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Distortions to Global Agricultural Markets: What Next?

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  • Anderson, Kym

Abstract

A decline in governmental distortions to agricultural and other trade since the 1980s has contributed to economic growth and poverty alleviation globally. But new modeling results suggest that has taken the world only three-fifths of the way towards freeing merchandise trade, and that farm policies are responsible for 70 percent of the global welfare cost of remaining distortions to goods markets as of 2004. Meanwhile, new drivers are affecting the mean and variance of world prices of farm products, including biofuel mandates and subsidies, climate change mitigation policies and adaptation, water institution and policy developments, difficulties in concluding a multilateral Doha Round agricultural agreement at the WTO, and policies relating to transgenic foods. This paper reviews trends and fluctuations in past distortions to agricultural incentives, speculates on how they might evolve in coming decades alongside other market developments, and draws out implications for Australia.

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Bibliographic Info

Paper provided by Australian Agricultural and Resource Economics Society in its series 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia with number 59849.

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Date of creation: 2010
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Handle: RePEc:ags:aare10:59849

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Keywords: Distorted incentives; agricultural and trade policy reforms; Asia-Pacific region; Agricultural and Food Policy; International Relations/Trade; F13; F14; Q17; Q18;

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