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Economic impacts of changes in wheat’s import tariff on the Sudanese

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Article · August 2013

DOI: 10.1016/j.jssas.2013.08.002

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Journal of the Saudi Society of Agricultural Sciences (2013) xxx, xxx–xxx

King Saud University

Journal of the Saudi Society of Agricultural Sciences

www.ksu.edu.sa
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FULL LENGTH ARTICLE

Economic impacts of changes in wheat’s import tariff

on the Sudanese economy
a,*
Omer Elgaili Elsheikh , Azharia Abdelbagi Elbushra b, Ali A.A. Salih c

a
Agricultural Economics Department, College of Food and Agricultural Sciences, King Saud University, P.O. Box 2460,
Riyadh 14511, Saudi Arabia
b
The King Faisal University, College of Agriculture and Food Science, Department of Consumer Sciences and Agribusiness,
Saudi Arabia
c
The University of Khartoum, Department of Agricultural Economics, Faculty of Agriculture, P.O. Box. 32, Postal Code 13314,
Shambat, Khartoum Bahri, Sudan

Received 24 February 2013; accepted 2 August 2013

KEYWORDS Abstract This study quantifies the impacts of change in wheat’s import tariffs on gross domestic
Sudan; product (GDP) and its components, wheat imports, sorghum exports, and domestic production of
Wheat; wheat and sorghum in the Sudan. The study objective is to provide a deep insight of the issue in
Import tariff; concern to stakeholders affiliated with food security. As a method of analysis, the study uses a stan-
CGE model; dard computable general equilibrium model, designed for developing countries by the International
SAM Food Policy Research Institute. Sudan’s Social Accounting Matrix for the year 2004, disaggregated
for agriculture, has been used as core database. Different scenarios have been postulated and sim-
ulated.
Changes in import tariff of wheat had broad inter-linkages among all sectors of the economy.
Reduction of wheat tariff has increased wheat imports; associated with a decrease of imports of
other agricultural, industrial and services sectors. Increasing wheat imports could lower the domes-
tic price and, hence, reduce the resources directed to its production. The overall effect is an improve-
ment of GDP, balance of trade, and investment, and decreased private consumption. Increasing
import tariff on wheat would reduce its imports and encourage its production for self-sufficiency,
with less efficiency and negative impact on GDP.
Domestic production of wheat is highly variable over time, and falls short of satisfying the

* Corresponding author. Tel.: +966 (1) 4678845, mobile: +966

560022520.
E-mail addresses: omerii@yahoo.com, oelsheikh@ksu.edu.sa (O.E.
Elsheikh), azhbushra@yahoo.com (A.A. Elbushra), hadiasib@ya-
hoo.com (A.A.A. Salih).
Peer review under responsibility of King Saud University.

Production and hosting by Elsevier

1658-077X ª 2013 Production and hosting by Elsevier B.V. on behalf of King Saud University.
http://dx.doi.org/10.1016/j.jssas.2013.08.002

Please cite this article in press as: Elsheikh, O.E. et al., Economic impacts of changes in wheat’s import tariff on the Sudanese
economy. Journal of the Saudi Society of Agricultural Sciences (2013), http://dx.doi.org/10.1016/j.jssas.2013.08.002
2 O.E. Elsheikh et al.

demand, whereas wheat consumption is increasing over time. Encouraging innovation of conve-
nient and fast food industry using domestic traditional grains is recommended to curb wheat con-
sumption. Furthermore, wheat imports should be conditioned on availability of hard currency,
domestic production capacity, and food gap, while maintaining stable exchange rate that strikes
a balance between encouraging sorghum exports and wheat imports. This should be associated with
increased investment in stabilizing and increasing wheat production, and remedy the predicaments
facing agriculture.
ª 2013 Production and hosting by Elsevier B.V. on behalf of King Saud University.

1. Introduction and improved seeds. In addition, farmers apply the recommen-

Wheat is the second cereal, after sorghum, in terms of food grain
consumption, and the main food staple in the northern region
and urban areas of the Sudan. In addition, cultivation of wheat
is an important economic activity, whereas wheat and wheat
flour represent considerable figures in the Sudanese interna-
tional trade. The grain is produced in two distinct areas, which
are the public irrigated schemes in the central region, and the
pump irrigated schemes in the northern region. In 2010, the
quantity of wheat produced was 403,000 tons (FAO, 2012).
Wheat consumption in the Sudan is increasing over time,
whereas domestic production of the grain falls short of satisfy-
ing the demand. Thus, the country relies heavily on the inter-
national market for securing enough wheat supply. Wheat
import is dramatically increasing over time. Average quantities
of wheat and wheat flour imports for the 1970th, 1980th,
1990th, and 2000th decades were 140,682, 291,779, 282,592,
and 1,170,605 tons, respectively, whereas the corresponding
nominal values were 21,047, 52,929, 53,873, and 265,931 thou-
sand US$. In 2010, the quantity of wheat imports was
1,843,941 tons, which is about 4.6 times the quantity produced
domestically (FAO, 2012).
Thus, policy changes regarding wheat generate complicated
impacts on various macro and microeconomic variables. This
study quantifies the impacts of change in wheat’s import tariffs
on some macro and microeconomic indicators. These indicators
are the gross domestic product (GDP) and its private consump-
tion, investment, and balance of trade components, as well as
(the microeconomic indicators of) wheat imports, sorghum ex-
ports, and domestic production of sorghum and wheat. The
objective of the study is to provide a deep insight of the interre-
lated effects of changes in wheat’s import tariff to stakeholders
affiliated with food security in the Sudan. Wheat is selected for
this study because it is directly related to people’s diet and food
security, as well as farmers’ welfare in the study area.
2. Wheat production in the Sudan
dations of the scheme’s administration and the scientific meth-
ods recommended by the Agricultural Research Corporation,
which exerts considerable effort in generating improved seeds
and better culture activities.
Secondly, the small-scale schemes are scattered around the
Nile and its tributaries. These schemes cover an area of about
588,000 ha adjacent to the banks of the Nile. Contrary to the
first type, there is no common network for irrigation. Farmers
use small diesel and electric pumps to lift irrigation water from
the Nile. Fertilizers are used in a limited scale because of the fer-
tile silt deposit of the Nile. The government does not provide
services such as those enjoyed by the large-scale schemes. Nev-
ertheless, productivity of this sector is higher than that of the
large scale schemes mainly, due, to the colder weather in winter.
However, wheat production is highly variable. The coeffi-
cient of variation (CV) of quantities produced in the period
from 1961 to 2010 was 0.73. This is due to a variability in both
the harvested area and yield of the grain. However, variability
in area is much higher than that of average yield. The CV of
harvested area and average yield for the aforementioned period
were 0.59 and 0.37, respectively. In fact, wheat yield is very low
compared with the internationally attained level. For instance,
in 2010 the average yield of the grain was 1794 kg/ha, whereas
the world average yield was 3007 kg/ha (FAO, 2012).
In addition, wheat production faces the common impedi-
ments hindering agricultural development. For instance, the
government imposes many direct and indirect taxes on produc-
tion inputs and agricultural products in all stages of production
and marketing processes. The sector also suffers weakness or
lack of infrastructure, heavy dependence on rain (which is
highly variable in terms of quantity and distribution), low pro-
ductivity, poor services available in the input and output mar-
kets, drought, desertification and environmental degradation,
external debt, as well as social and political instability (El-
sheikh, 2001; Ministry of Finance and National Economy,
2009). All these factors have created a negative attitude toward
the sector. Thus, one of the most important requirements is to
restore the motive for working in agricultural production.

Average quantities of wheat production in the Sudan in the

1970th, 1980th, 1990th, and 2000th decades were 208,730,
178,700, 523,500, and 464,770 tons, respectively. This shows
an upward trend. The grain is produced in two distinct sectors
of agriculture. Firstly, the large-scale public irrigated schemes,
for which the government provides irrigation services via huge
irrigation facilities (dams, irrigation network, pumps. . .etc.).
The biggest of these schemes is the Gezira and Managil
Scheme, which covers slightly more than 0.84 million ha. Each
scheme is composed of small farms, approximately 2.1–9.2 ha.
The sector uses advanced technology, fertilizers, pesticides,
3. Method of analysis
One of the main tools of tracing the anticipated impacts of
policy changes is the use of econometric modeling. The study
uses a standard computable general equilibrium (CGE) model,
designed by the International Food Policy Research Institute
(Löfgren et al., 2002). The model is a set of simultaneous
nonlinear equations defining the behavior of different actors,
and includes a set of constraints. The CGE covers markets
(for factors and commodities), balances for saving-investment,

Please cite this article in press as: Elsheikh, O.E. et al., Economic impacts of changes in wheat’s import tariff on the Sudanese
economy. Journal of the Saudi Society of Agricultural Sciences (2013), http://dx.doi.org/10.1016/j.jssas.2013.08.002
Economic impacts of changes in wheat’s import tariff on the Sudanese economy
government, and the rest of the world accounts. Thus, the
model provides a detailed description of the Sudanese econ-
omy, with special emphasis on agriculture.
Different scenarios have been postulated and simulated. The
model has been implemented using a general algebraic model-
ing system software. The Sudan’s Social Accounting Matrix
(SAM), described in the next section, has been developed and
used as core data base. The SAM has been calibrated using elas-
ticity values from the literature for estimating the shift and
share parameters of the constant elasticity of substitution
(CES) and constant elasticity of transformation (CET) func-
tions. This validates the model by reproducing the simulated
benchmark data set as equilibrium solution.
The model is written as a set of simultaneous equations,
many of which are nonlinear, without objective function (see
Appendix). The equations define the behavior of different
actors and include a set of constraints that should be satisfied
by the system as a whole. These constraints cover markets (for
factors and commodities) and macroeconomic aggregates
including the balances of saving-investment, government,
and current account of the rest of the world. The macro con-
straints (model closures) are specified as follows: in the factor
market balance, all demand variables are flexible while the
supply variables are fixed, whereas the factor wage is the equil-
ibrating variable. In the government balance, the government
savings are flexible while all tax rates are fixed. Regarding
the current account balance, foreign savings are fixed and
the real exchange rate is the equilibrating variable. For the
saving-investment balance, investment is fixed while saving is
a flexible variable (investment-driven model).
The major blocks of the model include producers, factor
markets, commodity markets, households, the government,
and the rest of the world. Producers are assumed to maximize
profit subject to the level of technology. A general CES pro-
duction function, rather than its special case of a Cobb–Doug-
las function, has been used because it does not impose any
prior restriction on the value of elasticity of substitution
between factors, whereas the latter imposes a unitary value.
Producers earn their income from domestic sales and exports
reflecting the assumption of imperfect transformability between
these uses. Allocation of output between these two markets is
determined by the relative prices received in domestic and for-
eign markets. The received income is allocated to purchases of
intermediate inputs and payments for production factors. For
the domestic product markets, the demand side consists of
investment, private and government consumption, and interme-
diate input demands. The supplies come from domestic sale and
imports depending on their relative prices. Flexible prices clear
the market segments for products of domestic origin.
For the model’s consistency, most of the model’s parameters
are set endogenously in a manner that assures the base solution
would exactly reproduce the values of SAM (calibration pro-
cess). For the remaining parameters, elasticity values are set
exogenously. The consistency of the model was checked by
equality of total savings and total investment at equilibrium,
and the balance of SAM before and after running the model.
4. Data
The Sudan’s SAM for the year 2004 disaggregated for agricul-
ture, has been developed and used as a core database (Table 1).
Please cite this article in press as: Elsheikh, O.E. et al., Economic impacts of changes in wheat’s import tariff on the Sudanese
economy. Journal of the Saudi Society of Agricultural Sciences (2013), http://dx.doi.org/10.1016/j.jssas.2013.08.002
3
The year 2004 was chosen as a base year because it is a ‘‘nor-
mal year’’ for the Sudanese economy, and that it is the most
recent date with comprehensive data, specifically for capital
formation. The term ‘‘normal year’’ refers to the fact that there
was no drought or any other agricultural crisis, which fre-
quently occurs in the Sudan, and no peak periods of economic
cycle of boom, or recession during that year.
In this SAM, the activity and commodity accounts are
disaggregated into agriculture, industry and service accounts.
The agriculture account is further disaggregated into sesame,
sorghum, cotton, wheat, and other-agriculture (mainly live-
stock) accounts. This disaggregation is based on their relative
economic importance.
The ‘‘factors of production’’ account is disaggregated into
‘‘labor’’ and ‘‘capital’’ accounts. The ‘‘saving-investment’’
account is disaggregated into ‘‘fixed capital formation’’ and
‘‘change in stocks’’ accounts. Lastly, taxes and tariffs are
disaggregated into ‘‘income tax’’, ‘‘activity tax’’ which refers
to indirect taxes on production, ‘‘import tariff’’, and ‘‘value
added tax’’ accounts. The data sources are Central Bureau of
Statistics (2008), Central Bank of Sudan (2010), Sudan Cus-
toms Authority (2008), Ministry of Agriculture and Forestry,
2008, and Ministry of Finance and National Economy, 2006.
The input–output coefficient developed by Elbushra (2007)
was used in building the aggregated SAM, while those at the
agricultural sector’s disaggregated level have been developed
and validated based on ‘‘Best Educated Guess’’ (Table 2).
5. Literature review
The use of CGE modeling as a tool for assessing trade liberaliza-
tion policy is well documented in the literature. For the case of
the Sudan, Elbushra (2007) has used a CGE model based on
SAM for the year 2000 to analyze the possible impacts of
macroeconomic policy changes (import tariffs, activity tax and
exchange rate), world price shocks, and the use of improved
agricultural technology on the performance of the economy.
The study also specified the optimal mix of liberalization policy
that could achieve higher economic performance.
The study revealed that indirect tax reduction (import tariff
and activity tax) had improved the GDP, but at the cost of dete-
riorated balance of trade. Increasing the direct tax was
recommended to compensate for the declining government
income. Depreciation of exchange rate had a better impact on
the economy and agricultural sector than appreciation. On the
other hand, the negative effect of currency appreciation on the
economy can be reduced if it is associated with indirect tax reduc-
tion and improved agricultural efficiency. Increased world prices
of agricultural imports had a greater negative effect on the GDP
and a more positive effect on the balance of trade, than the in-
crease in world prices of the industrial imports. In addition, in-
creased world prices result in increasing agricultural exports.
Improving the agricultural efficiency could lead to further positive
effect on macroeconomic policies and offset the negative effect of
increased international prices. However, the study did not go fur-
ther by disaggregating the agricultural sector by commodities.
6. Model simulations
Impacts of changes in import tariff of wheat on the Sudanese
economy have been simulated. The different scenarios are
4 O.E. Elsheikh et al.

Table 1 Sudan disaggregate social accounting matrix for the year 2004 (SDG million).
Prod. factor Current acc. Capital acc. Agric. activity Aind Aser
Lab Cap Hh Gov S-I Dstk Asesa Asorg Acott Awhea Aother
Prod. factor Lab 88.9 140.2 23.7 20.2 3168.3 1656.4 12683.9
Cap 503.6 794.7 134.1 114.7 17957.8 8466.9 19502.4
Current acc. Hh 17780.5 41392.4 2669.7
Gov 6081.8
Capital acc. S-I 9737.0 1222.3
Dstk 1845.0
Agric. act. Asesa
Asorg
Acott
Awhea
Aother
Aind
Aser
Agric. comm Csesa 175.7 0.6 3.5 95.4 4.6 108.4 114.0
Csorg 471.1 1.6 9.3 135.3 25.9 21.7 681.6
Ccott 14.4 0.0 0.3 0.1 0.3 0.0 4.3 21.7
Cwhea 322.1 1.1 0.0 6.4 2.7 22.7 158.0 403.2
Cother 11064.7 697.9 105.5 1676.5 1839.0 3924.2 6099.2
Cind 4450.5 119.5 3635.9 68.3 6.4 1.4 1.4 2.7 259.4 2138.9 3383.8
Cser 35554.1 4916.2 7483.2 80.8 183.9 195.0 78.4 43.0 2246.2 4059.0 7444.1
Taxes and tariff Ytax 760.7
Atax 42.0 44.6 30.6 15.0 12.8 990.1 414.7
Tar
Vtax 34.0 34.0 9.8 8.3 192.1 159.9 289.6
Row 1.1 679.3
Total 17781.5 47474.2 62550.3 10308.2 13069.6 1845.0 954.2 1352.5 278.2 226.7 25701.5 21687.9 51038.3

Agric commodity Cind Cser Taxes and tariff Row Total

Csesa Csorg Ccott Cwhea Cother Ytax Atax Tar Vtax
Prod. factor Lab 17781.5
Cap 47474.2
Current acc. Hh 707.8 62550.3
Gov 760.7 1549.8 1188.0 727.8 10308.2
Capital ac. S-I 2110.4 13069.6
DSTK 1845.0
Agic. act. Asesa 954.2 954.2
Asorg 1352.5 1352.5
Acott 278.2 278.2
Awhea 226.7 226.7
Aother 25701.5 25701.5
Aind 21687.9 21687.9
Aser 51038.3 51038.3
Agic. comm Csesa 451.9 954.2
Csorg 6.0 1352.5
Ccott 237.2 278.2
Cwhea 916.2
Cother 814.9 26221.8
Cind 8250.4 22318.5
Cser 108.6 62392.6
Taxes and tariff Ytax 760.7
Atax 1549.8
Tar 19.9 11.2 66.9 1090.0 1188.0
Vtax 727.8
Row 669.7 509.1 563.6 10264.3 12687.1
Total 954.2 1352.5 278.2 916.2 26221.8 22318.5 62392.6 760.7 1549.8 1188.0 727.8 12687.1
Source: Authors’ calculations using data described in Section 4.

Please cite this article in press as: Elsheikh, O.E. et al., Economic impacts of changes in wheat’s import tariff on the Sudanese
economy. Journal of the Saudi Society of Agricultural Sciences (2013), http://dx.doi.org/10.1016/j.jssas.2013.08.002
Economic impacts of changes in wheat’s import tariff on the Sudanese economy 5

Table 2 Technical coefficients of the Sudan IOT for the year 2004.
Sesame Sorghum Cotton Wheat Other agric. Industry Service
Sesame 0.1000 0.0034 0.0000 0.0000 0.0000 0.0050 0.0022
Sorghum 0.0000 0.1000 0.0000 0.0000 0.0010 0.0010 0.0134
Cotton 0.0000 0.0000 0.0010 0.0001 0.0000 0.0002 0.0004
Wheat 0.0000 0.0020 0.0000 0.1000 0.0000 0.0073 0.0079
Other agric. 0.0000 0.0000 0.0000 0.0000 0.0716 0.1809 0.1195
Industry 0.0067 0.0010 0.0049 0.0120 0.0101 0.2163 0.4149
Service 0.1927 0.1442 0.2818 0.1898 0.0874 0.4105 0.9128
Source: Authors’ compilation.

given in Table 3. Import tariff is one of trade barriers; there-
fore its reduction is expected to create better opportunities
for free trade between countries, but at the cost of reduced wel-
fare of domestic producers of the grain. At the same time, im-
port tariff is a main source of government income, thus its
reduction will negatively affect government budget. A reduction
in wheat import tariff by 50% (partial liberalization) and 100%
(full liberalization) is assessed in scenario a and b. In the year
2004, wheat import tariff was 3%, and the Sudan’s commission
for joining the WTO envisaged raising it to 40% (a 1233% in-
crease). It worth mentioning here that the Sudan is still negoti-
ating to join the WTO; thus, not yet obliged to its rules and
regulations. Accordingly, simulations of increasing wheat im-
port tariff by 50%, 100% and 1200% are assessed in simulations
c, d and e. Scenario f is performed to measure by how much the
direct tax should be raised to compensate for government reve-
nue loss of full liberalization of wheat import tariff.
7. Results and discussion
commodities (Table 4). That may be attributed to limited
availability of foreign currency for imports.
The increased wheat imports could lower domestic prices,
resulting in a disincentive to produce wheat, and deviate re-
sources for the production of cotton, sesame, industrial and
services sectors; this would be reflected in their increased ex-
ports. On the other hand, the decrease in sorghum output
would result in a reduction of its consumption, associated with
increased consumption of wheat as a substitute food grain, and
perhaps, increased sorghum exports (Table 4).
The overall effect of reducing wheat import tariff is shown
in the form of improvement of the GDP, balance of trade, and
investment; whereas private consumption depicted a drop due,
mainly, to the reduction in imports and domestic output of
other agricultural commodities that overweighed the positive
impact of increased wheat (imports and) consumption.
The envisaged policy of increasing import tariff on wheat
(scenario c, d, and e) would result in a negative impact on
the economy, especially the effects of raising the tariff from
3% to 40%.

Changes in import tariff of wheat had broad inter-linkages 8. Conclusion

among all sectors in concern. As expected theoretically,
reduction of wheat import tariff would result in increased im-
ports and decreased domestic production; the expected vol-
umes of changes are given in Table 4. This will result in
improved food availability at low prices but with expanded
foreign currency spending. Conversely, increasing import tariff
on wheat would reduce its imports and encourage its domestic
production for self-sufficiency with less efficiency, and negative
impact on GDP. Increasing domestic production of wheat re-
quires investment in stabilizing and expanding the cultivated
area and yield, both of which have shown a high variability
over time, whereas average yield is very low compared with
the level attained internationally.
Reduction of wheat tariff (according to scenario a and b in
Table 3) has increased wheat imports; associated with a de-
crease of imports of other agricultural, industrial and service
Changes in import tariff of wheat had broad inter-linkages
among all sectors of the economy. Reduction of wheat tariff
has increased wheat imports; associated with a decrease of
the other imports. The increased wheat imports could lower
domestic price and, hence, reduce the resources directed to its
domestic production. The overall effect of reducing wheat im-
port tariff is an improvement of the GDP, balance of trade,
and investment. However, private consumption depicted a
drop due, mainly, to the reduction in imports and domestic out-
put of the other agricultural commodities. The negative impact
of the drop in domestic output on the total private consump-
tion level overweighs the positive impact of increased food im-
ports. Thus, the overall effect of decreased wheat imports on
private consumption is negative. Increasing import tariff on

Table 3 Scenario codes and definitions.

Scenario codes Scenario definitions: change of import tariff
Scen a 50% Reduction of wheat import tariff (partial liberalization)
Scen b 100% Reduction of wheat import tariff with flexible government savings
Scen c 50% Increase of wheat import tariff
Scen d 100% Increase of wheat import tariff with flexible government savings
Scen e 1200% Increase of wheat import tariff
Scen f 100% Reduction of wheat import tariff with fixed government savings

Please cite this article in press as: Elsheikh, O.E. et al., Economic impacts of changes in wheat’s import tariff on the Sudanese
economy. Journal of the Saudi Society of Agricultural Sciences (2013), http://dx.doi.org/10.1016/j.jssas.2013.08.002
6 O.E. Elsheikh et al.

Table 4 Impact of import tariff change on the economy.

Sectors Base value (million SDG) Percentage change from the base
Scen a Scen b Scen c Scen d Scen e
Macroeconomic indicators
Private consumption 52,053 0.0001 0.0004 0.00002 0.0001 0.023
Investment 13,070 0.0070 0.0140 0.0070 0.0140 0.169
GDP 68,721 0.0010 0.0030 0.0010 0.0030 0.540
Balance of trade 3326 0.0015 0.0030 0.0014 0.0028 0.026
Imports
Wheat 689.5 0.356 0.722 0.347 0.686 6.465
Total 13194.7 0.009 0.018 0.009 0.017 0.166
Exports
Sorghum 6 0.019 0.038 0.018 0.035 0.271
Wheat 0 0.000 0.000 0.000 0.000 0.000
Total 9869 0.013 0.025 0.012 0.024 0.230
Domestic output
Sorghum 1353 0.0012 0.0025 0.0012 0.0024 0.023
Wheat 227 0.1949 0.3914 0.1932 0.3847 4.239
Total 101239 0.0003 0.0006 0.0003 0.0006 0.007
Source: Model results.

wheat would result in a negative impact on the economy. The Organization Affairs, Khartoum, for their contribution and
results of the study conform to the relevant economic theories. valuable comments and information.
Domestic production of wheat falls short of satisfying the
local demand, and has shown a high variability over time. Pro- Appendix A. Mathematical model statement
duction variability is due to the high variability of both the har-
vested area and yield. In addition, wheat consumption has
The model equations are classified into four blocks: prices,
shown an upward trend over time. The convenient and fast
production and trade block, institutions block and system
food industry relies mainly on wheat, a matter that accelerated
constraint block.
the shifts of the diet away from traditional food grains and
items. Thus, encouraging innovation and development of con-
venient and fast food industry using the traditional food, which A.1. Price block
is produced domestically, is recommended to curb wheat
consumption. It is also recommended that the government
PMc ¼ pwmc  ð1 þ tmc Þ EXR
supports investment in horizontal and vertical expansion of
irrigated agriculture for a stable production of wheat and other PEc ¼ pwmc  ð1  tec Þ EXR
food cereals and products. In addition, it is of vital importance PXc ¼ ðPDSc  QDc þ PEc  QEc Þ=QXc
X
to remedy the various predicaments facing the agricultural PINTAa ¼ PQc  icaca
sector, and remove the direct and indirect taxes on its inputs, X
CPI ¼ PQc  cwtsc
output, and services. This is especially relevant because the pro-
cess of openness to international markets and integration of the
Sudanese economy in the global economy requires important A.2. Production and trade block
processes to enhance compatibility of the production and
distribution systems with the international standards.
a 1=qa a a
QAa ¼ aaa  ðdaa  QVAq
a
a þ ð1  da Þ QINTAqa Þ
a a

Acknowledgements For the CES function

The research team would like to thank the Economic and Social r ¼ 1=1 þ qWFF  WFDISTfa
X qma pma 1
Research Bureau for their financial and all other kinds of ¼ PVAa ð1  tmaa Þ QVAa  dma  a 1  ma 
fa QFfa Þ dfa QFfa a QQc
support to the study. Our thanks also extend to the Agricultural f2F
Economics Department of the College of Food and Agricul- q q
q
q

tural Sciences at King Saud University, for providing the favor- ¼ aqc  ðdqc  QMp
c
c
þ ð1  dqc Þ QDC c Þ1=qc QMc  QDc
q
ite environment and other facilities for gathering additional ¼ ðPDDc =PMc ðdqc =1 
 dqc ÞÞ1=1þpc QXc
data and making further analysis. Our profound gratitude is T qt t
also due to the Central Bureau of Statistics, Central Bank of ¼ atc  ðdtc  QEpc c þ ð1  dtc Þ QDC c Þ1=qc QEc  QDc
the Sudan, and the Ministry of Finance and National Economy ¼ ðPEc =PDSc  ð1  dtc =dtc ÞÞ1=pc 1
t

for providing the required data and information. Special

thanks are due to the National Secretariat for the World Trade For CET function

Please cite this article in press as: Elsheikh, O.E. et al., Economic impacts of changes in wheat’s import tariff on the Sudanese
economy. Journal of the Saudi Society of Agricultural Sciences (2013), http://dx.doi.org/10.1016/j.jssas.2013.08.002
Economic impacts of changes in wheat’s import tariff on the Sudanese economy 7

X ¼ 1=ð1 þ qÞ References

Central Bank of Sudan, 2010. Annual Reports and the National

A.3. Institutional block
Accounts Reports of the Period from 2004 to 2007. Central Bank of
X Sudan, Khartoum, Sudan.
YFf ¼ WFf  WFDISTfa  QFfa YIFif
Central Bureau of Statistics, 2008. Sudan in Figures, 2002–2006,
¼ shifif  ðð1  tff Þ YFf  trnsfrrowf  EXRÞYIh Ministry of Council of Ministers. Central Bureau of Statistics,
X Khartoum, Sudan.
¼ YIFhf þ trnsfhgom þ trnsfrhrow  EXREHh Elbushra, A.A., 2007. Computable General Equilibrium Model of
X
¼ ð1  shiiih Þ ð1  MPSi Þ ð1  TINSh Þ YIh YG Sudan Economy with Special Emphasis on Agricultural Sector.
X X X Faculty of Agriculture, University of Khartoum, Sudan, Unpub-
¼ TINSi  YIi þ tff  YFf þ tmaa  PVAa  QVAa lished Ph.D. thesis.
X X Elsheikh, O.E., 2001. Agricultural Development and Food Security in
þ taa  PAa  QAa þ tmc  pwmc  QMc  EXR the Sudan: An Econometric Analysis of Sorghum, Wheat, and
X X Millet Markets. Dept. of Agricultural Economics, The University
þ tqa  PQa  QQa þ YIFgomf þ transfgomrow  EXREG
X X of Tokyo, Japan, Unpublished Ph.D. thesis.
¼ PQc  QGc þ trnsfrigom þ GSAV FAO, (2012). FAO Statistics data base (FAOSTAT); URL: http://
faostat3.fao.org/home/index.html; Access date: 12 December 2012.
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2002. A Standard Computable General Equilibrium Model in
A.4. System constraint block (model closures) GAMS. Microcomputers in Policy Research 5. International Food
X X X Policy Research Institute, Washington, D.C.
QFfa ¼ QFSf pwmc  QMc þ trnsfrrowf Ministry of Agriculture and Forestry, 2008. Department of Agricul-
X
¼ pwec  QEc þ trnsfrirow þ FSAVS ¼ IS tural Economics, General Administration for Statistics and Infor-
X mation, Databases of Price and Production of Agricultural

¼ Si þ Sg þ Sf EXR Commodities in the Sudan. Ministry of Agriculture and Forestry,
P Khartoum.
  
So:P MPSP i ð1  TINSi Þ YIi þ GSAV þ EXR FSAV Ministry of Finance and National Economy, 2006. The Performance
¼ PQc  QINVc þ PQc  qdstc of Sudan Economy during the Period 2000–2005. Ministry of
Finance and National Economy, Khartoum, Sudan (In Arabic).
where:

ta(A) rate of tax on producer gross output value QXACac quantity of output of commodity c from activity a
te(C) rate of tax on exports PMc import world price (domestic currency)
tf(F) rate of direct tax on factors TABS total nominal absorption
tm(C) rate of import tariff PQc composite commodity price
tq(C) rate of sales tax trnsfhgov transfers from domestic government institution
to household institution
tva(A) rate of value-added tax trnsfhrov transfers from domestic rest of the world
to household institution
EG government expenditures PVAa value-added price
QQc Quantity of exports WFF economy-wide factor wage
EHh consumption spending for household PXc aggregate producer price for commodity
QFfa quantity demanded of factor f from activity a YIFif transfer of income to domestic institution I from factor f
EXR exchange rate (LCU per unit of FCU) PXACac producer price of commodity c for activity a
QG government consumption demand for commodity YG government revenue
QHch Quantity consumed of commodity c by household h QAa quantity (level) of activity a
GSAV government savings YI income of domestic non-government institution
QINTac Quantity of commodity c as intermediate QDc quantity sold domestically of domestic output
input to activity a
QINVc Quantity of investment demand for commodity FSAV foreign savings (FCU)
MPSi marginal propensity to save for household TINSh direct tax rate for domestic institution i or factor f
QMc Quantity of imports of commodity WFDISTfa wage distortion factor for factor f in activity a
PAa Activity price (unit gross revenue) IADJ investment adjustment factor
QQc Quantity of goods supplied to domestic market pwmc world price of import (in hard currency)
(composite supply)
PDDc Demand price for commodity produced pwec world price of export (in hard currency)
and sold domestically
PDSc supply price for commodity produced QXACac quantity of output of commodity c from
and sold domestically activity a
QXc aggregated quantity of domestic output

Please cite this article in press as: Elsheikh, O.E. et al., Economic impacts of changes in wheat’s import tariff on the Sudanese
economy. Journal of the Saudi Society of Agricultural Sciences (2013), http://dx.doi.org/10.1016/j.jssas.2013.08.002
 8 O.E. Elsheikh et al.

Ministry of Finance and National Economy, 2009. The Economic Sudan Customs Authority, 2008. Annual Reports (Various Issues).
Digest (Various Issues), General Administration of Macroeco- Sudan Customs Authority, Khartoum, Sudan, Unpublished Ph.D.
nomic Policies and Programs. Ministry of Finance and National thesis.
Economy, Khartoum, Sudan.

Please cite this article in press as: Elsheikh, O.E. et al., Economic impacts of changes in wheat’s import tariff on the Sudanese
economy. Journal of the Saudi Society of Agricultural Sciences (2013), http://dx.doi.org/10.1016/j.jssas.2013.08.002
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