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Distributional effects of WTO agricultural reforms in rich and poor countries

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  • Thomas W. Hertel
  • Roman Keeney
  • Maros Ivanic
  • L. Alan Winters

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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Bibliographic 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

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Citations

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Cited by:
  1. Hertel, Thomas W. & Keeney, Roman, 2009. "The Poverty Impacts of Global Commodity Trade Liberalization," Agricultural Distortions Working Paper 52786, World Bank.
  2. Caracciolo, Francesco & Santeramo, Fabio Gaetano, 2012. "Price trends and income inequalities: will Sub-Saharan-Africa reduce the gap?," MPRA Paper 45196, University Library of Munich, Germany.
  3. Hertel, Thomas, 2013. "Global Applied General Equilibrium Analysis Using the Global Trade Analysis Project Framework," Handbook of Computable General Equilibrium Modeling, Elsevier.
  4. Douillet, Mathilde, 2012. "Trade policies and agricultural exports of Sub-Saharan African countries: Some stylized facts and perspectives," MPRA Paper 40962, University Library of Munich, Germany.
  5. Balagtas, Joseph Valdes & Bhandari, Humnath & Mohanty, Samarendu & Cabrera, Ellanie & Hossain, Mahabub, 2012. "Impact of a Commodity Price Spike on Poverty Dynamics: Evidence from a Panel of Rural Households in Bangladesh," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124225, Australian Agricultural and Resource Economics Society.
  6. Hess, Sebastian & von Cramon-Taubadel, Stephan, 2007. "Assessing general and partial equilibrium simulations of Doha round outcomes using meta-analysis," Center for European, Governance and Economic Development Research Discussion Papers 67, University of Goettingen, Department of Economics.
  7. Keeney, Roman & Beckman, Jayson, 2009. "WTO negotiations on agriculture and the distributional impacts for US rice farm households," Food Policy, Elsevier, vol. 34(1), pages 70-80, February.
  8. Hess, Sebastian & Cramon-Taubadel, Stephan von & Sperlich, Stefan, 2010. "Numbers for Pascal: explaining differences in the estimated benefits of the Doha Development Agenda," DARE Discussion Papers 1001, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
  9. Verma, Monika & Hertel, Thomas W., 2009. "Commodity price volatility and nutrition vulnerability:," IFPRI discussion papers 895, International Food Policy Research Institute (IFPRI).
  10. Douillet, Mathilde, 2012. "Trade policy reforms in the new agricultural context: Is regional integration a priority for Sub-Saharan African countries agricultural-led industrialization? Insights from a global computable general," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126546, International Association of Agricultural Economists.
  11. Keeney, Roman & Beckman, Jayson F., 2007. "WTO Impacts on US Rice Producing Households," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34812, Southern Agricultural Economics Association.
  12. Jayne, T.S. & Mather, David & Mghenyi, Elliot, 2010. "Principal Challenges Confronting Smallholder Agriculture in Sub-Saharan Africa," World Development, Elsevier, vol. 38(10), pages 1384-1398, October.
  13. Ng, Francis & Aksoy, M. Ataman, 2008. "Who are the net food importing countries ?," Policy Research Working Paper Series 4457, The World Bank.
  14. Francis Ng & M.Ataman Aksoy, 2013. "Who Are the Net Food Importing Countries?," Working Papers 2013/1, Turkish Economic Association.
  15. Todd Kuethe & Mitch Morehart, 2012. "The Agricultural Resource Management Survey: An information system for production agriculture," Agricultural Finance Review, Emerald Group Publishing, vol. 72(2), pages 191-200, July.
  16. World Bank, 2009. "Strengthening Bolivian Competitiveness : Export Diversification and Inclusive Growth," World Bank Publications, The World Bank, number 2656, July.
  17. 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).

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