redistribute among domestic interest groups. Our estimates imply that policy responses shield domestic consumers, while exacerbating losses for domestic producers and foreign consumers. Policy responses have regressive consequences globally, disproportionately harming poor and heat-exposed countries.

JEL-codes: Q18 Q54 Q56 (search for similar items in EconPapers)
Date: 2024-06
New Economics Papers: this item is included in nep-agr, nep-env and nep-int
Note: EEE EFG
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