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This paper explores the interrelationship between poverty, risk, and deforestation by small farmers in the low-income tropics. A nonseparable household model reveals how exogenous shocks to the mean or variance of a food price distribution might affect peasants' incentives to clear forest. The resulting links between food price policy, farmer behavior, and deforestation offer an innovative explanation of the vicious cycle of peasant immiserization and tropical deforestation. An intriguing, testable hypothesis also emerges: that market-oriented reforms that increase the mean and variance of food prices may inadvertently stimulate deforestation in economies in which a sizable proportion of farmers are net buyers.

Reforms in recent decades have sharply reduced the distortions affecting agriculture in developing countries, particularly by cuts to agricultural export taxes and by some reductions in government assistance to agriculture in high-income countries, but international trade in farm products continues to be far more distorted than trade in nonfarm goods. This paper summarizes a series of empirical studies that focus on the effects of the remaining distortions to world merchandise trade for poverty and inequality, especially in developing countries. To obtain different insights into the various impacts, two global studies are undertaken using the World Bank's Linkage model, one multi-country study uses the Global Trade Analysis Project (GTAP) model, and ten country case studies are also included, each using a national economy-wide model. The Linkage model results suggest that liberalization will reduce international inequality, largely by boosting farm incomes and raising real wages for unskilled workers in developing countries, and will reduce the number of poor people worldwide by 3 percent. The analysis based on the GTAP model for a sample of 15 countries, and the ten stand-alone national case studies, all point to larger reductions in poverty, especially if only the non-poor are subjected to increased income taxation to compensate for the loss of trade tax revenue.

South Africa has rapidly reduced trade barriers since the end of Apartheid, yet agricultural production and exports have remained sluggish. Also, poverty and unemployment have risen and become increasingly concentrated in rural areas. This paper examines the extent to which remaining price distortions, both domestic and foreign, are contributing to the underperformance of the agricultural sector vis-a-vis the rest of the economy. The author draws on a computable general equilibrium (CGE) and micro-simulation model of South Africa that is linked to the results of a global trade model. This framework is used to examine the effects of eliminating global and domestic price distortions. Model results indicate that South Africa's agricultural sector currently benefits from global price distortions, and that removing these will create more jobs for lower-skilled workers, thereby reducing income inequality and poverty. The author also fined that South Africa's own policies are biased against agriculture and that removing domestic distortions will raise agricultural production. Job losses in nonagricultural sectors will be outweighed by job creation in agriculture, such that overall employment rises and poverty falls. Overall, the findings suggest that South Africa's own policies are more damaging to its welfare, poverty and inequality than distortionary policies in the rest of the world. Existing national price distortions may thus explain some of the poor performance of South Africa's agricultural sector and rural development.

This paper assesses the potential impacts of the removal of agricultural and other trade distortions using a newly developed dataset and methodological approach for evaluating the global poverty and inequality effects of policy reforms. It finds that liberalization of agriculture will increase global extreme poverty (US$1 a day) slightly and by almost 1 percent if other goods trade is also liberalized; but the number of people living on less than $2 a day will fall by almost 1 percent. Beneath these small aggregate changes, most countries witness a substantial reduction in poverty while South Asia where half of the world's poor reside will experience an increase in extreme (but not moderate) poverty incidence due to high rates of protection afforded to its unskilled labor-intensive agricultural sectors. The distributional changes also are projected to be mild, but again exhibit a strong regional pattern: inequality falls in Latin America, which is characterized by high initial inequality, and rises in South Asia, has relatively low income inequality.

A general equilibrium modeling approach is used to estimate the effects within Indonesia of unilateral and global trade liberalization, including effects on poverty incidence. It is concluded that global reform of trade policy in all commodities is a significant potential source of poverty reduction for Indonesia. The poor rural and urban have a strong interest in global trade policy reform. If Indonesia were to liberalize unilaterally, poverty incidence also will decline but the effect is small. If liberalization is confined to agricultural products, the effects are similar but the declines in poverty incidence within Indonesia are much smaller.

Using recent estimates of industry assistance rates, the effects of trade liberalization in the rest of the world and in Pakistan alone are analyzed using a global and a Pakistan computable general equilibrium (CGE) model under two tax replacement schemes: a direct income tax and an indirect tax replacement. The results indicate that the distributional and poverty effects in Pakistan of a unilateral liberalization of all traded goods are significantly greater than the effects of trade liberalization in the rest of the world. There is relatively higher increase in real income and larger decline in poverty incidence in poor households both in rural and urban areas. The effects of agricultural trade liberalization alone in both the rest of the world and in Pakistan are considerably smaller than those from trade liberalization involving all goods. In both the agricultural and all-goods trade liberalization scenarios involving direct income tax replacement, real household income is raised and the poverty incidence is lowered at varied rates across all household groups except for the urban non-poor. When an indirect tax replacement is used, where the burden of replacing tariff revenue is shared by all household groups depending on their consumption structure, there is reduction in household income for most of the groups and less reduction of poverty.

A general equilibrium modeling approach is used to estimate the effects within Thailand of unilateral and global trade liberalization, including effects on poverty incidence. It is concluded that across the board trade liberalization is poverty-reducing within Thailand, whether other countries participate in the liberalization or not. This poverty reduction occurs among both farm and non-farm households and this qualitative outcome is not dependent on the particular poverty line used in the analysis. Liberalization in agricultural products alone raises poverty incidence among farm households, while reducing it slightly among non-farm households.

Capitalizing on the most recent estimates of agricultural price distortions in China and in other countries, this paper assesses the economic and poverty impact of global and domestic trade reform in China. It also examines the interplay between the trade reforms and factor market reforms aimed at improving the allocation of labor within the Chinese economy. The results suggest that trade reforms in the rest of the world, land reform and hukou reform all serve to reduce poverty, while unilateral trade reforms result in a small poverty increase. Agricultural distortions are important factors in determining the distributional and poverty effects of trade reform packages, although their impacts on aggregate trade and welfare appear to be small. A comprehensive reform package which bundles the reforms in commodity and factor markets together may benefit all broad household groups in China.

The Middle East and North Africa (MNA) region is one of the most water scarce regions in the world, with a regional annual average of 1,200 cubic meters per person (world average is close to 7,000). Water, not land, is now the limiting factor for improving agricultural production in the MNA region. Maximizing water productivity, not yield per unit of land, is, therefore, a better strategy for on-farm water management under such conditions. Raising water productivity requires integrated attention to improving technical, agronomic and management measures. Water User Associations greatly facilitate the implementation of integrated measures. Using satellite remote sensing technologies, planners and policy makers can make more effective decisions to ensure a stable supply of water for food and the environment. All MNA countries with the exception of Morocco are net importers of agricultural products. The greatest benefits for MNA will be generated by comprehensive domestic agricultural reforms, in tandem with higher market access in European and world markets. MNA governments will face issues relating to timing and sequencing of reforms. Given its current resources endowments and growth prospects, it is in the best interest for MNA countries to push towards proceeding with the liberalization of markets in developed countries. At the same time, they could ask for some sort of compensation for higher prices and lost preferences in the form of non-trade distorting financial schemes or even cash grants for those countries facing significant losses as a result. Countries will have to pay a particular attention to the implications of this gradual approach for government revenues, adjustment costs and credibility of reforms.

Document de recherche - DR LEO 2006-10; The aim of this paper is to study the relation between governance and migration in the case of a South-North partnership, using the tools of economic analysis. We will analyse both the governance of migratory phenomenon (i.e. the control of South-North migration, as much as the control of rural-urban or internal migration) and the consequences of internal and/or international migrations on a broader problem which is the compatibility of economic liberalization, political stability and other objectives which are pursued by governments (such as avoiding the deterioration of social capital, or a social dumping). In a first section we develop an original Harris-Todaro model in order to resolve the question of the compatibility of different policies. In a second section we will consider four possibilities to enrich the Harris-Todaro model, which are to take into account the cost of migration, the attitude toward risk, the relative deprivation hypothesis, and the relation between migration and social capital. In each case, our attention will be focused on the policy recommendations we can formulate as a result of every approach.

The aim of this paper is to study the relation between governance and migration in the case of a South-North partnership, using the tools of economic analysis. We will analyse both the governance of migratory phenomenon (i.e. the control of South-North migration, as much as the control of rural-urban or internal migration) and the consequences of internal and/or international migrations on a broader problem which is the compatibility of economic liberalization, political stability and other objectives which are pursued by governments (such as avoiding the deterioration of social capital, or a social dumping). In a first section we develop an original Harris-Todaro model in order to resolve the question of the compatibility of different policies. In a second section we will consider four possibilities to enrich the Harris-Todaro model, which are to take into account the cost of migration, the attitude toward risk, the relative deprivation hypothesis, and the relation between migration and social capital. In each case, our attention will be focused on the policy recommendations we can formulate as a result of every approach.

The paper analyzes how various preferential trading arrangements deal with agriculture liberalization and examines a few case studies highlighting the provisions on agriculture. It assesses the effect of preferential trade agreements on agriculture trade flows in the case of ASEAN. It finds that while the tariff reduction on all goods, including agriculture, in ASEAN provides a marked advantage from the MFN tariff rates, intra-ASEAN agriculture trade have not been all that significant. Most of the growth in the intra-ASEAN trade had come from trade in industry; and if total agriculture trade had expanded, much of it was due to trade outside the region. The paper argues that AFTA, by original design, had not really been made to boost intraregional agriculture trade, but rather to facilitate the interindustry trade arising out of the vertically integrated network of manufacturing transnational corporations.

In this research an effort is made to point out some of the basic aspects on the discussion and extension of potential agreements in the free agricultural trade chapter from a quantitative optics. In order to support policy recommendations on how this liberalization could be made and which could be the effects for the Moroccan economy,a simulation is developed. The analysis allows, on the one hand, to determine which would be the increases in exports and imports of Morocco and, on the other hand, to incorporate Input-Output Tables and a dynamic model of structural change in the Moroccan economy, derivative of the technological development and the changes in the way of production of that country.