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Novel indicators of the trade and welfare effects of agricultural distortions in OECD countries

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  • Anderson, Kym
  • Croser, Johanna

Abstract

Agricultural markets in OECD countries have long been highly distorted by government policies. Traditional weighted average aggregates of the price distortions involved, such as producer and consumer support estimates can be poor indicators of the trade restrictiveness and economic welfare losses associated with them, especially if a country's support estimates vary a lot across the product range. Certainly estimates of trade and welfare effects of price supports can be obtained from sector or economy-wide models using price elasticity estimates, but the results can be contentiousif there is no consensus on what model specification and elasticity parameters to use. This paper shows that, if there is a willingness to accept simple assumptions about elasticities, it is possible to generate indicators of the welfare and trade restrictiveness of agricultural policies using no more than the price and quantity data needed to generate producer and consumer support estimates. These new indexes thus provide an attractive supplement to the current policy monitoring regime developed by the OECD Secretariat.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5404.

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Date of creation: 01 Aug 2010
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Handle: RePEc:wbk:wbrwps:5404

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Keywords: Economic Theory&Research; Markets and Market Access; Emerging Markets; Crops&Crop Management Systems; Free Trade;

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  1. Anderson, Kym, 2009. "Five Decades of Distortions to Agricultural Incentives," Agricultural Distortions Working Paper 48742, World Bank.
  2. Anderson, Kym & Martin, William J., 2007. "Distortions to Agricultural Incentives in Asia," Agricultural Distortions Working Paper 48557, World Bank.
  3. Lloyd, Peter J. & Croser, Johanna L. & Anderson, Kym, 2009. "Global distortions to agricultural markets : new indicators of trade and welfare impacts, 1955 to 2007," Policy Research Working Paper Series 4865, The World Bank.
  4. Johanna L. Croser & Peter J. Lloyd & Kym Anderson, 2010. "How Do Agricultural Policy Restrictions on Global Trade and Welfare Differ Across Commodities?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(3), pages 698-712.
  5. Anderson, Kym & Swinnen, Johan F.M., 2007. "Distortions to Agricultural Incentives in Europe’s Transition Economies," Agricultural Distortions Working Paper 48556, World Bank.
  6. James E. Anderson & J. Peter Neary, 2005. "Measuring the Restrictiveness of International Trade Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012200, December.
  7. Douglas A. Irwin, 2010. "Trade Restrictiveness and Deadweight Losses from US Tariffs," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 111-33, August.
  8. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications, The World Bank, number 9436, October.
  9. Anderson, Kym & Lattimore, Ralph G. & Lloyd, Peter J. & MacLaren, Donald, 2008. "Distortions to Agricultural Incentives in Australia and New Zealand," Agricultural Distortions Working Paper 48387, World Bank.
  10. Croser, Johanna & Anderson, Kym, 2010. "Changing contributions of different agricultural policy instruments to global reductions in trade and welfare," Policy Research Working Paper Series 5345, The World Bank.
  11. Anderson, Kym & Valenzuela, Ernesto, 2005. "Do Global Trade Distortions Still Harm Developing Country Farmers?," CEPR Discussion Papers 5337, C.E.P.R. Discussion Papers.
  12. Tyers,Rod & Anderson,Kym, 2011. "Disarray in World Food Markets," Cambridge Books, Cambridge University Press, number 9780521172318, October.
  13. Kym Anderson, 2010. "Global Distortions to Agricultural Markets: New Indicators of Trade and Welfare Impacts, 1960 to 2007," Centre for International Economic Studies Working Papers 2010-03, University of Adelaide, Centre for International Economic Studies.
  14. Kee, Hiau Looi & Nicita, Alessandro & Olarreaga, Marcelo, 2006. "Estimating Trade Restrictiveness Indices," CEPR Discussion Papers 5576, C.E.P.R. Discussion Papers.
  15. Teresa Serra & David Zilberman & Barry K. Goodwin & Allen Featherstone, 2006. "Effects of decoupling on the mean and variability of output," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(3), pages 269-288, September.
  16. Valdés, Alberto & Zietz, Joachim A., 1980. "Agricultural protection in OECD countries: its cost to less-developed countries," Research reports 21, International Food Policy Research Institute (IFPRI).
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  1. > Agricultural Economics > Agricultural Policy

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