LAC Occasional Paper Series

18 items available

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https://hdl.handle.net/10986/18023

The LCSSD Occasional Paper Series is a publication of the Sustainable Development Department (LCSSD) in the World Bank’s Latin America and the Caribbean Region. The papers in this series are the result of economic and technical research conducted by members of the LCSSD community. The series addresses issues that are relevant to the region’s environmental and social sustainability; water, urban, energy and transport sector development; agriculture, forestry and rural development; as well as cross-cutting topics related to sustainable development such as climate change; logistics; crime and violence; and spatial economics. While all papers in this series are peer reviewed and cleared by the LCSSD Economics Unit on behalf of the Director of LCSSD, the findings, interpretations, and conclusions expressed in this paper, as in all publications of the LCSSD Occasional Paper Series, are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. The World Bank does not garantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use.

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Agro-Logistics in Central America: A Supply Chain Approach
(Washington, DC, 2012-06) World Bank
This chapter uses supply chain analysis (SCA) to identify transport and logistics bottlenecks that add costs, times and uncertainty to the exportation of perishable agricultural products from Central America. Macro-level analyses of logistics performance, including the logistics performance index, Doing Business Reports and Enterprise Surveys of the World Bank, as well as the Global Competitiveness Index of the Global Economic Forum, often leave policy-makers unclear on exactly what poor performance means for exporters and producers in Central America. How does poor road quality eat away at the profit margins of my country's producers? Extensive procedures add time to export processes, but how much time? How and to what extend does this additional time hurt the competitiveness of key industries? How does this effect vary by product type? By tracking the movement of seven carefully selected exports, these supply chains complement macro-level analyses by answering these questions for some of the region's key agricultural exports. A range of unique characteristics makes the success of perishable exports exceedingly dependent on the efficiency of the related logistics systems and the ability to connect effectively and reliably to global supply chains. Remote production zones add cost, time and variability to transport from the farm gate to the distribution, collection or processing center. Increasingly complicated international sanitary and phytosanitary standards (SPS) add institutional and procedural complexity to the supply chain. Above all, the time sensitivity of most perishable products increases the value of time and makes cold chain infrastructure and the availability of refrigerated containers essential for successful exportation.
Integrating Central American and International Food Markets : An Analysis of Food Price Transmission in Honduras and Nicaragua
(World Bank, Washington, DC, 2011-03-17) Arias, Diego; De Franco, Mario A.
In 2004 the Central American countries of Nicaragua, Honduras, Guatemala, El Salvador, Costa Rica, and the Dominican Republic signed the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) with the United States and are currently negotiating another agreement with the European Union and others. This study examines the dynamics among international and domestic food markets by assessing the transmission of international prices to domestic prices of key agriculture commodities in Honduras and Nicaragua. It analyzes to what degree, if at all, a change in the international price of a given food product influences the domestic price of that same good, at the level of the consumer and producer and in different regions in each country. This analysis provides important evidence of the price dynamics that guide public policy recommendations for a complementary agenda of agriculture trade liberaliza-tion in the region. There are two methods for analyzing the relationship between international and domestic prices. The first is to conduct a price wedge analysis-to evaluate the difference between international and domestic prices. The second method is to conduct a price transmission analysis by analyzing the variation in the percent growth of international versus domestic prices. Evidence from Nicaragua suggests that for most of the agriculture supply chains studied (except for beans) there is little competition in the country's domestic market structure. A few Nicaraguan companies own the majority share of the market, both to purchase and export agricultural products and to import and sell food domestically. Obtaining information about the structure of domestic agriculture and food markets could shed light on country-specific impediments from domestic market structure to increasing agriculture growth, reducing poverty, and improving rural competitiveness. Information on domestic market structure was difficult to obtain for this study, particularly for Honduras. But, even in a context where the domestic market structure concentrates purchasing and selling power in a few agribusiness companies, price transmission could be high.
Unintended Consequences of Food Subsidies : The Case of the Haiti Rice Subsidy
(World Bank, Washington, DC, 2011-03-17) Arias, Diego; Carneus, Maxime
Haiti is an important rice consumer, and a big rice importer. Around 86 percent of the Haitian population consumes rice. The decision to implement an indirect subsidy was made based on the fact that import prices had in the past been transmitted fully and immediately to rice consumers. Thus, a subsidy to the price of rice at the level of the importers was expected to be passed on immediately into benefits (savings) to rice consumers. The Government also prohibited rice exports to the Dominican Republic in order to avoid re-export of subsidized rice. The subsidy scheme was implemented by forming a public-private sector Presidential Commission between the Central Bank of Haiti (BRH), the President's Office and rice importers. Although the rice price subsidy program did produce the intended savings to Haitian consumers during the 4-month period of the subsidy program (April-August 2008), this intervention caused medium term distortions in the domestic market of imported rice such that domestic prices of imported rice have risen beyond the price that consumers would have faced without a subsidy program. The actual prices consumers faced after the subsidy program was implemented were much more volatile than the estimated price without a subsidy program, pointing to also an increased consumer uncertainty about local market prices for rice. Using a targeted food voucher as a subsidy mechanism is not only more efficient, but can have higher impact on nutrition as it can be used for a wide variety.
Agricultural Commodity Exchanges in Latin America and the Caribbean
(World Bank, Washington, DC, 2011-03-17) Arias, Diego; Ferreira Lamas, Alfredo; Kpaka, Musa
A commodity exchange is a goods and financial market where different groups of participants trade commodities and commodity-linked contracts, with the underlying objective of transferring exposure to commodity price risks (UNCTAD). A commodity exchange that only trades goods is known as a physical or 'cash or forward' market, while the exchange that trades price derivatives is known as financial or 'futures and options' market (see Glossary for detailed definitions). Some agriculture commodity exchanges have both. Agricultural commodity exchanges date as far back as the early 18th century. Modern exchanges, notably the Chicago Board of Trade (CBOT) was created in 1848, recently merged with the Chicago Mercantile Exchange (CME), is one the oldest and most successful futures exchanges worldwide. Today several agricultural commodity exchanges exist throughout the Latin America and Caribbean (LAC) region. They facilitate trade and financial products in countries whose economies have a relatively large share of primary and secondary agricultural activities or either account for auctions on substantial food imports. This report looks at the current development of agricultural commodity exchanges in the LAC region and offers public policy recommendations that can foster the development of such exchange markets.