General Equilibrium Effects of Price Distortions on Global Markets, Farm Incomes and Welfare

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.

Bibliographic Details

Main Authors:	Valenzuela, Ernesto, van der Mensbrugghe, Dominique, Anderson, Kym
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2008-09
Subjects:	ACCESSION NEGOTIATIONS, ADVERSE EFFECT, AGREEMENT ON AGRICULTURE, AGRICULTURAL ECONOMY, AGRICULTURAL EXPORT, AGRICULTURAL EXPORTS, AGRICULTURAL GOODS, AGRICULTURAL IMPORTS, AGRICULTURAL INCENTIVES, AGRICULTURAL INDUSTRIES, AGRICULTURAL LAND, AGRICULTURAL MARKETS, AGRICULTURAL OUTPUT, AGRICULTURAL POLICIES, AGRICULTURAL POLICY, AGRICULTURAL PRICE, AGRICULTURAL PRICE SUPPORTS, AGRICULTURAL PRICES, AGRICULTURAL PRODUCTION, AGRICULTURAL PRODUCTS, AGRICULTURAL PROTECTION, AGRICULTURAL PROTECTIONISM, AGRICULTURAL TARIFF, AGRICULTURAL TARIFFS, AGRICULTURAL TRADE, AGRICULTURAL TRADE POLICIES, AGRICULTURAL VALUE, BANANA, BANANAS, BASE YEAR, BEEF, BEET, BENCHMARK, BENCHMARK DATA, BEVERAGES, BILATERAL TRADE, BORDER MEASURES, CAPITAL OWNERS, COMMODITIES, COMPARATIVE ADVANTAGE, COMPARATIVE ADVANTAGES, CONSTANT RETURNS TO SCALE, CONSUMER PRICE INDEX, CONSUMERS, COST OF CAPITAL, COTTON, COUNTRY MARKETS, CROPS, CURRENT ACCOUNT BALANCE, DAIRY, DAIRY PRODUCTS, DEVELOPED COUNTRIES, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPING COUNTRY ECONOMIES, DEVELOPING ECONOMIES, DEVELOPMENT ECONOMICS, DOMESTIC MARKETS, DOMESTIC PRODUCTION, ECONOMIC IMPLICATIONS, ECONOMIC SECTORS, EMERGING ECONOMIES, EQUILIBRIUM, EXCHANGE RATE, EXPORT, EXPORT GROWTH, EXPORT PRICE, EXPORT PRICES, EXPORT SUBSIDIES, EXPORT SUBSIDY, EXPORT SUPPORT, EXPORT TAX, EXPORT TAXES, EXPORTS, FACTORS OF PRODUCTION, FARM, FARM INCOME, FARM INCOMES, FARM POLICIES, FARM PRODUCTION, FARM PRODUCTS, FARM SECTOR, FARMERS, FARMS, FATS, FINANCIAL FLOWS, FOOD IMPORTS, FOOD INDUSTRIES, FOOD MARKETS, FOOD OUTPUT, FOOD POLICY, FOOD POLICY REFORM, FOOD PRICE, FOOD PRICES, FOOD PRODUCTION, FOOD PRODUCTS, FOREIGN INVESTMENT, FREE ACCESS, FREE MARKETS, FREE TRADE, FREE TRADE IN GOODS, FRUITS, GDP, GENERAL EQUILIBRIUM, GENERAL EQUILIBRIUM MODEL, GLOBAL ECONOMIC PROSPECTS, GLOBAL ECONOMY, GLOBAL MARKETS, GLOBAL OUTPUT, GLOBAL TRADE, GRAIN, GRAIN PRODUCTION, GRAINS, HOUSEHOLDS, IFPRI, IMPORT BARRIERS, IMPORT COMPETITION, IMPORT INCREASES, IMPORT PRICES, IMPORT PROTECTION, IMPORT TARIFF, IMPORT TARIFFS, INEQUALITY, INTENSIVE FARMING, INTERNATIONAL ECONOMICS, INTERNATIONAL MARKETS, ITC, LIVESTOCK, MANUFACTURING INDUSTRIES, MARKET ACCESS, MEAT, MEAT PRODUCTS, MILK, MILK PRODUCTS, MULTILATERAL TRADE, MULTILATERAL TRADE NEGOTIATIONS, NATIONAL ECONOMY, NATIONAL INCOME, NON-TARIFF BARRIERS, OILS AND FATS, PADDY, POLITICAL ECONOMY, PREFERENTIAL ACCESS, PREFERENTIAL TRADE, PREFERENTIAL TRADE AGREEMENTS, PRICE DISTORTIONS, PRICE FLUCTUATIONS, PRICE INDEX, PRIMARY PRODUCTS, PROCESSED FOODS, PRODUCTION STRUCTURES, PUBLIC GOOD, RATE QUOTAS, RAW MILK, REAL INCOME, SAVINGS, SHEEP MEAT, SKILLED WORKERS, SUGAR, SUGAR CANE, TARIFF BARRIERS, TARIFF LINE, TARIFF PROTECTION, TARIFF RATE, TARIFF RATE QUOTAS, TARIFF STRUCTURE, TAX, TAX RATES, TAXATION, TERMS OF TRADE, TERMS OF TRADE EFFECT, TERMS OF TRADE EFFECTS, TRADE AGREEMENTS, TRADE BALANCE, TRADE DISTORTIONS, TRADE FLOWS, TRADE LIBERALIZATION, TRADE NEGOTIATIONS, TRADE POLICY, TRADE POLICY REFORMS, TRADE PREFERENCES, TRADE REFORM, TRADE TAXES, TRANSITION ECONOMIES, TREASURY, UNEMPLOYMENT, UNSKILLED LABOR, URUGUAY ROUND, VALUE ADDED, VALUE OF OUTPUT, VEGETABLE OILS, VEGETABLES, VOLATILITY, WAGES, WEALTH, WHEAT, WORLD ECONOMY, WORLD TRADE, WORLD TRADE ORGANIZATION, WTO,
Online Access:	http://documents.worldbank.org/curated/en/945721468157178036/General-equilibrium-effects-of-price-distortions-on-global-markets-farm-incomes-and-welfare http://hdl.handle.net/10986/28194
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