Agricultural Trade Liberalization And Poverty Dynamics In Three Developing Countries

Many developing countries implemented sweeping agricultural reforms over the last decade. Reforms have included the removal of quotas and price controls, changes in international trade barriers, and the commercialization and privatization of state marketing boards for key crops. These reforms have often generated intense criticism from groups claiming that they hurt poor farmers and poor households. This concern has generated an extensive literature on the economics of agricultural trade reform in developing countries, much of which has focused on explaining the large variations in supply response across countries, regions and households (e.g., Key, Sadoulet, and De Janvry). In addition, anumber of papers have attempted to simulate the impact on poverty using household survey data and actual or predicted price changes (e.g., Chen and Ravallion). However, in many cases the true impact of agricultural reform is difficult to determine. In part this is because the analysis is based upon household surveys at a single point in time, so that the final (post-adjustment) consequences upon individual households are unknown. Also, even where observations are available over time, it has so far proved difficult to disentangle the effects of trade and agricultural liberalization from other contemporary shocks…