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Feasibility of Reducing Agricultural Protection: Implications for Farm Households

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  • Gehlhar, Mark
  • Wainio, John

Abstract

A special purpose version of the standard GTAP model is used to assess how reducing global agricultural protection affects farm households. The modified version of the model, nicknamed GTAP-AGR, is specifically tailored to include more realistic features of the food and farm economy. The purpose of this paper is to demonstrate how this model, in comparison with the standard GTAP model, promotes better understanding of how policy might affect the farm household. Major modifications include the segmentation of agricultural factor markets from nonagricultural markets, improved food demand, and incorporation of an explicit farm household. A comparison of results from the GTAP and GTAP-AGR models shows substantial difference in returns to land under a scenario reducing global tariffs. Real farm household income depends not only on the country’s traded share of food output, but the share of household’s income derived from farm activity. Farm and non-farm sources of income have implications for gains accruing to the farm household in both developed and developing countries.

Suggested Citation

  • Gehlhar, Mark & Wainio, John, 2004. "Feasibility of Reducing Agricultural Protection: Implications for Farm Households," Conference papers 331293, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331293
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