Assistance to Agriculture in Countries of a Different Development Level and Trends in World Trade with Agricultural Products

The main aim of this paper is to overview the trends in assistance to agriculture both in developed and developing countries and to compare them with trends in food products trade to verify the hypothesis assuming that although the level of price distorting assistance to agriculture in high-income countries in last three decades has been decreasing, agricultural markets in these economies are not becoming more open for the food products from the developing countries. The empirical analysis is based on the World Bank database on estimates of distortions to agricultural incentives and on the World Integrated Trade Solution (WITS) software. Research results suggest that despite numerous policy reforms both in developed and developing countries, there is still a high rate of assistance to agriculture, especially in high-income economies. Although most of them lowered the price support for food products, it has been partly replaced by assistance decoupled from production. At the same time, some developing countries continue their anti-agricultural bias, but most of them ceased taxing the agricultural sector. What is more, share of developing economies in global food trade is increasing, this trend, however, results mainly from increasing intra-trade between developing economies and not from the liberalization of food markets in developed countries.