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Illicit Agricultural Trade

Published online by Cambridge University Press:  15 September 2016

Peyton Ferrier
Peyton Ferrier*
Affiliation:
Economic Research Service, U. S. Department of Agriculture, in Washington, D. C.
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Abstract

Agricultural and wildlife trade is subject to sudden, disruptive import restrictions arising from concerns over sanitary and phytosanitary safety and the conservation of natural resources. These restrictions can create significant international price differences that encourage the smuggling of goods across borders. This article presents an equilibrium model of smuggling where the supply and demand for smuggled goods depend on interregional price disparities in the presence of a trade ban. In this model, smuggling is more prevalent when demand and supply among trade partners is more inelastic or when there are fewer total trade partners at the time a trade ban is enacted. Applications are presented for regionalization, destruction of goods in government eradication programs, price support, stockpiling, and the development of substitutes. Regionalization may increase smuggling under certain production and consumption patterns.

Keywords

illicit tradeinvasive speciessmugglingSPS AgreementCITESEndangered Species Actregionalization
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 37 , Issue 2 , October 2008 , pp. 273 - 287
Copyright
Copyright © 2008 Northeastern Agricultural and Resource Economics Association 

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