1. General Equilibrium Effects of Price Distortions on Global Markets, Farm Incomes and Welfare
- Author
-
Valenzuela, Ernesto, van der Mensbrugghe, Dominique, and Anderson, Kym
- Subjects
AGRICULTURAL TRADE POLICIES ,EXPORT SUBSIDIES ,REAL INCOME ,TERMS OF TRADE EFFECTS ,VALUE ADDED ,BEVERAGES ,WORLD TRADE ,FOOD PRICE ,COMMODITIES ,AGRICULTURAL PROTECTION ,FOOD POLICY ,AGRICULTURAL LAND ,TRADE DISTORTIONS ,FRUITS ,UNEMPLOYMENT ,EXPORT GROWTH ,FARM INCOME ,TRADE NEGOTIATIONS ,BANANAS ,FARM INCOMES ,DAIRY PRODUCTS ,TARIFF RATE ,TRADE PREFERENCES ,CONSUMER PRICE INDEX ,PRIMARY PRODUCTS ,TRADE AGREEMENTS ,AGRICULTURAL IMPORTS ,FARMERS ,CONSTANT RETURNS TO SCALE ,SKILLED WORKERS ,IMPORT TARIFF ,EMERGING ECONOMIES ,AGRICULTURAL INDUSTRIES ,SUGAR ,ECONOMIC SECTORS ,GLOBAL OUTPUT ,GLOBAL ECONOMY ,FARM PRODUCTION ,DOMESTIC MARKETS ,IMPORT PROTECTION ,VEGETABLES ,RAW MILK ,BORDER MEASURES ,AGRICULTURAL POLICIES ,PRICE INDEX ,EXPORT ,FOOD PRODUCTION ,AGREEMENT ON AGRICULTURE ,EQUILIBRIUM ,CAPITAL OWNERS ,IMPORT BARRIERS ,MULTILATERAL TRADE ,VEGETABLE OILS ,AGRICULTURAL TARIFF ,WEALTH ,PREFERENTIAL TRADE AGREEMENTS ,PUBLIC GOOD ,CONSUMERS ,AGRICULTURAL PRICE SUPPORTS ,WTO ,GDP ,FOOD POLICY REFORM ,TRADE BALANCE ,BASE YEAR ,POLITICAL ECONOMY ,TAXATION ,ECONOMIC IMPLICATIONS ,EXPORTS ,UNSKILLED LABOR ,GENERAL EQUILIBRIUM MODEL ,CURRENT ACCOUNT BALANCE ,EXCHANGE RATE ,AGRICULTURAL PRICES ,PRODUCTION STRUCTURES ,HOUSEHOLDS ,PREFERENTIAL ACCESS ,MULTILATERAL TRADE NEGOTIATIONS ,EXPORT SUBSIDY ,PRICE FLUCTUATIONS ,FARM PRODUCTS ,BANANA ,AGRICULTURAL GOODS ,FARM POLICIES ,BENCHMARK DATA ,WHEAT ,URUGUAY ROUND ,AGRICULTURAL ECONOMY ,IMPORT COMPETITION ,DEVELOPING COUNTRIES ,GLOBAL MARKETS ,IMPORT PRICES ,TARIFF PROTECTION ,CROPS ,FOREIGN INVESTMENT ,COMPARATIVE ADVANTAGE ,TRADE TAXES ,SHEEP MEAT ,TERMS OF TRADE EFFECT ,FACTORS OF PRODUCTION ,FINANCIAL FLOWS ,VOLATILITY ,TRADE LIBERALIZATION ,MARKET ACCESS ,ADVERSE EFFECT ,DOMESTIC PRODUCTION ,TAX RATES ,AGRICULTURAL TARIFFS ,TAX ,FARM SECTOR ,RATE QUOTAS ,GENERAL EQUILIBRIUM ,DEVELOPING COUNTRY ,AGRICULTURAL PROTECTIONISM ,BEET ,FARM ,TARIFF BARRIERS ,TARIFF LINE ,MILK ,AGRICULTURAL VALUE ,TERMS OF TRADE ,FOOD OUTPUT ,BEEF ,AGRICULTURAL PRODUCTION ,FOOD INDUSTRIES ,FOOD PRICES ,IMPORT TARIFFS ,AGRICULTURAL MARKETS ,COTTON ,AGRICULTURAL TRADE ,GRAIN PRODUCTION ,AGRICULTURAL EXPORTS ,EXPORT TAX ,TRADE POLICY ,GRAINS ,WORLD TRADE ORGANIZATION ,COUNTRY MARKETS ,PROCESSED FOODS ,DEVELOPMENT ECONOMICS ,AGRICULTURAL PRICE ,FREE TRADE IN GOODS ,EXPORT PRICES ,FARMS ,INTERNATIONAL MARKETS ,WAGES ,FOOD IMPORTS ,NATIONAL INCOME ,NATIONAL ECONOMY ,COST OF CAPITAL ,TARIFF STRUCTURE ,EXPORT PRICE ,FATS ,TRADE POLICY REFORMS ,AGRICULTURAL POLICY ,MANUFACTURING INDUSTRIES ,INEQUALITY ,DEVELOPED COUNTRIES ,FREE ACCESS ,FREE TRADE ,DEVELOPING ECONOMIES ,AGRICULTURAL INCENTIVES ,TRADE REFORM ,IMPORT INCREASES ,INTENSIVE FARMING ,INTERNATIONAL ECONOMICS ,AGRICULTURAL EXPORT ,OILS AND FATS ,GLOBAL TRADE ,MEAT ,BENCHMARK ,PADDY ,GLOBAL ECONOMIC PROSPECTS ,FREE MARKETS ,MILK PRODUCTS ,TRANSITION ECONOMIES ,TRADE FLOWS ,TREASURY ,DAIRY ,BILATERAL TRADE ,AGRICULTURAL OUTPUT ,GRAIN ,EXPORT SUPPORT ,SUGAR CANE ,FOOD MARKETS ,TARIFF RATE QUOTAS ,PREFERENTIAL TRADE ,WORLD ECONOMY ,AGRICULTURAL PRODUCTS ,MEAT PRODUCTS ,ACCESSION NEGOTIATIONS ,FOOD PRODUCTS ,LIVESTOCK ,PRICE DISTORTIONS ,ITC ,NON-TARIFF BARRIERS ,DEVELOPING COUNTRY ECONOMIES ,SAVINGS ,IFPRI ,VALUE OF OUTPUT ,COMPARATIVE ADVANTAGES ,EXPORT TAXES - Abstract
Earnings from farming in many developing countries have been depressed by a pro-urban bias in own-country policies as well as by governments of richer countries favoring their farmers with import barriers and subsidies. Both sets of policies, which reduce national and global economic welfare and contribute to global inequality and poverty, have been undergoing reform since the 1980s. Using the linkage model of the global economy and modifications to the pre-release of version 7 of the Global Trade Analysis Project (GTAP) protection database for 2004, this paper seeks to compare the effect of those reforms to date with those that would come from removing remaining agricultural and trade policies. Two sets of results are thus presented: one showing the effects of policy reforms between 1980-84 and 2004, the other showing what the removal of remaining distortions as of 2004 could be. Both sets of results indicate improvements in the real value of agricultural output and exports, the real returns to farm land and unskilled labor, and real net farm incomes in most developing country regions despite the adverse effect on the international terms of trade for some developing countries that are net food importers or are enjoying preferential access to agricultural markets of high-income countries. Landowners in those high-income countries still offering their farmers price supports could readily afford to compensate them from the benefits of removing remaining agricultural protectionism.
- Published
- 2008