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Measuring distortions to agricultural incentives, revisited

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  • Anderson, Kym
  • Kurzweil, Marianne
  • Martin, Will
  • Sandri, Damiano
  • Valenzuela, Ernesto

Abstract

Notwithstanding the tariffication component of the Uruguay Round Agreement on Agriculture, import tariffs on farm products continue to provide an incomplete indication of the extent to which agricultural producer and consumer incentives are distorted in national markets. Especially in developing countries, non-agricultural policies indirectly impact agricultural and food markets. Empirical analysis aimed at monitoring distortions to agricultural incentives thus need to examine both agricultural and non-agricultural policy measures including import or export taxes, subsidies and quantitative restrictions, plus domestic taxes or subsidies on farm outputs or inputs and consumer subsidies for food staples. This paper addresses the practical methodological issues that need to be faced when attempting to undertake such a measurement task in developing countries. The approach is illustrated in two ways: by presenting estimates of nominal and relative rates of assistance to farmers in China for the period 1981 to 2005; and by summarizing estimates from an economy-wide computable general equilibrium model of the effects on agricultural versus non-agricultural markets of the project's measured distortions globally as of 2004.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4612.

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Date of creation: 01 Apr 2008
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Handle: RePEc:wbk:wbrwps:4612

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Keywords: Agribusiness; Economic Theory&Research; Emerging Markets; Currencies and Exchange Rates; Debt Markets;

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  1. Anderson, Kym & Lloyd, Peter J & Maclaren, Donald, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6436, C.E.P.R. Discussion Papers.
  2. Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Measuring distortions to agricultural incentives, revisited," World Trade Review, Cambridge University Press, Cambridge University Press, vol. 7(04), pages 675-704, October.
  3. Krueger, Anne O & Schiff, Maurice & Valdes, Alberto, 1988. "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review, World Bank Group, World Bank Group, vol. 2(3), pages 255-71, September.
  4. de Melo, Jaime & Robinson, Sherman, 1989. "Product differentiation and the treatment of foreign trade in computable general equilibrium models of small economies," Journal of International Economics, Elsevier, Elsevier, vol. 27(1-2), pages 47-67, August.
  5. Valdes, A, 1996. "Surveillance of Agricultural Price and Trade Policy in Latin America during Major Policy Reform," World Bank - Discussion Papers, World Bank 349, World Bank.
  6. Anderson, Kym & Martin, William J., 2007. "Distortions to Agricultural Incentives in Asia," Agricultural Distortions Working Paper, World Bank 48557, World Bank.
  7. Martin, Will, 1993. "Modeling the post-reform Chinese economy," Journal of Policy Modeling, Elsevier, Elsevier, vol. 15(5-6), pages 545-579.
  8. Anderson, Kym & Kurzweil, Marianne & Martin, William J. & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Methodology for Measuring Distortions to Agricultural Incentives," Agricultural Distortions Working Paper, World Bank 48326, World Bank.
  9. Huang, Jikun & Rozelle, Scott & Martin, William J. & Liu, Yu, 2007. "Distortions to Agricultural Incentives in China," Agricultural Distortions Working Paper, World Bank 48478, World Bank.
  10. Gulati, Ashok & Narayanan, Sudha, 2003. "The Subsidy Syndrome in Indian Agriculture," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780195662061, October.
  11. Orden, David & Cheng, Fuzhi & Nguyen, Hoa & Grote, Ulrike & Thomas, Marcelle & Mullen, Kathleen & Sun, Dongsheng, 2007. "Agricultural producer support estimates for developing countries: Measurement issues and evidence from India, Indonesia, China, and Vietnam," Research reports, International Food Policy Research Institute (IFPRI) 152, International Food Policy Research Institute (IFPRI).
  12. Dervis, Kemal & de Melo, Jaime & Robinson, Sherman, 1981. "A General Equilibrium Analysis of Foreign Exchange Shortages in a Developing Economy," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 91(364), pages 891-906, December.
  13. Elena Ianchovichina & Will Martin, 2004. "Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, World Bank Group, vol. 18(1), pages 3-27.
  14. Rausser, Gordon C., 1982. "Political economic markets: PERTS and PESTS in food and agriculture," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series, Department of Agricultural & Resource Economics, UC Berkeley qt6ct5s49t, Department of Agricultural & Resource Economics, UC Berkeley.
  15. Tarr, David G, 1990. "Second-Best Foreign Exchange Policy in the Presence of Domestic Price Controls and Export Subsidies," World Bank Economic Review, World Bank Group, World Bank Group, vol. 4(2), pages 175-93, May.
  16. Shatz, Howard J. & Tarr, David G., 2000. "Exchange rate overvaluation and trade protection - lessons from experience," Policy Research Working Paper Series 2289, The World Bank.
  17. Kiguel, Miguel & O'Connell, Stephen A, 1995. "Parallel Exchange Rates in Developing Countries," World Bank Research Observer, World Bank Group, World Bank Group, vol. 10(1), pages 21-52, February.
  18. Garnaut, Ross & Clunies-Ross, Anthony, 1983. "Taxation of Mineral Rents," OUP Catalogue, Oxford University Press, Oxford University Press, edition 1, number 9780198284543, October.
  19. Anderson, Kym & Lattimore, Ralph G. & Lloyd, Peter J. & MacLaren, Donald, 2008. "Distortions to Agricultural Incentives in Australia and New Zealand," Agricultural Distortions Working Paper, World Bank 48387, World Bank.
  20. Valdes, A., 2000. "Agricultural Support Policies in Transition Economies," Papers, World Bank - Technical Papers 470, World Bank - Technical Papers.
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