I show that market power among exporters is a key driver of low farmer income in agricultural value chains. Using novel microdata from Ecuador, I document low farmer income and high exporter concentration across a wide range of crops. I propose a model of farmer crop choice and exporter strategic interaction that links farmer income to exporter concentration via two elasticities, which govern heterogeneity in farmer costs of switching crops and switching exporters. The estimated model implies that farmer income would be 77% higher if exporters behaved competitively. Counterfactual Fair Trade policies achieve up to half of the benefits from perfect competition, suggesting a practical method for counteracting market power.Paper
with Ana Fernandes, Ryan Haygood, Tristan Reed, and Daniel Reyes. Draft coming soon!
Following the secular decline in tariff rates over the past 20 years, non-tariff measures (NTMs) such as import quotas and product standards have become an increasingly prevalent tool for implementing import substitution policies in emerging economies. We examine how NTMs shape market structure and welfare in international and domestic markets. We construct the first dataset combining information on importers and exporters; domestic producers and consumers; and the tariffs and NTMs that restrict trade in Latin America. We show that border prices rise following the implementation of a new NTM and import markets become more concentrated. Using a model of imperfect competition, we then decompose these effects into quality and markup channels. Finally, we collect CPI and PPI microdata to examine how domestic markets respond. Together, these results shed light on the welfare consequences of import substitution policies.
with Tomás Lisazo, Ignacio Marra de Artiñano, Gabriel Scattolo, and Christian Volpe Martincus. Work in progress.
Consumers love to buy organic, but what does selling organic mean for producers and distributors? We match organic certifications from the USDA with firm-level customs data from Latin America. We estimate the impact of organic certification on export performance and decompose it into several channels. Finally, we examine spillovers to non-certified products within the firm and spillovers to non-certified firms.Blog post
Work in progress.
Global agricultural markets are dominated by large exporters, who can exercise market power over small farmers. I develop a simple model where the concentration of exporter sales, together with the sensitivity of crop choices to crop prices, is a sufficient statistic for market power. I construct the former using data from the World Bank and estimate the latter using data from the Food and Agriculture Organization. Together with the model, these data allow me to measure market power across all exported crops in more than 50 emerging markets.
“Trade Barriers” (2022)
“Global Agricultural Trade” (2022)
“Trade Barriers” (2021)
“Trade Barriers” (2020)
“Unfair Trade” (2019)