Tracing the Impacts of Food aid on Agriculture and Consumers: A Computable General Equilibrium Approach."

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Date

2007-07

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A.A.U

Abstract

This paper has analyzed the impact of four different food aid shocks on production, prices and welfare on different household groups in Ethiopia, using a computable general equilibrium (CGE) model and a social accounting matrix constructed for Ethiopia. The researcher simulated the impact of (i) a 20 percent decline in in-kind food am, (ii) a 20 percent in-kind food aid cut replaced by direct cash transfer equivalent, (iii) abolishment of in-kind emergency food aid, and (iv) all in-kind emergency food aid converted into mrect cash transfer equivalent the results suggest that food aid has some disincentive effects on food crops production through reduced prices. the simulation of the partial as well as the full shift from in-kind emergency food aid to direct cash transfer equivalent has positive but not large effects on food crops price. Moreover, direct cash transfer has expansionary effects on local agricultural production.policy implication is that to limit the use of in-kind food aid to situations of local food shortage. In other situations, food aitl should be provided in cash form to purchase food locally or regionally.

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Keywords

Agriculture, Impacts

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