A Multicommodity Spatial Price Equilibrium Model with Exchange Rates and Non-Tariff Measures for Agri-Food International Trade

Anna Nagurney () and Elena Besedina
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Anna Nagurney: University of Massachusetts

SN Operations Research Forum, 2023, vol. 4, issue 4, 1-30

Abstract: Abstract International trade of agri-food products is essential for food security and the well-being of societies. Governments have increasingly turned way from tariffs as policy instruments and are, instead, applying non-tariff measures (NTMs). The evaluation of such policies that include quotas, subsidies, quality standards, as well as sanitary and phytosanitary measures, through the rigorous quantification of their impacts on the flows, prices, as well as quality levels of agricultural commodities, is highly needed, as is the inclusion of exchange rates. In this paper, we construct a multicommodity spatial price equilibrium model with exchange rates for the international trade of agri-food products that includes quotas, subsidies, quality of the commodities, along with possible deterioration in transport, minimum quality standards, and ad valorem equivalents to quantify NTMs associated with agricultural products that can affect the health and well-being of humans, animals, and plants. The methodological framework is that of the theory of variational inequalities. The extensive numerical examples are focused on wheat exports from Ukraine to Middle Eastern and North African (MENA) countries during wartime. The numerical examples include sensitivity analysis for ad valorem equivalents and governmental subsidies as well as quality coefficients with important insights for decision makers and policy makers concerned about food security affected by volumes of available agricultural commodities, their quality, as well as their supply and demand prices.

Keywords: Non-tariff measures; Sanitary and phytosanitary measures; Spatial price equilibrium; Variational inequalities; Agriculture and international trade; Food security (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s43069-023-00262-z

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