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Distortions to Agricultural Versus Nonagricultural Producer Incentives


  • Kym Anderson

    () (World Bank; CEPR; and School of Ecnomics, University of Adelaide, Adelaide SA 5005 Australia)


For more than a century, government policies have grossly distorted resource use in agriculture, both within and between countries. Earnings from farming in many developing countries have been depressed by a prourban bias in own-country policies as well as by governments of richer countries favoring their farmers with import barriers and subsidies. Both sets of policies reduce national and global economic welfare and inhibit economic growth; they also add to inequality and poverty in developing countries. Since the 1980s, however, numerous developing and some high-income country governments have reduced their sectoral and trade policy distortions. This paper draws on new empirical studies to show the changing extent of policy distortions to prices faced by the world's farmers since the 1950s. Modeling results provide an indication of how far those reforms proceeded between the early 1980s and 2004 and of how much scope remains for removing continuing inefficiencies in global agricultural resource use.

Suggested Citation

  • Kym Anderson, 2009. "Distortions to Agricultural Versus Nonagricultural Producer Incentives," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 55-74, September.
  • Handle: RePEc:anr:reseco:v:1:y::p:55-74

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    More about this item


    distorted farm prices; trade policy reforms; inefficient resource use;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy


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