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Abstract

India is one of the world’s largest importers of vegetable oils in part because of low domestic oilseed production, and tariff and nontariff barriers preventing oilseed imports. Simulation results indicate that India could lower its barriers to soybean imports without adversely affecting farmers, since imports are economically attractive to crushers even when subject to modest tariffs which sustain pre-liberalization farm and wholesale prices. Soybean processors in India achieve higher rates of capacity utilization and lower unit costs using imported oilseeds. Moreover, it is possible to partially redistribute to consumers the sizable gains processors experience by lowering the soybean oil tariff.

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