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The impact of OECD Agricultural trade liberalization on poverty in Uganda

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  • Charles Augustine Abuka
  • Michael Atingi-Ego
  • Jacob Opolot
  • Marian Mraz

Abstract

The paper examines the projected impacts of agricultural trade liberalisation by OECD countries on poverty in Uganda and compares them to the poverty impacts of all merchandise trade liberalisation. The overall impact of OECD agricultural trade liberalisation on welfare in Uganda from this simulation is positive in contrast to previous research, nevertheless, the poor appear to be made worse off. The liberalisation of all OECD merchandise trade including non-agricultural commodities reduces welfare for all deciles irrespective of household poverty status, residence and region. The results for global partial merchandise trade liberalisation are similar to those for total trade liberalisation with an overall welfare decline of about 0.5 percent. More specifically, even the modest welfare gains for producers from increased prices seem to be offset by welfare losses from increases in consumer goods. Overall, because of the large subsistence agricultural sector, households tend to experience little or no change in total welfare arising from agricultural price changes. Increases in market value of their agricultural based output tend to be offset by changes in the opportunity cost of their subsistence consumption of the bulk of that output.

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Bibliographic Info

Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp208.

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Date of creation: 04 Apr 2007
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Handle: RePEc:iis:dispap:iiisdp208

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Keywords: Microsimulation; agricultural trade liberalization; Uganda ; poverty;

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  1. Adam Blake & Andrew McKay & Oliver Morrissey, 2002. "The Impact on Uganda of Agricultural Trade Liberalisation," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 365-381.
  2. Diego Angemi & N.S. Ssewanyana, 2004. "Understanding the Determinants of Income Inequality in Uganda," Economics Series Working Papers WPS/2004-29, University of Oxford, Department of Economics.
  3. Jacob Opolot & Rose Kuteesa, 2006. "Impact of Policy Reforms on Agriculture and Poverty in Uganda," The Institute for International Integration Studies Discussion Paper Series iiisdp158, IIIS.
  4. Gavian, Sarah & Ehui, Simeon, 1999. "Measuring the production efficiency of alternative land tenure contracts in a mixed crop-livestock system in Ethiopia," Agricultural Economics: The Journal of the International Association of Agricultural Economists, International Association of Agricultural Economists, vol. 20(1), January.
  5. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," World Bank Economic Review, World Bank Group, vol. 10(1), pages 1-25, January.
  6. Reimer, Jeffrey J., 2002. "Estimating the poverty impacts of trade liberalization," Policy Research Working Paper Series 2790, The World Bank.
  7. Ritva Reinikka & Paul Collier, 2001. "Uganda's Recovery : The Role of Farms, Firms, and Government," World Bank Publications, The World Bank, number 13850, October.
  8. N. S. Ssewanyana & A J. Okidi & D. Angemi & V. Barungi, 2004. "Understanding the determinants of income inequality in Uganda," CSAE Working Paper Series 2004-29, Centre for the Study of African Economies, University of Oxford.
  9. Winters, L. Alan, 2000. "Trade, Trade Policy and Poverty: What Are The Links?," CEPR Discussion Papers 2382, C.E.P.R. Discussion Papers.
  10. Mackinnon, John & Reinikka, Ritva, 2000. "Lessons from Uganda on strategies to fight poverty," Policy Research Working Paper Series 2440, The World Bank.
  11. Thomas Giblin & Alan Matthews, 2005. "Global and EU Agricultural Trade Reform: What is in it for Tanzania, Uganda and Sub-Saharan Africia?," The Institute for International Integration Studies Discussion Paper Series iiisdp074, IIIS.
  12. Datt, Gaurav & Ravallion, Martin, 1996. "Why have some Indian states done better than others at reducing rural poverty?," Policy Research Working Paper Series 1594, The World Bank.
  13. Rosette, Nabbumba & Godfrey, Bahiigwa, 2003. "Agricultural Productivity Constraints in Uganda: Implications for Investment," Research Series 151127, Economic Policy Research Centre (EPRC).
  14. Ellis, Frank & Bahiigwa, Godfrey, 2003. "Livelihoods and Rural Poverty Reduction in Uganda," World Development, Elsevier, vol. 31(6), pages 997-1013, June.
  15. Minot, Nicholas & Goletti, Francesco, 2000. "Rice market liberalization and poverty in Viet Nam:," Research reports 114, International Food Policy Research Institute (IFPRI).
  16. Charles Lwanga-Ntale & Kimberley McClean, 2004. "The Face of Chronic Poverty in Uganda from the Poor's Perspective: constraints and opportunities," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 5(2), pages 177-194.
  17. Gavian, Sarah & Ehui, Simeon, 1999. "Measuring the production efficiency of alternative land tenure contracts in a mixed crop-livestock system in Ethiopia," Agricultural Economics, Blackwell, vol. 20(1), pages 37-49, January.
  18. Udry, Christopher, 1996. "Gender, Agricultural Production, and the Theory of the Household," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1010-46, October.
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