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Agricultural Price Distortions: Trends and Volatility, Past and Prospective

  • Anderson, Kym

For decades, earnings from farming in many developing countries have been depressed by a pro-urban bias in own-country policies, as well as by governments of richer countries favouring their farmers with import barriers and subsidies. Both sets of policies reduced global economic welfare and agricultural trade, and almost certainly added to global inequality and poverty. Progress has been made over the past three decades in reducing agricultural protection in high-income countries and agricultural disincentives in developing countries, but the propensity of governments to insulate their domestic food market from fluctuations in international prices has not waned. Both food-importing and food-exporting countries engage in insulating behaviour, which contributes to the amplification of international food price fluctuations yet does little to advance their national food security. Thus much scope still remains to improve economic welfare and to reduce poverty by removing remaining trade distortions. This paper summarizes indicators of these trends and fluctuations in farm trade barriers before examining what unilateral or multilateral trade arrangements, together with complementary domestic measures, could help advance global food security.

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Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 125692.

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Date of creation: 15 Jun 2012
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Handle: RePEc:ags:iaae12:125692
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