Distributional effects of WTO agricultural reforms in rich and poor countries
AbstractRich countries'agricultural trade policies are the battleground on which the future of the WTO's troubled Doha Round will be determined. Subject to widespread criticism, they nonetheless appear to be almost immune to serious reform, and one of their most common defenses is that they protect poor farmers. The authors'findings reject this claim. The analysis uses detailed data on farm incomes to show that major commodity programs are highly regressive in the United States, and that theonly serious losses under trade reform are among large, wealthy farmers in a few heavily protected subsectors. In contrast, analysis using household data from 15 developing countries indicates that reforming rich countries'agricultural trade policies would lift large numbers of developing country farm households out of poverty. In the majority of cases these gains are not outweighed by the poverty-increasing effects of higher food prices among other households. Agricultural reforms that appear feasible, even under an ambitious Doha Round, achieve only a fraction of the benefits for developing countries that full liberalization promises, but protect U.S. large farms from most of the rigors of adjustment. Finally, the analysis indicates that maximal trade-led poverty reductions occur when developing countries participate more fully in agricultural trade liberalization.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4060.
Date of creation: 01 Nov 2006
Date of revision:
Rural Poverty Reduction; Economic Theory&Research; Population Policies; Achieving Shared Growth;
Other versions of this item:
- Thomas W. Hertel & Roman Keeney & Maros Ivanic & L. Alan Winters, 2007. "Distributional effects of WTO agricultural reforms in rich and poor countries," Economic Policy, CEPR & CES & MSH, vol. 22, pages 289-337, 04.
- Hertel, Thomas & Keeney, Roman & Ivanic, Maros & Winters, Alan, 2006. "Distributional Effects of WTO Agricultural Reforms in Rich and Poor Countries," GTAP Working Papers 2185, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- NEP-AFR-2006-11-18 (Africa)
- NEP-AGR-2006-11-18 (Agricultural Economics)
- NEP-ALL-2006-11-18 (All new papers)
- NEP-DEV-2006-11-18 (Development)
- NEP-INT-2006-11-18 (International Trade)
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