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Article
Tariff Rate Quota Liberalization: The Case of World Price Uncertainty and Supply Management
Canadian Journal of Agricultural Economics (2006)
  • Jean-Philippe Gervais, Laval University
  • James I Rude, University of Manitoba
Abstract

This paper examines the options for liberalizing tariff-rate quotas when a marketing board controls domestic production and international prices are stochastic. Lowering over-quota tariff and increasing import quota volumes are not equivalent. The trade-offs between the two types of trade reforms are examined through numerical simulations for the Canadian chicken industry. Introducing world price variability results in a distribution of welfare impacts for the different groups in the industry. Consumers and processors gain more with tariff liberalization than with increased import quotas. The difference in producer surplus between liberalization regimes is truncated so that producers only see down side risk under the tariff liberalization regime.

Keywords
  • Tariff-Rate Quotas (TRQ),
  • Supply management,
  • Uncertainty.
Disciplines
Publication Date
December, 2006
Citation Information
Jean-Philippe Gervais and James I Rude. "Tariff Rate Quota Liberalization: The Case of World Price Uncertainty and Supply Management" Canadian Journal of Agricultural Economics Vol. 54 Iss. 1 (2006)
Available at: http://works.bepress.com/jp_gervais/4/