To
better guide the policymakers on
agricultural investments, an agriculture-based model seldom used in rice
economic studies is proposed by a returning scholar based at Philippine Rice
Research Institute (PhilRice) in Science City of Muñoz, Nueva Ecija.
Dr. Marc Jim Mariano, who
recently graduated from Monash University in Australia, said that results
derived from Computable General Equilibrium (CGE) model are useful for the
policymakers in knowing the economy-wide effects of a policy.
Holding a PhD in Economics,
Mariano intends to construct an agriculture-based CGE model for the Philippines
with household microsimulation and updated database – the first CGE model yet
developed for PhilRice.
“There are many methods used
in analyzing the socioeconomic impacts of rice policies and market
interventions in the Philippines. However, most of them are partial equilibrium
analyses, only taking a part of the market so results are usually focused on
one sector at a time. With its ability to capture the relationships and interactions
of various agents and sectors in the economy, CGE provides a more holistic
approach in assessing economy-wide impact,” Mariano explained.
Amidst the ASEAN integration
this year, Mariano said that the model can simulate the possible economic implications
of this trade reform; helping the decision-makers craft strategies to ensure
food sufficiency and farmer competitiveness.
Applying the model in his
study, the youngest PhD graduate of PhilRice found that removing the
government’s rice domestic support mechanisms improves economic efficiency due
to the re-allocation of labor and land inputs into more productive or higher
value uses. Mariano used a CGE model to investigate the effects of removal of
price subsidies on paddy production and rice consumption and removal of high
tariff restriction on imported rice.
“However, in the event of a
sudden severe spike in the world price of Philippine rice imports, the removal
of existing rice market interventions makes the country more vulnerable to a
loss in the purchasing power of households,” he said.
Mariano finished Bachelor of
Agricultural Economics from the University of the Philippines Los Baños as
cum laude. He has a master’s degree in economics from the University of New
England, Australia where he was a recipient of the Australian Leadership Awards
scholarship. His thesis was awarded the Best Masters Research by the Australian
Agricultural and Resource Economics Society. (PhilRice)
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