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The relative importance of global agricultural subsidies and market access Author info | Abstract | Publisher info | Download info | Related research | Statistics ANDERSON, KYM
MARTIN, WILL
VALENZUELA, ERNESTO
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registered author(s):
The claim by global trade modelers that the potential contribution to global economic welfare of removing agricultural subsidies is less than one-tenth of that from removing agricultural tariffs puzzles many observers. To help explain that result, this paper first compares the OECD and model-based estimates of the extent of the producer distortions (leaving aside consumer distortions), and shows that 75% of total support is provided by market access barriers when account is taken of all forms of support to farmers and to agricultural processors globally, and only 19% to domestic farm subsidies. We then provide a back-of-the-envelope (BOTE) calculation of the welfare cost of those distortions. Assuming unitary supply and demand elasticities, that BOTE analysis suggests 86% of the welfare cost is due to tariffs and only 6% to domestic farm subsidies. When the higher costs associated with the greater variability of trade measures relative to domestic support are accounted for, the BOTE estimate of the latter s share falls to 4%. This is close to the 5% generated by the most commonly used global model (GTAP) and reported in the paper s final section.
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Article provided by Cambridge University Press in its journal World Trade Review .
Volume (Year): 5 (2006)
Issue (Month): 03 (November)
Pages: 357-376
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Handle: RePEc:cup:wotrrv:v:5:y:2006:i:03:p:357-376_00Contact details of provider: Postal: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK Fax: +44 (0)1223 325150 Email: Web page: http://journals.cambridge.org/jid_WTR
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Paper Anderson, Kym & Martin, Will & Valenzuela, Ernesto, 2006.
"The Relative Importance of Global Agricultural Subsidies and Market Access ,"
CEPR Discussion Papers
5569, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Anderson, Kym & Martin, Will & Valenzuela, Ernesto, 2006.
"The Relative Importance of Global Agricultural Subsidies and Market Access ,"
2006 Annual meeting, July 23-26, Long Beach, CA
21180, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
[Downloadable!] Anderson, Kym & Martin, Will & Valenzuela, Ernesto, 2006.
"The relative importance of global agricultural subsidies and market access ,"
Policy Research Working Paper Series
3900, The World Bank.
[Downloadable!] 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.: Anderson, Kym & Martin, Will, 2005.
"Agricultural trade reform and the Doha development agenda ,"
Policy Research Working Paper Series
3607, The World Bank.
[Downloadable!]
Other versions: Kee, Hiau Looi & Nicita, Alessandro & Olarreaga, Marcelo, 2006.
"Estimating trade restrictiveness indices ,"
Policy Research Working Paper Series
3840, The World Bank.
[Downloadable!]
Other versions:
Kee, Hiau Looi & Nicita, Alessandro & Olarreaga, Marcelo, 2006.
"Estimating Trade Restrictiveness Indices ,"
CEPR Discussion Papers
5576, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Hiau LooiKee & Alessandro Nicita & Marcelo Olarreaga, 2009.
"Estimating Trade Restrictiveness Indices ,"
Economic Journal ,
Royal Economic Society, vol. 119(534), pages 172-199, 01.
[Downloadable!] (restricted) Bernard Hoekman & Francis Ng & Marcelo Olarreaga, 2004.
"Agricultural Tariffs or Subsidies: Which Are More Important for Developing Economies? ,"
World Bank Economic Review ,
Oxford University Press, vol. 18(2), pages 175-204.
Diao, Xinshen & Somwaru, Agapi & Roe, Terry, 2001.
"A Global Analysis Of Agricultural Trade Reform In Wto Member Countries ,"
Bulletins
12984, University of Minnesota, Economic Development Center.
[Downloadable!]
Huff, Karen & Thomas W. Hertel, 2001.
"Decomposing Welfare Changes in GTAP ,"
GTAP Technical Papers
308, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
[Downloadable!]
Keeney, Roman & Thomas Hertel, 2005.
"GTAP-AGR : A Framework for Assessing the Implications of Multilateral Changes in Agricultural Policies ,"
GTAP Technical Papers
1869, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
[Downloadable!]
Anderson, Kym & Valenzuela, Ernesto, 2005.
"Do Global Trade Distortions Still Harm Developing Country Farmers? ,"
CEPR Discussion Papers
5337, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions:
Anderson, Kym & Valenzuela, Ernesto, 2006.
"Do global trade distortions still harm developing country farmers ? ,"
Policy Research Working Paper Series
3901, The World Bank.
[Downloadable!] Kym Anderson & Ernesto Valenzuela, 2007.
"Do Global Trade Distortions Still Harm Developing Country Farmers? ,"
Review of World Economics (Weltwirtschaftliches Archiv) ,
Springer, vol. 143(1), pages 108-139, April.
[Downloadable!] (restricted)
Full
references Cited by : (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.)
Anderson, Kym & Valenzuela, Ernesto, 2006.
"Do global trade distortions still harm developing country farmers ? ,"
Policy Research Working Paper Series
3901, The World Bank.
[Downloadable!]
Other versions:
Anderson, Kym & Valenzuela, Ernesto, 2005.
"Do Global Trade Distortions Still Harm Developing Country Farmers? ,"
CEPR Discussion Papers
5337, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Kym Anderson & Ernesto Valenzuela, 2007.
"Do Global Trade Distortions Still Harm Developing Country Farmers? ,"
Review of World Economics (Weltwirtschaftliches Archiv) ,
Springer, vol. 143(1), pages 108-139, April.
[Downloadable!] (restricted) Anderson, Kym & Croser, Johanna & Sandri, Damiano & Valenzuela, Ernesto, 2009.
"Agricultural Distortion Patterns Since the 1950s: What Needs Explaining? ,"
Agricultural Distortions Working Paper
50305, World Bank.
[Downloadable!]
Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2006.
"Doha merchandise trade reform : what's at stake for developing countries ? ,"
Policy Research Working Paper Series
3848, The World Bank.
[Downloadable!]
Other versions:
Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005.
"Doha Merchandise Trade Reform: What’s at Stake for Developing Countries? ,"
CEPR Discussion Papers
5156, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006.
"Doha Merchandise Trade Reform: What Is at Stake for Developing Countries? ,"
World Bank Economic Review ,
Oxford University Press, vol. 20(2), pages 169-195.
Romain Perez & Mustapha Sadni Jallab, 2009.
"Preference erosion and market access liberalization: the African dilemma in multilateral negotiations on agriculture ,"
Review of World Economics (Weltwirtschaftliches Archiv) ,
Springer, vol. 145(2), pages 277-292, July.
[Downloadable!] (restricted)
Martin, Will & Anderson, Kym, 2006.
"The Doha Agenda and Agricultural Trade Reform: The Role of Economic Analysis ,"
2006 Annual Meeting, August 12-18, 2006, Queensland, Australia
25628, International Association of Agricultural Economists.
[Downloadable!]
Other versions: George Verikios & Kevin Hanslow, 2009.
"The Long-Run Effects of Structural Change and the Treatment of International Capital Accumulation, Mobility and Ownership ,"
Centre of Policy Studies/IMPACT Centre Working Papers
g-179, Monash University, Centre of Policy Studies/IMPACT Centre.
[Downloadable!]
Anderson, Kym & Valenzuela, Ernesto, 2006.
"The World Trade Organization's Doha cotton initiative : a tale of two issues ,"
Policy Research Working Paper Series
3918, The World Bank.
[Downloadable!]
Other versions: Kenneth Reinert, 2007.
"The European Union, the Doha Round, and Asia ,"
Asia Europe Journal ,
Springer, vol. 5(3), pages 317-330, September.
[Downloadable!] (restricted)
Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008.
"Methodology for Measuring Distortions to Agricultural Incentives ,"
Agricultural Distortions Working Paper
48326, World Bank.
[Downloadable!]
Anderson, Kym & Valenzuela, Ernesto, 2006.
"WTO's Doha Cotton Initiative: A Tale of Two Issues ,"
CEPR Discussion Papers
5567, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Hoekman, Bernard & Vines, David, 2007.
"Multilateral Trade Cooperation: What Next? ,"
CEPR Discussion Papers
6458, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions: Anderson, Kym & Valenzuela, Ernesto & Van Der Mensbrugghe, Dominique, 2009.
"Welfare and Poverty Effects of Global Agricultural and Trade Policies Using the Linkage Model ,"
Agricultural Distortions Working Paper
52785, World Bank.
[Downloadable!]
Lopez, Ramon & Islam, Asif, 2008.
"When Government Spending Serves the Elites: Consequences for Economic Growth in a Context of Market Imperfections ,"
Working Papers
45875, University of Maryland, Department of Agricultural and Resource Economics.
[Downloadable!]
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