The impacts of trade and self‐sufficiency policies on heterogeneous rice farms in Malaysia

Roslina Binti Ali, Jeff Luckstead, Alvaro Durand‐Morat and Eric J. Wailes
Authors registered in the RePEc Author Service: Alvaro Durand-Morat ()

Review of Development Economics, 2019, vol. 23, issue 4, 1659-1673

Abstract: This paper develops a farm household model of heterogeneous Malaysian rice farmers. The model determines the domestic price of milled rice in equilibrium. The model is simulated to analyze the effects of free trade, self‐sufficiency achieved through trade policy, and the impact of free trade and self‐sufficiency when rice productivity expands. The ex ante results for free trade predict that total rice supply rises as the increase in imports offsets the decrease in domestic production, causing the domestic price of milled rice to fall by 15.8 percent. While this price decrease generates negative income effects for rice farmers, it leads to an expansion of consumption of milled rice by both the farm and urban populations. The results for self‐sufficiency through heightened tariffs predict that production for domestic rice farmers increases. However, with fewer imports, total rice supply falls, causing the domestic price of rice to increase by 41.5 percent. Because free trade is politically unfeasible and trade‐driven self‐sufficiency policies contract total rice consumption, boosting rice production through research and development is an effective way for Malaysia to increase the total supply of rice while limiting its dependence on imports.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/rode.12618

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:bla:rdevec:v:23:y:2019:i:4:p:1659-1673

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1363-6669

Access Statistics for this article

Review of Development Economics is currently edited by E. Kwan Choi

More articles in Review of Development Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().