IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/15490.html
   My bibliography  Save this paper

What impact are subsidies and trade barriers abroad having on Australasian and Brazilian agriculture?

Author

Listed:
  • Anderson, Kym
  • Valenzuela, Ernesto

Abstract

This paper provides new estimates of the extent and economic effects of agricultural policies that provide domestic support or import protection to farmers in countries that compete in the global marketplace with unsubsidized farmers. Analyses earlier this century found that import market access barriers accounted for more than 90% of the global welfare cost of all assistance to farmers, with domestic support measures providing as little as 5%. Since then the share contributed by domestic support has grown greatly in some high-income and emerging economies, thanks to policy re-instrumentation. Using the latest version of the GTAP model and database of the global economy, this paper estimates the economic effects of direct farmer subsidies, and of the producer subsidy and consumer tax equivalents of farm trade policies, on farmers in three lightly assisting countries. The estimates adjusted for country size suggest the effects on agricultural exports, net farm income, and national economic welfare of such policies are far more adverse for Australia, Brazil and especially New Zealand than for the rest of the world, and that domestic supports abroad are much more important contributors to those losses now than they were at the start of this century.

Suggested Citation

  • Anderson, Kym & Valenzuela, Ernesto, 2020. "What impact are subsidies and trade barriers abroad having on Australasian and Brazilian agriculture?," CEPR Discussion Papers 15490, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:15490
    as

    Download full text from publisher

    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=15490
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tyers,Rod & Anderson,Kym, 2011. "Disarray in World Food Markets," Cambridge Books, Cambridge University Press, number 9780521172318.
    2. Bhaskar, Arathi & Beghin, John C., 2009. "How Coupled Are Decoupled Farm Payments? A Review of the Evidence," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(1), pages 1-24, April.
    3. Will Martin & Kym Anderson, 2006. "Agricultural Trade Reform and the Doha Development Agenda," World Bank Publications - Books, The World Bank Group, number 6889, December.
    4. Kym Anderson & William A. Masters, 2009. "Distortions to Agricultural Incentives in Africa," World Bank Publications - Books, The World Bank Group, number 2607, December.
    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(4), pages 675-704, October.
    6. Kym Anderson, 2009. "Distortions to Agricultural Versus Nonagricultural Producer Incentives," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 55-74, September.
    7. 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.
    8. Joseph P. Janzen & Nathan P. Hendricks, 2020. "Are Farmers Made Whole by Trade Aid?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(2), pages 205-226, June.
    9. 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.
    10. 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(3), pages 357-376, November.
    11. Anderson, Kym & Kurzweil, Marianne & Martin, William J. & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Methodology for Measuring Distortions to Agricultural Incentives," Agricultural Distortions Working Paper Series 48326, World Bank.
    12. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, March.
    13. Kym Anderson & Hans Grinsted Jensen & Signe Nelgen & Anna Strutt, 2016. "What is the Appropriate Counterfactual When Estimating Effects of Multilateral Trade Policy Reform?," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 764-778, September.
    14. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications - Books, The World Bank Group, number 9436, December.
    15. Rao, Xudong & Hurley, Terrance M. & Pardey, Philip G., 2019. "Are agricultural R&D returns declining and development dependent?," World Development, Elsevier, vol. 122(C), pages 27-37.
    16. Erwin Corong & Thomas Hertel & Robert McDougall & Marinos Tsigas & Dominique van der Mensbrugghe, 2017. "The Standard GTAP Model, version 7," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 2(1), pages 1-119, June.
    17. Anderson, Kym, 2009. "Political Economy of Distortions to Agricultural Incentives: Introduction and Summary," Agricultural Distortions Working Paper Series 50306, World Bank.
    18. Kym Anderson, 2010. "Krueger, Schiff, and Valdés Revisited: Agricultural Price and Trade Policy Reform in Developing Countries since 1960," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(2), pages 195-231.
    19. Anderson, Kym, 2009. "Five Decades of Distortions to Agricultural Incentives," Agricultural Distortions Working Paper Series 48742, World Bank.
    20. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications - Books, The World Bank Group, number 2611, December.
    21. Urban, Kirsten & Jensen, Hans G. & Brockmeier, Martina, 2016. "How decoupled is the Single Farm Payment and does it matter for international trade?," Food Policy, Elsevier, vol. 59(C), pages 126-138.
    22. Anderson, Kym & Swinnen, Johan F.M., 2009. "Distortions to Agricultural Incentives in Eastern Europe and Central Asia," Agricultural Distortions Working Paper Series 48624, World Bank.
    23. Angel Aguiar & Maksym Chepeliev & Erwin L. Corong & Robert McDougall & Dominique van der Mensbrugghe, 2019. "The GTAP Data Base: Version 10," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 4(1), pages 1-27, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    2. Kym Anderson & Ernesto Valenzuela, 2011. "Agricultural Policy as a Barrier to Global Economic Integration," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume III, chapter 11, Edward Elgar Publishing.
    3. Peter J. Lloyd & Johanna L. Croser & Kym Anderson, 2010. "Global Distortions to Agricultural Markets: Indicators of Trade and Welfare Impacts, 1960 to 2007," Review of Development Economics, Wiley Blackwell, vol. 14(2), pages 141-160, May.
    4. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2013. "Estimating Effects of Price-Distorting Policies Using Alternative Distortions Databases," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 877-931, Elsevier.
    5. Briones, Roehlano M. & Tolin, Lovely Ann C., 2015. "Options for Supporting Rice Farmers Under a Post-QR Regime: Review and Assessment," Research Paper Series DP 2015-46, Philippine Institute for Development Studies.
    6. Johan F. M. Swinnen, 2009. "The Growth of Agricultural Protection in Europe in the 19th and 20th Centuries," The World Economy, Wiley Blackwell, vol. 32(11), pages 1499-1537, November.
    7. Johanna L. Croser & Peter J. Lloyd & Kym Anderson, 2010. "How Do Agricultural Policy Restrictions on Global Trade and Welfare Differ Across Commodities?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(3), pages 698-712.
    8. Kym Anderson, 2009. "Distorted Agricultural Incentives and Economic Development: Asia's Experience," The World Economy, Wiley Blackwell, vol. 32(3), pages 351-384, March.
    9. Kym Anderson & Anna Strutt, 2016. "Impacts of Emerging Asia on African and Latin American Trade: Projections to 2030," The World Economy, Wiley Blackwell, vol. 39(2), pages 172-194, February.
    10. Czyżewski, Bazyli, 2016. "Political Rents of European Farmers in the Sustainable Development Paradigm. International, national and regional perspective," MPRA Paper 74253, University Library of Munich, Germany.
    11. Tangermann, Stefan, 2011. "Risk Management in Agriculture and the Future of the EU's Common Agricultural Policy," National Policies, Trade and Sustainable Development 320171, International Centre for Trade and Sustainable Development (ICTSD).
    12. Johan Swinnen & Alessandro Olper & Senne Vandevelde, 2021. "From unfair prices to unfair trading practices: Political economy, value chains and 21st century agri‐food policy," Agricultural Economics, International Association of Agricultural Economists, vol. 52(5), pages 771-788, September.
    13. Johnson, Michael & Dorosh, Paul, 2015. "Optimal Tariffs with Smuggling: A Spatial Analysis of Nigerian Rice Policy Options," 2015 Conference, August 9-14, 2015, Milan, Italy 211816, International Association of Agricultural Economists.
    14. Calum Brown & Dave Murray-Rust & Jasper van Vliet & Shah Jamal Alam & Peter H Verburg & Mark D Rounsevell, 2014. "Experiments in Globalisation, Food Security and Land Use Decision Making," PLOS ONE, Public Library of Science, vol. 9(12), pages 1-24, December.
    15. Garrone, Maria & Emmers, Dorien & Olper, Alessandro & Swinnen, Johan, 2019. "Jobs and agricultural policy: Impact of the common agricultural policy on EU agricultural employment," Food Policy, Elsevier, vol. 87(C), pages 1-1.
    16. Anderson, Kym & Valenzuela, Ernesto & van der Mensbrugghe, Dominique, 2009. "Welfare and Poverty Effects of Global Agricultural and Trade Policies Using the Linkage Model," Agricultural Distortions Working Paper Series 52785, World Bank.
    17. Poczta-Wajda, Agnieszka, 2014. "Assistance To Agriculture In Countries Of A Different Development Level And Trends In World Trade With Agricultural Products," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2014(6).
    18. Elena Briones Alonso & Jo Swinnen, 2015. "A value chain approach to measuring distortions to incentives and food policy effects (with application to Pakistan’s grain policy)," Working Papers of LICOS - Centre for Institutions and Economic Performance 493428, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
    19. Kym Anderson & Sundar Ponnusamy, 2019. "Structural Transformation to Manufacturing and Services: What Role for Trade?," Asian Development Review, MIT Press, vol. 36(2), pages 32-71, September.
    20. Giulia Meloni & Jo Swinnen, 2016. "Bugs, tariffs and colonies: the political economy of the wine trade 1860-1970," Working Papers of LICOS - Centre for Institutions and Economic Performance 556191, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.

    More about this item

    Keywords

    Agricultural trade distortions; domestic supports; farm subsidies; market access; Trade Negotiations;
    All these keywords.

    JEL classification:

    • 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
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • O56 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Oceania

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:15490. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.cepr.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.