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Evaluating Poverty Impacts of Globalization and Trade Policy Changes on Agricultural Producers

  • Valenzuela, Ernesto
  • Hertel, Thomas W.
  • Ivanic, Maros
  • Nin Pratt, Alejandro

The poverty effects and in particular the impact of trade liberalization on smallholder livestock producers in African and South East Asian developing countries (Malawi, Zambia, Uganda, Mozambique, Vietnam, Bangladesh, Indonesia, and Philippines) is addressed by disaggregating income sources within agriculture into earnings from crop and livestock production. Given that livestock production in our developing country sample is a marginal activity with very little concentration households are stratified according to a small dependence on livestock earnings, and thus separating them from crops specialized earnings households, households who are wage labor specialized, transfer dependent households, and diversified households. We combine a macro-economic framework based on a Computable General Equilibrium global model, with a micro-economic follow-up simulation drawing on information contained in eight countries’' household surveys. In the assessment of poverty impacts of global trade liberalization we find significant cross-country differences between the short and long run. For all countries in our sample, with the exception of Philippines in the short run and Zambia in the long run (no change), the national headcount measure of poverty is reduced after trade liberalization. We provide an in-depth look at poverty changes in one of these economies – Malawi – where a substantial portion of the population is engaged in small-holder agriculture. The differential effects by stratum and the distributional welfare impact along the income distribution constitute a significant resource for policy makers concerned about the impact of trade liberalization on the agriculture sector and more specifically on livestock activities.

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File URL: http://purl.umn.edu/20242
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2004 Annual meeting, August 1-4, Denver, CO with number 20242.

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Date of creation: 2004
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Handle: RePEc:ags:aaea04:20242
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  3. Thomas W. Hertel & Maros Ivanic & Paul V. Preckel & John A.L. Cranfield & Will Martin, 2003. "Short- versus Long-Run Implications of Trade Liberalization for Poverty in Three Developing Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1299-1306.
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  10. Mistiaen, Johan A. & Ravallion, Martin, 2003. "Survey compliance and the distribution of income," Policy Research Working Paper Series 2956, The World Bank.
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  14. William R. Cline, 2004. "Trade Policy and Global Poverty," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 379, May.
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  16. Hertel, Thomas W. & Maros Ivanic & Paul Preckel & John Cranfield, 2004. "The Earnings Effects of Multilateral Trade Liberalization: Implications for Poverty in Developing Countries," GTAP Working Papers 1208, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  17. Cranfield, J. A. L. & Preckel, Paul V. & Eales, James S. & Hertel, Thomas W., 2004. "Simultaneous estimation of an implicit directly additive demand system and the distribution of expenditure--an application of maximum entropy," Economic Modelling, Elsevier, vol. 21(2), pages 361-385, March.
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