Agricultural & Resource Economics

AREC faculty Jeff Reimer, an assistant professor, and Man Li, a graduate research assistant, have recently been cited in an article featured in the New York Times for their research on the trade costs and gains from international trading of agricultural crops.  Their study suggests the world trade volume of agricultural crops would increase fifteen times beyond current trade volumes for agricultural goods, if worldwide trade costs were eliminated.  The result of freer world trade includes substantial welfare gains through falling consumer prices.  Generally, countries with high poverty and hunger rates have been known to restrict trade to safeguard their people.  Russia’s restriction on wheat exports and India’s 2008 rice export ban are common examples.  While these restrictions on trade are used as a preventative to widespread poverty and riots, they induce a ripple effect throughout the world, driving up commodity prices and wreaking havoc on other countries that also have high poverty rates. Reimer and Li suggest that all countries could potentially gain from more trade in international crop markets, should trade policy changes take place.

To access their article: http://people.oregonstate.edu/~reimerj/DOCUMENT/2010_Reimer_Li_AJAE.pdf

Link to NY Times Article:http://www.nytimes.com/roomfordebate/2011/02/15/is-the-world-producing-enough-food/open-up-trade-16