Welfare Impacts of Import Controls in Botswana’s Horticulture

Abstract

An import demand equation is estimated to capture the impact of import controls on horticultural imports (oranges and potatoes) in Botswana. Elasticity esti mates are then employed to endogenously compute Nominal Protection Rates (NPRs) and to conduct welfare simulations. Model-generated NPRs are recorded at 55 and 118 percent for oranges and potatoes, respectively. Consumer losses from the policy regime have risen over time for both commodities. However, producer gains declined in the case of oranges and marginally rose in the case of potatoes. Quota rents have expanded under both cases, since imports have risen much faster than domestic production over time. The net loss in social welfare has also risen over time, implying that import controls have become increasingly burdensome over time.