The Impact of Food Price Shock on Heterogenous Credit Constrained Firms

Pavel Ciaian and d'Artis Kancs

No 51428, 2009 Conference, August 16-22, 2009, Beijing, China from International Association of Agricultural Economists

Abstract: The paper analyses how the rising agricultural prices affect heterogenous farm access to inputs and production under credit market imperfections in the CEE transition countries. Using farm level panel data which contains 37416 observations, we estimate a farm credit constraint equation and find that small individual farms (IF) are on average more credit constrained than large corporate farms (CF). Using the estimated parameters we simulate the effect of the recent food price shock. Our results suggest that in the presence of credit market imperfections, the relatively less credit constrained CF benefit more from higher output prices than IF, as they are able to expand their production more flexibly. These findings have implications for the developing countries: not only consumers in the LDC may loose, but also producers, which on average are more credit constrained than farmers in developed countries, may loose their market shares and hence income in the log run.

Keywords: Agricultural and Food Policy; Agricultural Finance; Production Economics (search for similar items in EconPapers)
Pages: 29
Date: 2009
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https://ageconsearch.umn.edu/record/51428/files/IAAE%20Paper.pdf (application/pdf)

Related works:
Journal Article: THE IMPACT OF FOOD PRICE SHOCK ON HETEROGENEOUS CREDIT CONSTRAINED FIRMS (2011)
Working Paper: The Impact of Food Price Shock on Heterogenous Credit Constrained Firms (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae09:51428

DOI: 10.22004/ag.econ.51428

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