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Recent Issues in Agricultural Trade and Policy

Paper Session

Friday, Jan. 6, 2023 8:00 AM - 10:00 AM (CST)

New Orleans Marriott
Hosted By: Agricultural and Applied Economics Association
  • Chair: Ian Sheldon, Ohio State University

Russia’s Invasion of Ukraine: An Initial Assessment of Export Volumes, Prices, Global Reallocations, and Policy Actions

Jason Grant
,
Virginia Tech
Shawn Arita
,
U.S. Department of Agriculture
Charlotte Emlinger
,
Virginia Tech
Sharon Sydow
,
U.S. Department of Agriculture

Abstract

On February 24, 2022, Russian forces invaded Ukraine, sending shockwaves through food, agricultural,
fertilizer, and energy markets. Beyond the more serious humanitarian impacts, Russia’s invasion has farreaching economic implications for global agriculture and resource markets. Russia and Ukraine are significant exporters of key staple grains, oilseeds, vegetable oil and meal, fertilizer, and energy products, and a significant share of these exports are sent to vulnerable net food-importing countries. On the other hand, commodity trade flows are often characterized as highly “fungible,” meaning that disruptions to exports in one region of the world can be “easily” replaced by exports of similar varieties from other regions not impacted by the disruption. Contemporaneously, an emerging question of interest has been the role of agricultural policy actions considering Russia’s aggression. The global economy was already teetering on edge with high commodity prices at the start of the year and inflation rates not seen since the early 1980s, and these trends were only amplified by the Russia-Ukraine conflict. Like previous food crises, there has been a concerning flurry of export restrictions since Russia’s military invasion further exacerbated price increases. Although food and fertilizer products have been exempted from most western nation sanctions, these staple products face indirect effects through financing and distribution. Thus, a key question in our setup is how these trade restrictions magnified some of the direct and indirect trade responses to the Russia-Ukraine conflict. This article develops a flexible, theoretically consistent, monthly product line econometric model of bilateral trade volumes to provide a within-year, ex-post evaluation of the impacts of Russia’s invasion of Ukraine on key cereal grains, oilseeds, and fertilizer export volumes, prices, and region-specific global reallocation responses.

Global Container Shipping Disruptions, Pop-Up Ports, and U.S. Agricultural Exports

Sandro Steinbach
,
North Dakota State University
Xiting Zhuang
,
University of Connecticut

Abstract

Containerized exports are significant for U.S. agriculture, especially for certain products, such
as meat, tree nuts, and oilseeds. As a result of the global container shipping disruptions, fewer containers were available for U.S. agricultural commodities, as ocean carriers circumvented traditional marketing channels and rushed containers back to be exported empty. Therefore, many carriers have suspended service to traditional agricultural export ports, such as the Port of Oakland. Carter et al. (2022) found that containerized agricultural exports were 22 percent below the counterfactual level from May 2021 to January 2022, which amounted to more than USD 10 billion in trade losses. In early 2022, the Biden administration provided funding to several ports to set up pop-up container yards to alleviate the supply chain bottlenecks. These sites are supposed to make it easier for agricultural companies to fill empty shipping containers with agricultural commodities. This article assesses the dynamic treatment effects of global container shipping disruptions and pop-up ports on U.S. agricultural exports using both bills of lading and Census Bureau export data at the U.S. port level. The non-linear panel event study design allows for dynamic lags and leads relative to the event of interest and controls for unobserved factors potentially correlated with the treatment through high-dimensional fixed effects. This flexible specification of the fixed effects enables us to account for shocks resulting from unobserved changes in the demand and supply patterns at the port-destination-product level and tease out the trade effects of pop-up ports. We exploit differences between ports that received federal investments to set up pop-up ports with ports that did not receive such investments. This analysis will allow us to assess the trade creation effects of pop-up ports and evaluate the costs and benefits of the federal and state investments in pop-up container yards.

Are Generalized System of Preferences Regimes Effective in Promoting Agricultural Trade?

William Ridley
,
University of Illinois
Farzana Shirin
,
University of Illinois

Abstract

Evidence on the efficacy of Generalized System of Preferences (GSP) tariff regimes in promoting
the exports of developing countries to developed economies has been mixed, and the question of
whether GSP regimes are effective in encouraging trade in agricultural products is one of heightened importance
due to the salience of the agricultural sector in most developing economies. We investigate the
trade impacts of GSP schemes in a structural gravity setting at a highly disaggregated product level. To
this end, we combine data on bilateral trade in 24 individual agricultural commodities (which together accounted
for roughly $361 billion in trade as of 2019) prominent in developing countries’ export baskets
with detailed product-level preferential tariff rates as implemented under the complete set of existing GSP
regimes for the years 1995–2019. We then utilize the structural foundation of the gravity model to quantify
the trade-creating effects of GSP regimes over this period. Our estimates provide the first productlevel
information on the impacts of GSP regimes on agricultural trade, thereby expanding on existing estimates
of these effects that only examine trade at highly aggregated sectoral levels.

Discussant(s)
Michel A. Robe
,
University of Illinois
JEL Classifications
  • A1 - General Economics