Market and welfare impacts of agri-environmental policy options in the Malaysian rice sector

Yaghoob Jafari, Jamal Othman, Arnim Kuhn

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

The use of agrochemicals including pesticides and chemical-based fertilisers in the Malaysian rice sector is stimulated through substantial direct subsidies. In light of the pursuit of environmentally friendly rice production practices, the government may consider reducing the use of these inputs. In doing so, a number of policy options, including subsidy reductions and reducing dependence on chemicals and pesticides and to move towards more natural and environmental friendly inputs are considered. This study employs a partial equilibrium model with explicit welfare functions and linkages to the Rest of the World (ROW) to address the impacts of government policies on the use of agrochemicals, food security and welfare. Results suggest that a 10 percent reduction in agrochemical subsidies considerably reduces the use of agrochemicals; however, it significantly decreases national welfare and weakens food security. Further simulation denotes a reduction of 10 percent of demand for agrochemicals has comparable impacts to that of a 10 percent reduction in agrochemical subsidies except that it increases the nation's welfare. Overall results imply that encouraging the use of organic inputs might have a more desirable impact on the variables of interest relative to reducing agrochemicals either through subsidy reduction or input restriction.

Original languageEnglish
Pages (from-to)179-201
Number of pages23
JournalMalaysian Journal of Economic Studies
Volume54
Issue number2
Publication statusPublished - 1 Dec 2017

Fingerprint

Subsidies
Policy options
Agri-environmental policy
Food security
Pesticides
Government policy
Fertilizer
Government
Welfare function
Linkage
Simulation
Partial equilibrium model
Rice production

Keywords

  • Agrochemical
  • Malaysia
  • Partial equilibrium model
  • Rice sector
  • Welfare

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

Market and welfare impacts of agri-environmental policy options in the Malaysian rice sector. / Jafari, Yaghoob; Othman, Jamal; Kuhn, Arnim.

In: Malaysian Journal of Economic Studies, Vol. 54, No. 2, 01.12.2017, p. 179-201.

Research output: Contribution to journalArticle

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