Emergency reserves, private storage, or trade? How to prevent extreme grain prices in a two country setting

Jan Brockhaus and Matthias Kalkuhl

No 209224, 55th Annual Conference, Giessen, Germany, September 23-25, 2015 from German Association of Agricultural Economists (GEWISOLA)

Abstract: A broad set of trade, private storage, and public reserve related policies to stabilize food prices are analyzed in a two country model with private stockholders and producers featuring rational expectations. Major findings include that trade is a highly efficient and cost free stabilization mechanism. Even if subsidized, private storage hardly manages to avoid extreme price spikes although it is very efficient in reducing the expected volatility in normal times. In contrast, a public emergency reserve can be very useful in compensating large supply shortages at a reasonable level of fiscal costs with minimal side effects.

Keywords: Agricultural and Food Policy; Food Security and Poverty; International Relations/Trade (search for similar items in EconPapers)
Pages: 3
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi15:209224

DOI: 10.22004/ag.econ.209224

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