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Agricultural Price Distortions: Trends and Volatility, Past and Prospective

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  • Kym Anderson

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Abstract

Historically, 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 added to global inequality and poverty. Over the past three decades, much progress has been made in reducing agricultural protection in high-income countries and agricultural disincentives in developing countries. However, plenty of price distortions remain. As well, the propensity of governments to insulate their domestic food market from fluctuations in international prices has not waned. Such insulation contributes to the amplification of international food price fluctuations, yet it does little to advance national food security when food-importing and food-exporting countries equally engage in insulating behaviour. Thus there is still much scope to improve global economic welfare via multilateral agreement not only to remove remaining trade distortions but also to desist from varying trade barriers when international food prices gyrate. This paper summarizes indicators of trends and fluctuations in farm trade barriers before examining unilateral or multilateral trade arrangements, together with complementary domestic measures, that could lead to better global food security outcomes.

Suggested Citation

  • Kym Anderson, 2013. "Agricultural Price Distortions: Trends and Volatility, Past and Prospective," Departmental Working Papers 2013-01, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:2013-01
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    References listed on IDEAS

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    Cited by:

    1. Will, Matthias Georg & Pies, Ingo, 2014. "Discourse and regulation failures: The ambivalent influence of NGOs on political organizations," Discussion Papers 2014-2, Martin Luther University of Halle-Wittenberg, Chair of Economic Ethics.
    2. Tedesco, Ilaria & Pelloni, Alessandra & Trovato, Giovanni, 0. "Oecd Agricultural Subsidies And Poverty Rates In Lower Income Countries," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3.
    3. Wenshou Yan, 2016. "Political Economy of Trade and Storage Policies Coordination, and the Role of Domestic Public Storage in the World Market," School of Economics Working Papers 2016-16, University of Adelaide, School of Economics.
    4. Orden, David, 2013. "The Changing Structure of Domestic Support and Its Implications for Trade," Commissioned Papers 146657, Canadian Agricultural Trade Policy Research Network.
    5. Kozicka, Marta & Kalkuhl, Matthias & Saini, Shweta & Brockhaus, Jan, 2014. "Modeling Indian Wheat and Rice Sector Policies," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169808, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Farmer protection; export taxation; food price spikes; trade policy history;

    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

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