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The relative importance of global agricultural subsidies and tariffs, revisited

Author

Listed:
  • Kym Anderson
  • Erwin Corong
  • Anna Strutt
  • Ernesto Valenzuela

Abstract

Over the past three decades, tariff protection to farmers has fallen and partly been replaced by domestic support, whilst support for farmers in some emerging economies has grown. Against that backdrop, this paper provides new estimates of national economic impacts of global agricultural tariffs and domestic supports. Using the latest global economywide GTAP (Global Trade Analysis Project) model calibrated to 2017, we simulate (a) the removal of food and agricultural domestic supports and agri-food tariffs and (b) the removal also of tariffs on imports of non-agricultural goods. We find that agricultural support policies are still an important part of the global welfare cost of all goods’ trade-restrictive policies (albeit only half as costly as in 2001), and tariffs still dominate the global welfare cost of all farm-support programs. That farm support could be re-instrumented to relieve natural resource and environmental stresses, boost food and nutrition security, and alleviate poverty and income inequality.

Suggested Citation

  • Kym Anderson & Erwin Corong & Anna Strutt & Ernesto Valenzuela, 2023. "The relative importance of global agricultural subsidies and tariffs, revisited," Departmental Working Papers 2023-03, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2023-03
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    File URL: https://acde.crawford.anu.edu.au/sites/default/files/publication/crawford01_cap_anu_edu_au/2023-02/acde_td_anderson_et_al_2023_03.pdf
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    References listed on IDEAS

    as
    1. Will Martin & Kym Anderson, 2006. "Agricultural Trade Reform and the Doha Development Agenda," World Bank Publications - Books, The World Bank Group, number 6889, December.
    2. Kym Anderson & Ernesto Valenzuela, 2021. "What impact are subsidies and trade barriers abroad having on Australasian and Brazilian agriculture?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 265-290, April.
    3. Angel Aguiar & Maksym Chepeliev & Erwin Corong & Dominique van der Mensbrugghe, 2022. "The Global Trade Analysis Project (GTAP) Data Base: Version 11," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 7(2), pages 1-37, December.
    4. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    5. Anderson, Kym & Martin, Will & Valenzuela, Ernesto, 2006. "The relative importance of global agricultural subsidies and market access," World Trade Review, Cambridge University Press, vol. 5(3), pages 357-376, November.
    6. Terrie Walmsley & Anna Strutt, 2021. "A Comparison of Approaches to Modelling Non-Tariff Measures," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 6(1), pages 1-33, June.
    7. Kym Anderson & Hans Grinsted Jensen & Signe Nelgen & Anna Strutt, 2016. "What is the Appropriate Counterfactual When Estimating Effects of Multilateral Trade Policy Reform?," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 764-778, September.
    8. Sven Wunder & Jan Börner & Driss Ezzine-de-Blas & Sarah Feder & Stefano Pagiola, 2020. "Payments for Environmental Services: Past Performance and Pending Potentials," Annual Review of Resource Economics, Annual Reviews, vol. 12(1), pages 209-234, October.
    9. Kirsten Boysen‐Urban & Martina Brockmeier & Hans G. Jensen & Ole Boysen, 2020. "Measuring the Trade Restrictiveness of Domestic Support using the EU Common Agricultural Policy as an Example," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(1), pages 27-49, February.
    10. Urban, Kirsten & Jensen, Hans G. & Brockmeier, Martina, 2016. "How decoupled is the Single Farm Payment and does it matter for international trade?," Food Policy, Elsevier, vol. 59(C), pages 126-138.
    11. Robert T. Jensen & Nolan H. Miller, 2011. "Do Consumer Price Subsidies Really Improve Nutrition?," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1205-1223, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Distortions to agricultural incentives; Domestic support; Agricultural market access restrictions;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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