Hostname: page-component-8448b6f56d-t5pn6 Total loading time: 0 Render date: 2024-04-19T16:14:18.065Z Has data issue: false hasContentIssue false
  • English
  • Français

The terms of trade for agricultural and food products, 1951-2000*

Published online by Cambridge University Press:  25 July 2011

Raúl Serrano  and
Vicente Pinilla
Raúl Serrano*
Affiliation:
Department of Business Administration, Faculty of Economics and Business Studies, Universidad de Zaragoza, Gran Vía 4, 50005 Zaragoza, Spain. raser@unizar.es
Vicente Pinilla*
Affiliation:
Department of Applied Economics and Economic History, Faculty of Economics and Business Studies, Universidad de Zaragoza, Gran Vía 4, 50005 Zaragoza, Spain. vpinilla@unizar.es
Get access Rights & Permissions [Opens in a new window]

Abstract

This study aims to answer whether empirical records confirm the existence of a secular decline in the terms of trade affecting primary producers (the Singer–Prebisch hypothesis). The paper analyses the evolution of the terms of trade for agricultural and food products in the second half of the 20th century. We obtain sixty new real price indices for internationally traded agricultural products. We conclude, from a long-term perspective, that the deterioration in the terms of trade for agricultural and food products was strong and clear in the second half of the last century. In general, less processed products suffered a very heavy fall in their real prices. However, there was no continuous and persistent deterioration in the terms of trade either as a whole or for the great majority of the agricultural and food product groups (with the exception of natural rubber, textile fibres and other raw materials). Rather, this deterioration occurred in stages.

Resumen

El objetivo de este trabajo es comprobar con datos empíricos si ha habido, como plantearon Singer–Prebisch, un declive secular en los términos de intercambio de los productos primarios. El trabajo se centra en el análisis de la evolución de los términos de intercambio de los productos del comercio agrícola y alimentario en la segunda mitad del siglo pasado. Hemos construido sesenta nuevas series de índices de precios reales de productos agrarios que participaban en el comercio internacional. Concluimos, que desde una perspectiva de largo plazo, el deterioro de los términos de intercambio de los productos agrarios y alimentos fue nítido y fuerte en los últimos cincuenta años del siglo pasado. En general, los productos con menor grado de elaboración han sufrido una caída muy importante de sus precios reales. Sin embargo, ni en conjunto ni para la gran mayoría de los grupos de productos agrarios y alimentos (a excepción de los grupos, caucho natural, fibras textiles y otras materias primas) hubo un deterioro continuo y persistente de los términos de intercambio, sino que éste se produjo de forma escalonada.

Keywords

Singer–Prebisch hypothesisterms of tradeagricultural and food tradeagricultural pricesF14N50N70Q17Hipótesis Singer-Prebischtérminos de intercambiocomercio agrario y alimentarioprecios agrarios
Type
Articles/Artículos
Information
Revista de Historia Economica - Journal of Iberian and Latin American Economic History , Volume 29 , Issue 2 , 13 September 2011 , pp. 213 - 243
Copyright
Copyright © Instituto Figuerola de Historia y Ciencias Sociales, Universidad Carlos III de Madrid 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Askoy, M. (2005): «Global Agricultural Trade Policies», in M. Askoy, and J. Beghin (eds), Global Agricultural Trade and Developing Countries. Washington, D.C.: The World Bank, pp. 37-54.Google Scholar
Baffes, J. (2005): «Cotton: Market Setting, Trade Policies, and Issues», in M. Askoy, and J. Beghin (eds), Global Agricultural Trade and Developing Countries. Washington, D.C.: The World Bank, pp. 259-274.Google Scholar
Balagtas, J. V.Holt, M. T. (2009): «The Commodity Terms of Trade, Unit Roots, and Nonlinear Alternatives: A Smooth Transition Approach». American Journal of Agricultural Economics, 91 (1), pp. 87-105.Google Scholar
Blattman, C.; Hwang, J.Williamson, J. G. (2007): «Winners and Losers in the Commodity Lottery: The Impact of Terms of Trade Growth and Volatility in the Periphery 1870-1939». Journal of Development Economics, 82, pp. 156-179.Google Scholar
Bloch, H.Sapsford, D. (1997): «Some Estimates of Prebisch and Singer Effects on the Terms of Trade between Primary Producers and Manufacturers». World Development, 25 (11), pp. 1873-1884.Google Scholar
Bulmer-Thomas, V. (1994): The Economic History of Latin America Since Independence. Cambridge: Cambridge University Press.Google Scholar
Cashin, P.McDermott, C. J. (2006): «Properties of International Commodity Prices: Identifying Trends, Cycles and Shocks», in A. Sarris, and D. Hallam (eds), Agricultural Commodity Markets and Trade: New Approaches to Analyzing Market Structure and Instability. Rome: FAO, pp. 134-163.Google Scholar
Clemente, J.; Montañés, A.Reyes, M. (1998): «Testing for a Unit Root in Variables with a Double Change in the Mean». Econometrics Letters, 59, pp. 175-182.CrossRefGoogle Scholar
Cranfield, J.; Eales, J.; Hertel, T.Preckel, P. (2003): «Model Selection When Estimating and Predicting Consumer Demands Using International Cross Section Data». Empirical Economics, 28, pp. 353-364.CrossRefGoogle Scholar
Cuddington, J. (1992): «Long-run Trends in 26 Primary Commodity Prices». Journal of Development Economics, 39 (2), pp. 207-227.Google Scholar
Cuddington, J.Urzúa, C. (1989): «Trends and Cycles in the Net Barter Terms of Trade: A New Approach». Journal of Development Economics, 99, pp. 426-442.Google Scholar
Cuddington, J. T.; Ludema, R.Jayasuriya, S. A. (2007): «Prebish-Singer Redux», in D. Lederman, and W. F. Maloney (eds), Natural Resources. Neither Curse nor Destiny. Washington, D.C.: Stanford University Press and The World Bank, pp. 103-140.Google Scholar
Delgado, C.; Rosegrant, M.; Steinfeld, H.; Ehui, S.Coubouis, C. (1999): «Livestock to 2020: The Next Food Revolution», Food, Agriculture, and the Environment Discussion Paper 28. Washington, D.C.: International Food Policy Research Institute, pp. 1-83.Google Scholar
Diakosavvas, D.Scandizzo, P. (1991): «Trends in the Terms of Trade of Primary Commodities, 1990-1982: The Controversy and its Origins». Economic Development and Cultural Change, 39 (2), pp. 231-264.Google Scholar
Diaz-Bonilla, E.Tin, J. (2002): «That Was Then but this is Now: Multifunctionality in Industry and Agriculture», TMD Discussion Paper no. 94. Washington, D.C.: IFPRI Trade and Macroeconomics Division.Google Scholar
Dickey, D. A.Fuller, W. A. (1981): «Likelihood Ratio Tests for Autoregressive Time Series with a Unit Root». Econometrica, 49, pp. 1057-1072.CrossRefGoogle Scholar
Dyson, T. (1996): Population and Food: Global Trends and Future Prospects. London: Routledge.Google Scholar
Food and Agriculture Organization of the United Nations (1947-2000): Trade Yearbook FAO. Rome: FAO.Google Scholar
Food and Agriculture Organization of the United Nations (2002): Agricultura mundial: hacia los años 2015/2030. Rome: FAO.Google Scholar
FAOSTAT (2004): FAOSTAT-Agriculture-Database. Rome: FAO. Available at http://faostat.fao.org/default.aspx.Google Scholar
Federico, G. (2005): Feeding the World. An Economic History of Agriculture, 1800-2000. Princeton, N.J.: Princeton University Press.Google Scholar
Gehlhar, M.Coyle, W. (2001): «Global Food Consumption and Impacts on Trade Patterns», in A. Regmi (ed.), Changing Structure of Global Food Consumption and Trade. (Agriculture and Trade Report WRS-01-1). Washington, D.C.: Economic Research Service/U.S. Department of Agriculture, pp. 4-13.Google Scholar
Gilbert, C. (1996): «International Commodity Agreements: An Obituary Notice». World Development, 24 (1), pp. 1-19.Google Scholar
Grigg, D. (1995): «The Nutritional Transition in Western Europe». Journal of Historical Geography, 22 (1), pp. 247-261.Google Scholar
Grilli, E. R.Yang, M. C. (1988): «Primary Commodity Prices, Manufactured Good Prices, and the Terms of Trades of Developing countries: What the Long Run Shows». The World Bank Economic Review, 2 (1), pp. 1-47.Google Scholar
Hadass, Y. S.Williamson, J. G. (2003): «Terms-of-Trade Shocks and Economic Performance, 1870-1940: Prebisch and Singer Revisited». Economic Development and Cultural Change, 51 (3), pp. 629-656.CrossRefGoogle Scholar
Harvey, D. I.; Kellard, N. M.; Madsen, J. B.Wohar, M. E. (2010): «The Prebish-Singer Hypothesis: Four Centuries of Evidence». The Review of Economics and Statistics, 92 (2), pp. 367-377.Google Scholar
Hayami, J.Ruttan, V. (1985): Agricultural Development. An International Perspective. Baltimore, M.D.: The Johns Hopkins University Press.Google Scholar
Helpman, E.Krugman, P. R. (1985): Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy. Cambridge, Mass.: MIT Press.Google Scholar
Kellard, N.Wohar, M. E. (2006): «On the Prevalence of Trends in Primary Commodity Prices». Journal of Development Economics, 79 (1), pp. 146-167.Google Scholar
Krugman, P. R. (1980): «Scale Economies, Product Differentiation, and the Pattern of Trade». American Economic Review, 70, pp. 950-959.Google Scholar
León, J.Soto, R. (1995): «Términos de intercambio en América Latina». El Trimestre Económico, 62 (2), pp. 171-199.Google Scholar
León, J.Soto, R. (1997): «Structural Breaks and Long-Run Trends in Commodity Prices». Journal of International Development, 9 (3), pp. 347-366.Google Scholar
Lindert, P. (1991): «Historical Patterns of Agricultural Policy», in P. C. Timmer (ed.), Agriculture and the State. Growth, Employment, and Poverty in Developing Countries. Ithaca, N.Y.: Cornell University Press, pp. 1-29.Google Scholar
Lutz, M. (1999a): «A General Test of the Prebisch-Singer Hypothesis». Review of Development Economics, 3 (1), pp. 44-57.Google Scholar
Lutz, M. (1999b): «Commodity Terms of Trade and Individual Countries’ Net Barter Terms of Trade: Is There an Empirical Relationship?». Journal of International Development, 11 (6), pp. 859-870.Google Scholar
Moreno, L. A.; Sarría, A.Popkin, B. M. (2002): «The Nutrition Transition in Spain: A European Mediterranean Country». European Journal of Clinical Nutrition, 56, pp. 992-1003.Google Scholar
Newbold, P.; Pfaffenzeller, S.Rayner, A. (2005): «How Well are Long-Run Commodity Price Series Characterized by Trend Components?». Journal of International Development, 17, pp. 479-494.Google Scholar
Nguyen, T. (1981): «Trends in Terms of Trade of LDCs». Journal of Economic Studies, 8 (2), pp. 46-56.Google Scholar
Ocampo, J. A.Parra, M. A. (2003): «The Terms of Trade for Commodities in the Twentieth Century». CEPAL Review, 79, pp. 7-35.Google Scholar
Ocampo, J. A.Parra-Lancourt, M. A. (2010): «The Terms of Trade for Commodities Since the mid-19th Century». Revista de Historia Económica. Journal of Iberian and Latin American Economic History, 28 (1), pp. 11-44.CrossRefGoogle Scholar
Perron, P.Vogelsang, T. (1992): «Nonstationary and Level Shifts with an Application to Purchasing Power Parity». Journal of Business and Economic Statistics, 10, pp. 301-320.Google Scholar
Pfaffenzeller, S.; Newbold, P.Rayner, A. (2007): «A Short Note on Updating the Grilli and Yang Commodity Price Index». The World Bank Review, 21 (1), pp. 151-163.CrossRefGoogle Scholar
Pinilla, V.Ayuda, M. I. (2008): «Market Dynamism and International Trade: A Case Study of Mediterranean Agricultural Products, 1850-1935». Applied Economics, 40 (5), pp. 583-595.CrossRefGoogle Scholar
Pinilla, V.Serrano, R. (2009): «Agricultural and Food Trade in the European Community since 1963», in K. Patel (ed.), Agricultural Integration in Postwar Europe. Baden-Baden: Nomos, pp. 273-300.Google Scholar
Prebisch, R. (1950): The Economic Development of Latin America and Its Principal Problems. New York: United Nations.Google Scholar
Regmi, A.; Deepak, M. S.; Seale, J. L.Bernstein, J. (2001): «Cross-Country Analysis of Food Consumption Patterns», in A. Regmi (ed.), Agriculture and Trade Report, WRS-01-1 Changing Structure of Global Food Consumption and Trade. Washington, D.C.: Economic Research Service/U.S. Department of Agriculture.Google Scholar
Reimer, J. J.Hertel, T. H. (2004): «Estimation of International Demand Behavior for Use with Input–Output Based Data». Economic Systems Research, 16 (4), pp. 347-366.Google Scholar
Rosegrant, M. W.Paisner, M. S. (2000): Long Term Perspectives on the Change of Major Agricultural and Resource Base Variables. Washington, D.C.: International Food Policy Research Institute.Google Scholar
Sapsford, D. (1985): «The Statistical Debate on the Net Barter Terms of trade between Primary Commodities and Manufactures: A Comment and Some Additional Evidence». Economic Journal, 95, pp. 781-788.Google Scholar
Serrano, R., Pinilla, V. (2008): «Comercio agrario latinoamericano, 1963-2000: aplicación de la ecuación gravitacional para los flujos desagregados de comercio». Documento de Trabajo 412/2008, Fundación de las Cajas de Ahorro.Google Scholar
Serrano, R., Pinilla, V. (2009): «Changes in the Structure of World Trade in Agri-Food Products: Evidence from Gravity Modelling in a Long-term Perspective, 1950-2000». Working Paper AEHE DT-0905, Asociación Española de Historia Económica.Google Scholar
Serrano, R.Pinilla, V. (2011a): «Agricultural and Food Trade in European Union Countries, 1963-2000: A Gravity Equation Approach». Economies et Sociétés. Série AF ‘Histoire Economique Quantitative’, 43 (1), pp. 191-219.Google Scholar
Serrano, R.Pinilla, V. (2011b): «The Evolution and Changing Geographical Structure of World Agri-Food Trade, 1950-2000». Revista de Historia Industrial, 46, pp. 95-123.Google Scholar
Serrano, R.Pinilla, V. (2011c): «The Long-Run Decline in the Share of Agricultural and Food Products in International Trade, 1951-2000: A Gravity Equation Approach its Causes». Applied Economics, DOI:10.1080/00036846.2011587786.Google Scholar
Singer, H. (1950): «The Distribution of Gains between Investing and Borrowing Countries». American Economic Review, 40, pp. 473-485.Google Scholar
Spatafora, N., Tytell, I. (2009): «Commodity Terms of Trade: The History of Booms and Busts», IMF Working Paper WP/09/205.CrossRefGoogle Scholar
Spraos, J. (1980): «The Statistical Debate on the Net Barter Terms of Trade between Primary Commodities and Manufactures». Economic Journal, 90, pp. 107-128.CrossRefGoogle Scholar
Teuteberg, H. (1992): European Food History. London: Leicester University Press.Google Scholar
Tyres, R.Anderson, K. (1992): Disarray in World Food Markets: A Quantitative Assessment. Hong Kong: Cambridge University Press.Google Scholar
United Nations (1987): Métodos utilizados por las Naciones Unidas para construir Índices de Precios del Comercio Internacional, Informes Estadísticos, vol. 1, Serie M, no. 82 (1). New York: United Nations.Google Scholar
Yates, P. L. (1960): Food, Land, and Manpower in Western Europe. New York: Macmillan.Google Scholar
World Trade Organization (2003): Selected Long-Term, Trends International Trade Statistics 2003. Geneva: WTO. Available at http://www.wto.org/spanish/res_s/statis_s/its2003_s/its03_longterm_s.htm.Google Scholar
Yu, W.; Hertel, T.; Preckel, P.Eales, J. (2002): «Projecting World Food Demand Using Alternative Demand Systems». Economic Modelling, 21, pp. 99-129.Google Scholar
Zanias, G. P. (2005): «Testing for Trends in the Terms of Trade between Primary Commodities and Manufactured Goods». Journal of Development Economics, 78 (1), pp. 49-59.Google Scholar