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Distributional Effects of WTO Agricultural Reforms in Rich and Poor Countries

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  • Hertel, Thomas
  • Keeney, Roman
  • Ivanic, Maros
  • Winters, Alan

Abstract

Rich countries’ agricultural trade policies are the battleground on which the future of the WTO’s troubled Doha Round will be determined. Subject to widespread criticism, they nonetheless appear to be almost immune to serious reform, and one of their most common defenses is that they protect poor farmers. Our findings reject this claim. The analysis conducted here uses detailed data on farm incomes to show that major commodity programs are highly regressive in the USA, and that the only serious losses under trade reform are among large, wealthy, farmers in a few heavily protected subsectors. In contrast, analysis using household data from fifteen developing countries indicates that reforming rich countries’ agricultural trade policies would lift large numbers of developing country farm households out of poverty. In the majority of cases these gains are not outweighed by the poverty-increasing effects of higher food prices among other households. Agricultural reforms that appear feasible, even under an ambitious Doha Round, achieve only a fraction of the benefits for developing countries that full liberalization promises, but protects US large farms from most of the rigors of adjustment. Finally, the analysis conducted here indicates that maximal trade-led poverty reductions occur when developing countries participate more fully in agricultural trade liberalization.

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  • Hertel, Thomas & Keeney, Roman & Ivanic, Maros & Winters, Alan, 2006. "Distributional Effects of WTO Agricultural Reforms in Rich and Poor Countries," GTAP Working Papers 2185, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  • Handle: RePEc:gta:workpp:2185
    Note: GTAP Working Paper No. 33
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    Cited by:

    1. Hertel, Thomas, 2013. "Global Applied General Equilibrium Analysis Using the Global Trade Analysis Project Framework," Handbook of Computable General Equilibrium Modeling, Elsevier.
    2. repec:eee:wdevel:v:108:y:2018:i:c:p:1-15 is not listed on IDEAS
    3. Thomas W. Hertel & Roman Keeney & Maros Ivanic & L. Alan Winters, 2015. "Why Isn't the Doha Development Agenda more Poverty Friendly?," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 18, pages 375-391 World Scientific Publishing Co. Pte. Ltd..
    4. Hess, Sebastian & Cramon-Taubadel, Stephan von & Sperlich, Stefan, 2010. "Numbers for Pascal: explaining differences in the estimated benefits of the Doha Development Agenda," DARE Discussion Papers 1001, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    5. Verma, Monika & Hertel, Thomas W., 2009. "Commodity Price Volatility and Nutrition Vulnerability," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49344, Agricultural and Applied Economics Association.
    6. Francesco Caracciolo & Fabio Gaetano Santeramo, 2013. "Price Trends and Income Inequalities: Will Sub-Saharan Africa Reduce the Gap?," African Development Review, African Development Bank, vol. 25(1), pages 42-54, March.
    7. Keeney, Roman & Beckman, Jayson, 2009. "WTO negotiations on agriculture and the distributional impacts for US rice farm households," Food Policy, Elsevier, vol. 34(1), pages 70-80, February.
    8. Todd Kuethe & Mitch Morehart, 2012. "The Agricultural Resource Management Survey: An information system for production agriculture," Agricultural Finance Review, Emerald Group Publishing, vol. 72(2), pages 191-200, July.
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    12. Hertel, Thomas W. & Keeney, Roman, 2009. "The Poverty Impacts of Global Commodity Trade Liberalization," Agricultural Distortions Working Paper 52786, World Bank.
    13. Deppermann, Andre & Offermann, Frank & Grethe, Harald, 2016. "Redistributive effects of CAP liberalisation: From the sectoral level to the single farm," Journal of Policy Modeling, Elsevier, vol. 38(1), pages 26-43.
    14. Diao, Xinshen & Fan, Shenggen & Headey, Derek & Johnson, Michael & Nin Pratt, Alejandro & Yu, Bingxin, 2008. "Accelerating Africa's food production in response to rising food prices: Impacts and requisite actions," IFPRI discussion papers 825, International Food Policy Research Institute (IFPRI).
    15. Balagtas, Joseph Valdes & Bhandari, Humnath & Mohanty, Samarendu & Cabrera, Ellanie & Hossain, Mahabub, 2012. "Impact of a Commodity Price Spike on Poverty Dynamics: Evidence from a Panel of Rural Households in Bangladesh," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124225, Australian Agricultural and Resource Economics Society.
    16. Aragie, Emerta & Pauw, Karl & Pernechele, Valentina, 2018. "Achieving food security and industrial development in Malawi: Are export restrictions the solution?," World Development, Elsevier, vol. 108(C), pages 1-15.
    17. Hess, Sebastian & von Cramon-Taubadel, Stephan, 2007. "Assessing general and partial equilibrium simulations of Doha round outcomes using meta-analysis," Center for European, Governance and Economic Development Research Discussion Papers 67, University of Goettingen, Department of Economics.
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