 Do subsidies matter in food price stabilization? Evidences from Ethiopia in a computable general equilibrium frameworkGetachew Woldie and Khalid Siddig MPRA Paper from University Library of Munich, Germany Abstract: In the poorest countries like Ethiopia the spillover effects of a soaring food price is unbearable. To mitigate the recent rise in food prices and the burden on urban poor consumers, policy makers have considered various measures. A recent shift from subsidizing oil to grain to ease the spiraling cost of food is one attempt the Ethiopian government has made so far. To this end, the government has removed an $800m annual subsidy on petroleum products and used the money to combat rising grain prices. Using the standard GTAP model and the recent GTAP Africa database, this paper simulates the overall implication of 5 and 10 percent increase of subsidy on wheat. Regarding the impact on prices, the simulation result tells us that prices have indeed fall. At macro level, the result reveals subsidy on wheat leads to a decline in the overall trade balance. In terms of welfare, the intervention is likely to have a positive impact. Keywords: Food policy; price policy; WTO; Ethiopia; GTAP (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:29117 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
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