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Agricultural Distortion Patterns Since the 1950s: What Needs Explaining?


  • Kym Anderson

    () (School of Economics, University of Adelaide)

  • Johanna Croser

    () (School of Economics, University of Adelaide)

  • Damiano Sandri

    () (International Monetary Fund)

  • Ernesto Valenzuela

    () (School of Economics, University of Adelaide)


This paper summarizes a new database that sheds light on the impact of trade-related policy developments over the past half century on distortions to agricultural incentives and thus also to consumer prices for food in 75 countries spanning the per capita income spectrum. Price-support policies of advanced economies hurt not only domestic consumers and exporters of other products but also foreign producers and traders of farm products, and they reduce national and global economic welfare. On the other hand, the governments of many developing countries have directly taxed their farmers over the past half-century, both directly (e.g., export taxes) and also indirectly via overvaluing their currency and restricting imports of manufactures. Thus the price incentives facing farmers in many developing countries have been depressed by both own-country and other countriesÂ’ agricultural price and international trade policies. We summarize these and realted stylized facts that can be drawn from a new World Bank database that is worthy of the attention of political economy theorists, historians and econometricians. These indicators can be helpful in addressing such questions as the following: Where is there still a policy bias against agricultural production? To what extent has there been overshooting in the sense that some developing-country food producers are now being protected from import competition along the lines of the examples of earlier-industrializing Europe and Japan? What are the political economy forces behind the more-successful reformers, and how do they compare with those in less-successful countries where major distortions in agricultural incentives remain? And what explains the pattern of distortions across not only countries but also industries and in the choice of support or tax instruments within the agricultural sector of each country?

Suggested Citation

  • Kym Anderson & Johanna Croser & Damiano Sandri & Ernesto Valenzuela, 2010. "Agricultural Distortion Patterns Since the 1950s: What Needs Explaining?," Centre for International Economic Studies Working Papers 2010-13, University of Adelaide, Centre for International Economic Studies.
  • Handle: RePEc:adl:cieswp:2010-13

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    References listed on IDEAS

    1. Hayami, Yujiro, 2005. "An Emerging Agricultural Problem in High-Performing Asian Economies," Miscellaneous Papers 11826, Agecon Search.
    2. Sandri, Damiano & Valenzuela, Ernesto & Anderson, Kym, 2007. "Economic And Trade Indicators For Asia, 1960 To 2004," Agricultural Distortions Working Paper 48435, World Bank.
    3. Anderson, Kym & Martin, Will & Valenzuela, Ernesto, 2006. "The relative importance of global agricultural subsidies and market access," World Trade Review, Cambridge University Press, vol. 5(03), pages 357-376, November.
    4. Johnson, D. Gale, 1987. "World Agriculture In Disarray Revisited," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 31(02), August.
    5. Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Measuring distortions to agricultural incentives, revisited," World Trade Review, Cambridge University Press, vol. 7(04), pages 675-704, October.
    6. De Gorter, Harry & Swinnen, Johan, 2002. "Political economy of agricultural policy," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 36, pages 1893-1943 Elsevier.
    7. Kym Anderson & Johan Swinnen, 2008. "Distortions to Agricultural Incentives in Europe's Transition Economies," World Bank Publications, The World Bank, number 6502, June.
    8. Kym Anderson & Peter Lloyd & Donald Maclaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 461-482, December.
    9. Anderson, Kym & Martin, William J. & Valenzuela, Ernesto, 2007. "Long Run Implications of WTO Accession for Agriculture in China," China's Agricultural Trade: Issues and Prospects Symposium, July 2007, Beijing, China 55025, International Agricultural Trade Research Consortium.
    10. Kemal Dervis & Jaime de Melo & Sherman Robinson, 2015. "A General Equilibrium Analysis Of Foreign Exchange Shortages In A Developing Economy," World Scientific Book Chapters,in: Modeling Developing Countries' Policies in General Equilibrium, chapter 4, pages 71-86 World Scientific Publishing Co. Pte. Ltd..
    11. Anderson, Kym, 1995. "Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 43(2), pages 401-423, January.
    12. Anderson, Kym & Croser, Johanna L. & Lloyd, Peter J, 2009. "Global Distortions to Agricultural Markets: New Indicators of Trade and Welfare Impacts, 1955 to 2007," CEPR Discussion Papers 7160, C.E.P.R. Discussion Papers.
    13. Pardey, Philip G. & James, Jennifer S. & Alston, Julian M. & Wood, Stanley & Koo, Bonwoo & Binenbaum, Eran & Hurley, Terrance M. & Glewwe, Paul & Mayer, Jorge & Jones, Richard & De Groote, Hugo & Kana, 2007. "Science, Technology and Skills," Reports 136256, University of Minnesota, International Science and Technology Practice and Policy.
    14. 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 152, International Food Policy Research Institute (IFPRI).
    15. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications, The World Bank, number 2611, June.
    16. Valenzuela, Ernesto & Wong, Sara & Sandri, Damiano, 2007. "Distortions to Agricultural Incentives in Ecuador," Agricultural Distortions Working Paper 48394, World Bank.
    17. 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, July.
    18. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications, The World Bank, number 9436.
    19. Kym Anderson & William A. Masters, 2009. "Distortions to Agricultural Incentives in Africa," World Bank Publications, The World Bank, number 2607.
    20. Keijiro Otsuka & Takashi Yamano, 2006. "Introduction to the special issue on the role of nonfarm income in poverty reduction: evidence from Asia and East Africa," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 393-397, November.
    21. Huang, Jikun & Rozelle, Scott & Martin, William J. & Liu, Yu, 2007. "Distortions to Agricultural Incentives in China," Agricultural Distortions Working Paper 48478, World Bank.
    22. 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, vol. 2(3), pages 255-271, September.
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    Cited by:

    1. Jan Fałkowski & Alessandro Olper, 2014. "Political competition and policy choices: the evidence from agricultural protection," Agricultural Economics, International Association of Agricultural Economists, vol. 45(2), pages 143-158, March.
    2. Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
    3. Gawande, Kishore & Hoekman, Bernard, 2009. "Why Governments Tax or Subsidize Trade: Evidence from Agriculture," Agricultural Distortions Working Paper 50300, World Bank.
    4. Anderson, Kym, 2009. "Krueger/Schiff/Valdés Revisited: Agricultural Price and Trade Policy Reform in Developing Countries since 1960," CEPR Discussion Papers 7601, C.E.P.R. Discussion Papers.
    5. Christophe Gouel, 2014. "Food Price Volatility and Domestic Stabilization Policies in Developing Countries," NBER Chapters,in: The Economics of Food Price Volatility, pages 261-306 National Bureau of Economic Research, Inc.
    6. Shifa, Abdulaziz B., 2011. "Poor rural land property rights as a manifestation of urban bias," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116002, European Association of Agricultural Economists.
    7. Anderson, Kym, 2009. "Political Economy of Distortions to Agricultural Incentives: Introduction and Summary," Agricultural Distortions Working Paper 50306, World Bank.

    More about this item


    Political economy; agricultural price and trade policies;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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