The Historical Evolution of Alternative Metrics for Developing Countries’ Food and Agriculture Policy Assessment

The demand for quantitative assessments of the impacts of food and agricultural policies has grown steadily in the past four decades. From the application of social cost-benefit analysis to investments in developing countries in the 1970s to the use of increasingly sophisticated general equilibrium models today, the menu of available techniques for policy assessment has expanded rapidly. In addition, both partial and general equilibrium models have been developed to analyze world markets for agricultural commodities and the effects of government policies on such markets. Alongside the modeling of markets and the quantitative impact of policies, several indicators have been developed that build on trade policy measures, including effective protection and tariff equivalents. One example is the producer subsidy equivalent. This has been used by the OECD to estimate the level of support provided by government policies to the agricultural sector. The indicators have more recently been applied to developing countries as a form of benchmarking to give a snapshot of the transfers among stakeholders inherent in such policies.