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Agricultural Price Distortions: Trends and Volatility, Past and Prospective

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  • Anderson, Kym

Abstract

For decades, earnings from farming in many developing countries have been depressed by a pro-urban bias in own-country policies, as well as by governments of richer countries favouring their farmers with import barriers and subsidies. Both sets of policies reduced global economic welfare and agricultural trade, and almost certainly added to global inequality and poverty. Progress has been made over the past three decades in reducing agricultural protection in high-income countries and agricultural disincentives in developing countries, but the propensity of governments to insulate their domestic food market from fluctuations in international prices has not waned. Both food-importing and food-exporting countries engage in insulating behaviour, which contributes to the amplification of international food price fluctuations yet does little to advance their national food security. Thus much scope still remains to improve economic welfare and to reduce poverty by removing remaining trade distortions. This paper summarizes indicators of these trends and fluctuations in farm trade barriers before examining what unilateral or multilateral trade arrangements, together with complementary domestic measures, could help advance global food security.

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Bibliographic Info

Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 125692.

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Date of creation: 15 Jun 2012
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Handle: RePEc:ags:iaae12:125692

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Keywords: Long-term trade policy trends; policy responses to price volatility; relative rates of assistance; Agricultural and Food Policy; F13; F14; Q17; Q18;

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  1. Martin, Will & Anderson, Kym, 2011. "Export restrictions and price insulation during commodity price booms," Policy Research Working Paper Series 5645, The World Bank.
  2. Ronald Findlay & Kevin H. O'Rourke, 2007. "Introduction to Power and Plenty: Trade, War, and the World Economy in the Second Millennium
    [Power and Plenty: Trade, War, and the World Economy in the Second Millennium]
    ," Introductory Chapters, Princeton University Press.
  3. Anderson, Kym & Cockburn, John & Martin, Will, 2011. "Would freeing up world trade reduce poverty and inequality ? the vexed role of agricultural distortions," Policy Research Working Paper Series 5603, The World Bank.
  4. Anderson, Kym & Lloyd, Peter J & Maclaren, Donald, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," CEPR Discussion Papers 6436, C.E.P.R. Discussion Papers.
  5. D. Gale Johnson, 1987. "World Agriculture In Disarray Revisited," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 31(2), pages 142-153, 08.
  6. Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Measuring Distortions to Agricultural Incentives, Revisited," CEPR Discussion Papers 6924, C.E.P.R. Discussion Papers.
  7. Ronald Findlay & Kevin H. O'Rourke, 2007. "Power and Plenty: Trade, War and the World Economy in the Second Millennium (Preface)," The Institute for International Integration Studies Discussion Paper Series iiisdp205, IIIS.
  8. Gordon H. Hanson, 2012. "The Rise of Middle Kingdoms: Emerging Economies in Global Trade," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 41-64, Spring.
  9. Anderson, Kym & Strutt, Anna, 2013. "South America’s Contribution to World Food Markets: GTAP Projections to 2030," Working Papers 145369, International Agricultural Trade Research Consortium.
  10. Hertel, Thomas & Beckman, Jayson, 2010. "Commodity Price Volatility in the Biofuel Era: An Examination of the Linkage between Energy and Agricultural Markets," GTAP Working Papers 3214, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  11. Henning Tarp Jensen & Sherman Robinson & Finn Tarp, 2010. "Measuring Agricultural Policy Bias: General Equilibrium Analysis of Fifteen Developing Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 1136-1148.
  12. Anderson, Kym & Strutt, Anna, 2012. "The changing geography of world trade: Projections to 2030," Journal of Asian Economics, Elsevier, vol. 23(4), pages 303-323.
  13. Richard J. Sexton, 2013. "Market Power, Misconceptions, and Modern Agricultural Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 209-219.
  14. Martin Ravallion & Shaohua Chen & Prem Sangraula, 2007. "New Evidence on the Urbanization of Global Poverty," Population and Development Review, The Population Council, Inc., vol. 33(4), pages 667-701.
  15. Skoufias, Emmanuel & Tiwari, Sailesh & Zaman, Hassan, 2011. "Can we rely on cash transfers to protect dietary diversity during food crises ? estimates from Indonesia," Policy Research Working Paper Series 5548, The World Bank.
  16. Ronald Findlay & Kevin H. O'Rourke, 2007. "Preface to Power and Plenty: Trade, War, and the World Economy in the Second Millennium
    [Power and Plenty: Trade, War, and the World Economy in the Second Millennium]
    ," Introductory Chapters, Princeton University Press.
  17. Valenzuela, Ernesto & van der Mensbrugghe, Dominique & Anderson, Kym, 2008. "General equilibrium effects of price distortions on global markets, farm incomes and welfare," Agricultural Distortions Working Paper 48630, World Bank.
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Cited by:
  1. Orden, David, 2013. "The Changing Structure of Domestic Support and Its Implications for Trade," Commissioned Papers 146657, Canadian Agricultural Trade Policy Research Network.

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