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Distorted Agricultural Incentives and Economic Development: Asia?s Experience

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  • Anderson, Kym

Abstract

Earnings from farming in many low-income countries have been depressed by a pro-urban bias in own-country policies, as well as by governments of richer countries favoring their farmers with import barriers and subsidies. Both sets of policies reduce national and global economic welfare. The rapid development of many Asian emerging economies has been accompanied by a gradual reduction in their anti-agricultural policies, but many distortions remain and some countries have moved from negative to positive assistance for farmers, following the earlier examples of first Japan and then Korea and Taiwan. Drawing on results from a new multi-country research project, this paper examines the extent of these changes relative to those of other developing countries over the past five decades. It concludes by pointing to prospects for further policy reform in Asia.

Suggested Citation

  • Anderson, Kym, 2008. "Distorted Agricultural Incentives and Economic Development: Asia?s Experience," CEPR Discussion Papers 6914, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6914
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    1. 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.
    2. Kym Anderson & Johan Swinnen, 2008. "Distortions to Agricultural Incentives in Europe's Transition Economies," World Bank Publications - Books, The World Bank Group, number 6502, December.
    3. Kym Anderson & William A. Masters, 2009. "Distortions to Agricultural Incentives in Africa," World Bank Publications - Books, The World Bank Group, number 2607, December.
    4. Huang, Jikun & Rozelle, Scott & Martin, William J. & Liu, Yu, 2007. "Distortions to Agricultural Incentives in China," Agricultural Distortions Working Paper Series 48478, World Bank.
    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.
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    8. Anderson, Kym & Martin, William J. & Valenzuela, Ernesto, 2007. "Long Run Implications of WTO Accession for Agriculture in China," 2007: China's Agricultural Trade: Issues and Prospects Symposium, July 2007, Beijing, China 55025, International Agricultural Trade Research Consortium.
    9. Anderson, Kym & Tyers, Rod, 1992. "Japanese rice policy in the interwar period: Some consequences of imperial self sufficiency," Japan and the World Economy, Elsevier, vol. 4(2), pages 103-127, September.
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    11. World Bank, 2008. "World Development Indicators 2008," World Bank Publications - Books, The World Bank Group, number 11855, December.
    12. 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.
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    14. Lopez, Ramon & Galinato, Gregmar I., 2007. "Should governments stop subsidies to private goods? Evidence from rural Latin America," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1071-1094, June.
    15. Anderson, Kym & Valdes, Alberto, 2008. "Distortions to Agricultural Incentives in Latin America and the Caribbean," Agricultural Distortions Working Paper Series 48575, World Bank.
    16. Valenzuela, Ernesto & Croser, Johanna L. & Jara, Esteban & Nelgen, Signe & Anderson, Kym, 2008. "Annual Estimates Of Distortions To Agricultural Incentives In High-Income Countries," Agricultural Distortions Working Paper Series 48632, World Bank.
    17. Kym Anderson, 1994. "Food Price Policy in East Asia," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 8(2), pages 15-30, November.
    18. 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.
    19. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
    20. Chen, Shaohua & Ravallion, Martin, 2007. "Absolute poverty measures for the developing world, 1981-2004," Policy Research Working Paper Series 4211, The World Bank.
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    24. 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).
    25. Shenggen Fan & Peter Hazell, 2001. "Returns to Public Investments in the Less-Favored Areas of India and China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1217-1222.
    26. Anderson, Kym & Lattimore, Ralph G. & Lloyd, Peter J. & MacLaren, Donald, 2007. "Distortions to Agricultural Incentives in Australia and New Zealand," 2007 Conference (51st), February 13-16, 2007, Queenstown, New Zealand 10407, Australian Agricultural and Resource Economics Society.
    27. Anderson, Kym, 2009. "Five Decades of Distortions to Agricultural Incentives," Agricultural Distortions Working Paper Series 48742, World Bank.
    28. Kym Anderson & Alberto Valdés, 2008. "Distortions to Agricultural Incentives in Latin America," World Bank Publications - Books, The World Bank Group, number 6604, December.
    29. Lloyd, P. J., 1974. "A more general theory of price distortions in open economies," Journal of International Economics, Elsevier, vol. 4(4), pages 365-386, November.
    30. von Braun, Joachim, 2007. "The world food situation: New driving forces and required actions," Food policy reports 18, International Food Policy Research Institute (IFPRI).
    31. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications - Books, The World Bank Group, number 2611, December.
    32. Valenzuela, Ernesto & Wong, Sara & Sandri, Damiano, 2007. "Distortions to Agricultural Incentives in Ecuador," Agricultural Distortions Working Paper Series 48394, World Bank.
    33. 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.
    34. World Bank, 2008. "World Development Indicators 2008," World Bank Publications - Books, The World Bank Group, number 28241, December.
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    Cited by:

    1. Cornelius Hirsch & Harald Oberhofer, 2017. "Bilateral Trade Agreements and Trade Distortions in Agricultural Markets," FIW Working Paper series 176, FIW.
    2. 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.
    3. Thai Thi Minh & Carsten Nico Hjotrsø, 2015. "Relational dynamics in the multi-helices knowledge production system: A new institutionalism perspective," Globelics Working Paper Series 2015-08, Globelics - Global Network for Economics of Learning, Innovation, and Competence Building Systems, Aalborg University, Department of Business and Management.
    4. Lodovico Muratori & Susanne Fricke, 2017. "Spatial price transmission and trade policies: new evidence for agricultural products from selected sub-Saharan African countries with high frequency data," Jena Economics Research Papers 2017-006, Friedrich-Schiller-University Jena.
    5. Desai, Raj M. & Rudra, Nita, 2019. "Trade, poverty, and social protection in developing countries," European Journal of Political Economy, Elsevier, vol. 60(C).
    6. Raj M. Desai & Nita Rudra, 2016. "Trade, poverty, and social protection in developing countries," WIDER Working Paper Series wp-2016-139, World Institute for Development Economic Research (UNU-WIDER).
    7. Jacob R. Fooks & Steven J. Dundas & Titus O. Awokuse, 2013. "Are There Efficiency Gains from the Removal of Natural Resource Export Restrictions? Evidence from British Columbia," The World Economy, Wiley Blackwell, vol. 36(8), pages 1098-1114, August.
    8. Miho Shirotori & Bolormaa Tumurchudur & Olivier Cadot, 2010. "Revealed Factor Intensity Indices at the Product Level," UNCTAD Blue Series Papers 44, United Nations Conference on Trade and Development.
    9. Anderson, Kym & Strutt, Anna, 2012. "The changing geography of world trade: Projections to 2030," Journal of Asian Economics, Elsevier, vol. 23(4), pages 303-323.
    10. Anderson, Kym & Strutt, Anna, 2014. "Food security policy options for China: Lessons from other countries," Food Policy, Elsevier, vol. 49(P1), pages 50-58.
    11. Lars Brink, 2009. "WTO Constraints on Domestic Support in Agriculture: Past and Future," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(1), pages 1-21, March.
    12. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications - Books, The World Bank Group, number 2611, December.
    13. Barker, Tom & Üngör, Murat, 2019. "Vietnam: The next asian Tiger?," The North American Journal of Economics and Finance, Elsevier, vol. 47(C), pages 96-118.
    14. Valenzuela, Ernesto & Anderson, Kym, 2011. "Climate change and food security to 2030: a global economy-wide perspective," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 11(01), pages 1-30, November.
    15. You-Hua CHEN & Jun-Yi WAN & Chan WANG, 2015. "Agricultural subsidy with capacity constraints and demand elasticity," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 61(1), pages 39-49.
    16. Anderson, Kym & Martin, William J., 2008. "Distortions to Agricultural Incentives in China and Southeast Asia," Agricultural Distortions Working Paper Series 48574, World Bank.
    17. Kym Anderson & Anna Strutt, 2014. "Growth in Densely Populated Asia: Implications for Primary Product Exporters," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(1), pages 112-126, January.
    18. Grabowski, Richard & Self, Sharmistha, 2017. "The development of manufacturing: Unintended consequence," Journal of Asian Economics, Elsevier, vol. 52(C), pages 1-11.
    19. Ernesto Valenzuela & Kym Anderson, 2011. "Projecting the World Economy to 2050: Agriculture in the Economy-wide GTAP Model," Centre for International Economic Studies Working Papers 2011-01, University of Adelaide, Centre for International Economic Studies.
    20. Richard Grabowski and Sharmistha Self, 2019. "Structural Change and the Intersectoral Terms of Trade: Southeast Asian Experience," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 44(2), pages 29-47, June.
    21. Thi Thu Hang NGO & Huu Cuong TRAN & Hossein AZADI & Philippe LEBAILLY, 2016. "Aquaculture Land-Use Policy: The Case of Clam Farming in Thaibinh Province, Vietnam," Sustainability, MDPI, vol. 8(12), pages 1-12, December.
    22. Raj M. Desai & Nita Rudra, 2016. "Trade, poverty, and social protection in developing countries," WIDER Working Paper Series 139, World Institute for Development Economic Research (UNU-WIDER).
    23. Anderson, Kym & Strutt, Anna, 2012. "Asia?s Growth, the Changing Geography of World Trade, and Food Security: Projections to 2030," CEPR Discussion Papers 8950, C.E.P.R. Discussion Papers.
    24. Andersson, Martin & Rohne Till, Emelie, 2017. "Between the Engine and the Fifth Wheel: An Analytical Survey of the Shifting Roles of Agriculture in Development Theory," Lund Papers in Economic History 163, Lund University, Department of Economic History.
    25. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2012. "Estimating effects of price-distorting policies using alternative distortions databases," Conference papers 332172, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    Keywords

    Agricultural and trade policy reforms; Asian agricultural development; Distorted incentives;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • 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; Animal Welfare Policy

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