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Distributional effects of WTO agricultural reforms in rich and poor countries

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Author Info
Thomas W. Hertel
Roman Keeney
Maros Ivanic
L. Alan Winters

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Abstract

"Rich countries' agricultural trade policies are the battleground on which the future of the WTO's troubled Doha Round will be determined. Subject to widespread criticism, they nonetheless appear to be almost immune to serious reform, and one of their most common defences is that they protect poor farmers. Our findings reject this claim. The analysis conducted here uses detailed data on farm incomes to show that major commodity programmes are highly regressive in the US, and that the only serious losses under trade reform are among large, wealthy farmers in a few heavily protected sub-sectors. In contrast, analysis using household data from 15 developing countries indicates that reforming rich countries' agricultural trade policies would lift large numbers of developing country farm households out of poverty. In the majority of cases these gains are not outweighed by the poverty-increasing effects of higher food prices among other households. Agricultural reforms that appear feasible, even under an ambitious Doha Round, achieve only a fraction of the benefits for developing countries that full liberalization promises, but protect the wealthiest US farms from most of the rigors of adjustment. Finally, the analysis conducted here indicates that maximal trade-led poverty reductions occur when developing countries participate more fully in agricultural trade liberalization." Copyright (c) CEPR, CES, MSH, 2007.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0327.2007.00180.x
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Publisher Info
Article provided by CEPR, CES, MSH in its journal Economic Policy.

Volume (Year): 22 (2007)
Issue (Month): (04)
Pages: 289-337
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Handle: RePEc:bla:ecpoli:v:22:y:2007:i::p:289-337

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Harrison, Glenn W. & Rutherford, Thomas F. & Tarr,David & Gurgel, Angelo, 2003. "Regional, multilateral, and unilateral trade policies on MERCOSUR for growth and poverty reduction in Brazil," Policy Research Working Paper Series 3051, The World Bank. [Downloadable!]
  2. Thomas Hertel & Jeffrey Reimer, 2005. "Predicting the poverty impacts of trade reform," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 14(4), pages 377-405, December. [Downloadable!] (restricted)
    Other versions:
  3. Rimmer, Maureen T & Powell, Alan A, 1996. "An Implicitly Additive Demand System," Applied Economics, Taylor and Francis Journals, vol. 28(12), pages 1613-22, December. [Downloadable!] (restricted)
  4. Christian Arnault Emini & John Cockburn & Bernard Decaluwe, 2005. "The Poverty Impacts of the Doha Round in Cameroon: the Role of Tax Policy," Cahiers de recherche MPIA 2005-04, PEP-MPIA. [Downloadable!]
    Other versions:
  5. Jeffrey Reimer & Thomas Hertel, 2004. "Estimation of International Demand Behaviour for Use with Input-Output Based Data," Economic Systems Research, Taylor and Francis Journals, vol. 16(4), pages 347-366, January. [Downloadable!] (restricted)
  6. Cranfield, J. A. L. & Preckel, Paul V. & Eales, James S. & Hertel, Thomas W., 2004. "Simultaneous estimation of an implicit directly additive demand system and the distribution of expenditure--an application of maximum entropy," Economic Modelling, Elsevier, vol. 21(2), pages 361-385, March. [Downloadable!] (restricted)
  7. Shaohua Chen & Martin Ravallion, 2004. "Welfare Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, Oxford University Press, vol. 18(1), pages 29-57.
  8. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September. [Downloadable!] (restricted)
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  9. Joseph Francois & Hans van Meijl & Frank van Tongeren, 2005. "Trade liberalization in the Doha Development Round," Economic Policy, CEPR, CES, MSH, vol. 20(42), pages 349-391, 04. [Downloadable!] (restricted)
  10. Anderson, Kym, 1995. "Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 43(2), pages 401-23, January.
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  11. Kym Anderson & Will Martin, 2005. "Agricultural Trade Reform and the Doha Development Agenda," The World Economy, Blackwell Publishing, vol. 28(9), pages 1301-1327, 09. [Downloadable!] (restricted)
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  12. L. Alan Winters & Neil McCulloch & Andrew McKay, 2004. "Trade Liberalization and Poverty: The Evidence So Far," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 72-115, March. [Downloadable!] (restricted)
  13. Henning Tarp Jensen & Finn Tarp, 2005. "Trade Liberalization and Spatial Inequality: a Methodological Innovation in a Vietnamese Perspective," Review of Development Economics, Blackwell Publishing, vol. 9(1), pages 69-86, 02. [Downloadable!] (restricted)
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  14. J. A. L. Cranfield & James S. Eales & Thomas W. Hertel & Paul V. Preckel, 2003. "Model selection when estimating and predicting consumer demands using international, cross section data," Empirical Economics, Springer, vol. 28(2), pages 353-364, 04. [Downloadable!] (restricted)
  15. Gardner, Bruce L, 1992. "Changing Economic Perspectives on the Farm Problem," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 62-101, March. [Downloadable!] (restricted)
  16. Rutherford, Thomas & Tarr, David & Shepotylo, Oleksandr, 2005. "The impact on Russia of WTO accession and the Doha agenda : the importance of liberalization of barriers against foreign direct investment in services for growth and poverty reduction," Policy Research Working Paper Series 3725, The World Bank. [Downloadable!]
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  18. Harald Grethe, 2006. "Agricultural Trade Reform and the Doha Development Agenda," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 33(4), pages 591-595, December.
  19. Thomas W. Hertel & Maros Ivanic & Paul V. Preckel & John A. L. Cranfield, 2004. "The Earnings Effects of Multilateral Trade Liberalization: Implications for Poverty," World Bank Economic Review, Oxford University Press, vol. 18(2), pages 205-236.
  20. L. Alan Winters, 2002. "Trade Liberalisation and Poverty: What are the Links?," The World Economy, Blackwell Publishing, vol. 25(9), pages 1339-1367, 09. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hertel, Thomas W. & Keeney, Roman, 2009. "The Poverty Impacts of Global Commodity Trade Liberalization," Agricultural Distortions Working Paper 52786, World Bank. [Downloadable!]
  2. Ng, Francis & Aksoy, M. Ataman, 2008. "Who are the net food importing countries ?," Policy Research Working Paper Series 4457, The World Bank. [Downloadable!]
  3. Verma, Monika & Hertel, Thomas W., 2009. "Commodity price volatility and nutrition vulnerability:," IFPRI discussion papers 895, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  4. Keeney, Roman & Beckman, Jayson, 2007. "WTO Impacts on US Rice Producing Households," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34812, Southern Agricultural Economics Association. [Downloadable!]
  5. Diao, Xinshen & Fan, Shenggen & Headey, Derek & Johnson, Michael & Nin Pratt, Alejandro & Yu, Bingxin, 2008. "Accelerating Africa's food production in response to rising food prices: Impacts and requisite actions," IFPRI discussion papers 825, International Food Policy Research Institute (IFPRI). [Downloadable!]
  6. Sebastian Hess & Stephan von Cramon-Taubadel, 2007. "Assessing General and Partial Equilibrium Simulations of Doha Round Outcomes using Meta-Analysis," cege – Center for European, Governance and Economic Development Research Discussion Papers 67, cege – Center for European, Governance and Economic Development Research, University of Goettingen (Germany).. [Downloadable!]
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