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Tell me where it hurts, an' I'll tell you who to call

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Author Info
Diao, Xinshen
Diaz-Bonilla, Eugenio
Robinson, Sherman
Orden, David

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Abstract

"This paper accomplishes two objectives. First, it provides simulation results from a computable general equilibrium (CGE) model that have helped focus the debate about the potential effects of agricultural trade liberalization on developing countries. The aggregate numbers show modest net positive effects over a medium-term period (five years out). First, when developed countries fully remove their subsidies and trade barriers, welfare and GDP of the developing countries rise, as do value added in agricultural production and agro-industries, and agricultural exports. Focal point estimates that we provide are increases in welfare and GDP of $10 billion and $15 billion, respectively, while agricultural value added increases $23 billion and agricultural exports by $37 billion. Second, when developing countries also eliminate their subsidies and trade barriers, there is an additional net gain in aggregated developing country welfare and GDP—which now increase by nearly $20 billion and $38 billion. Thus, developing countries gain from developed country liberalization, but there are also gains from reform of their own policies. Our results suggest a fairly even balance between these sources of gains. The second and equally important contribution of the paper is to describe the heterogeneity among developing countries in terms of their agricultural resources, and to disaggregate the simulated results among 40 developing countries or regions. The basic model includes the innovation of assuming there is unemployed labor in developing countries, so growth in agricultural production has a modest “multiplier” effect. The basic model also allows for a slight positive effect of increased trade on productivity—the focal results cited above include this impact. Effects are distinguished between elimination of subsidies and trade barriers by the US, the EU, Japan and Korea, and all developed countries simultaneously. Effects on different developing countries and regions differ due to differences in the subsidy and trade barrier instruments utilized by the developed countries, the commodities affected, and the trade patterns and volumes evident in the initial baseline data." Authors' Abstract

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Paper provided by International Food Policy Research Institute (IFPRI) in its series MTID discussion papers with number 84.

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Date of creation: 2005
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Handle: RePEc:fpr:mtiddp:84

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Keywords: Agricultural policies ; Developing countries ; Industrialized countries ; Computable General Equilibrium Models ; trade liberalization ; Trade barriers ; subsidies ;

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This paper has been announced in the following NEP Reports: 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.:
  1. Baulch, Bob & Minot, Nicholas, 2002. "Poverty mapping with aggregate census data," MSSD discussion papers 49, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  2. Fafchamps, M. & Minten, B., 1999. "Property Rights in a Flea Market Economy," Working Papers Series 99-25, Centre for the Study of African Economies, University of Oxford.
    Other versions:
  3. Minot, Nicholas, 2000. "Generating Disaggregated Poverty Maps: An Application to Vietnam," World Development, Elsevier, vol. 28(2), pages 319-331, February. [Downloadable!] (restricted)
  4. Nguyen, Hoa & Grote, Ulrike, 2004. "Agricultural policies in Vietnam," MTID discussion papers 79, International Food Policy Research Institute (IFPRI). [Downloadable!]
  5. Minot, Nicholas & Daniels, Lisa, 2002. "Impact of global cotton markets on rural poverty in Benin," MSSD discussion papers 48, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  6. Negassa, Asfaw & Myers, Robert & Gabre-Madhin, Eleni Z., 2004. "Grain marketing policy changes and spatial efficiency of maize and wheat markets in Ethiopia," MTID discussion papers 66, International Food Policy Research Institute (IFPRI). [Downloadable!]
  7. Minot, Nicholas, 1999. "Effects of transaction costs on supply response and marketed surplus," MTID discussion papers 36, International Food Policy Research Institute (IFPRI). [Downloadable!]
  8. Minot, Nicholas & Ngigi, Margaret, 2004. "Are horticultural exports a replicable success story?: evidence from Kenya and Côte d'Ivoire," EPTD discussion papers 120, International Food Policy Research Institute (IFPRI). [Downloadable!]
  9. Kherallah, Mylène & Minot, Nicholas & Gruhn, Peter, 1999. "Adjustment of wheat production to market reform in Egypt," MTID discussion papers 32, International Food Policy Research Institute (IFPRI). [Downloadable!]
  10. Minot, Nicholas & Baulch, Bob, 2002. "The spatial distribution of poverty in Vietnam and the potential for targeting," MSSD discussion papers 42, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  11. Shahabuddin, Quazi & Dorosh, Paul A., 2002. "Comparative advantage in Bangladesh crop production," MSSD discussion papers 47, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  12. Rashid, Shahidur, 2004. "Spatial integration of maize markets in post-liberalized Uganda," MTID discussion papers 71, International Food Policy Research Institute (IFPRI). [Downloadable!]
  13. Staal, Steven & Delgado, Christopher L. & Nicholson, Charles F., 1996. "Smallholder dairying under transactions costs in East Africa," MTID discussion papers 9, International Food Policy Research Institute (IFPRI). [Downloadable!]
  14. Rusike, Joseph, 1995. "The development of maize seed markets in Sub-Saharan Africa," MTID discussion papers 5, International Food Policy Research Institute (IFPRI).
  15. Badiane, Ousmane & Shively, Gerald E., 1997. "The response of local maize prices to the 1983 currency devaluation in Ghana," MTID discussion papers 12, International Food Policy Research Institute (IFPRI). [Downloadable!]
  16. Ngqangweni, Simphiwe, 1999. "Rural growth linkages in the Eastern Cape Province of South Africa," MTID discussion papers 33, International Food Policy Research Institute (IFPRI). [Downloadable!]
  17. Islam, Nabul, 2003. "Demand projections for poultry products and poultry feeds in Bangladesh," MSSD discussion papers 54, International Food Policy Research Institute (IFPRI). [Downloadable!]
  18. Cheng, Fuzhi & Orden, David, 2005. "Exchange Rate Misalignment and Its Effects on Agricultural Producer Support Estimates: Empirical Evidence from India and China," 2005 Annual meeting, July 24-27, Providence, RI 19121, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  19. Abdulai, Awudu & Delgado, Christopher L., 1999. "An empirical investigation of short and long-run agricultural wage formation in Ghana," MTID discussion papers 37, International Food Policy Research Institute (IFPRI). [Downloadable!]
  20. Peterson, Everett B. & Orden, David, 2004. "Effects of tariffs and sanitary barriers on high- and low-value poultry trade," MTID discussion papers 64, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  21. Delgado, Christopher L. & Rosegrant, Mark W. & Steinfeld, Henning & Ehui, Simeon K. & Courbois, Claude, 1999. "The growing place of livestock products in world food in the twenty-first century," MTID discussion papers 28, International Food Policy Research Institute (IFPRI). [Downloadable!]
  22. Goletti, Francesco & Wolff, Christiane, 1999. "The impact of postharvest research," MTID discussion papers 29, International Food Policy Research Institute (IFPRI). [Downloadable!]
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.)

  1. Ben Hammouda, Hakim & Osakwe, Patrick N., 2006. "Global Trade Models and Economic Policy Analyses: Relevance, Risks and Repercussions for Africa," MPRA Paper 1851, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  2. Bureau, Jean-Christophe & Jean, Sebastien & Matthews, Alan, 2006. "The Consequences of Agricultural Trade Liberalization for Developing Countries," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25471, International Association of Agricultural Economists. [Downloadable!]
  3. Bouët, Antoine, 2006. "What can the poor expect from trade liberalization?: opening the "black box" of trade modeling," MTID discussion papers 93, International Food Policy Research Institute (IFPRI). [Downloadable!]
  4. Hoddinott, John & Cohen, Marc J., 2007. "Renegotiating the Food Aid Convention: Background, context, and issues," IFPRI discussion papers 690, International Food Policy Research Institute (IFPRI). [Downloadable!]
  5. Hewitt, Joanna, 2008. "Impact evaluation of research by the International Food Policy Research Institute on agricultural trade liberalization, developing countries, and WTO's Doha negotiations:," Impact assessments 28, International Food Policy Research Institute (IFPRI). [Downloadable!]
  6. Ramaswami, Bharat & Birthal, Pratap Singh & Joshi, P.K., 2006. "Efficiency and distribution in contract farming: the case of Indian poultry growers," MTID discussion papers 91, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  7. Bureau, Jean-Christophe & Jean, Sebastien & Matthews, Alan, 2005. "Agricultural Trade Liberalization: Assessing the Consequences for Developing Countries," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24628, European Association of Agricultural Economists. [Downloadable!]
  8. Nyhodo, B. & Punt, C. & Vink, N., 2009. "The potential impact of the Doha Development Agenda on the South African economy: liberalising OECD agriculture and food trade," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(1), March. [Downloadable!]
  9. Chowdhury, Nuimuddin & Farid, Nasir & Roy, Devesh, 2006. "Food policy liberalization in Bangladesh: how the government and the markets delivered," MTID discussion papers 92, International Food Policy Research Institute (IFPRI). [Downloadable!]
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