IDEAS home Printed from https://ideas.repec.org/p/pas/papers/2023-03.html

The relative importance of global agricultural subsidies and tariffs, revisited

Author

Listed:
  • Kym Anderson
  • Erwin Corong
  • Anna Strutt
  • Ernesto Valenzuela

Abstract

Over the past three decades, tariff protection to farmers has fallen and partly been replaced by domestic support, whilst support for farmers in some emerging economies has grown. Against that backdrop, this paper provides new estimates of national economic impacts of global agricultural tariffs and domestic supports. Using the latest global economywide GTAP (Global Trade Analysis Project) model calibrated to 2017, we simulate (a) the removal of food and agricultural domestic supports and agri-food tariffs and (b) the removal also of tariffs on imports of non-agricultural goods. We find that agricultural support policies are still an important part of the global welfare cost of all goods trade-restrictive policies (albeit only half as costly as in 2001), and tariffs still dominate the global welfare cost of all farm-support programs. That farm support could be re-instrumented to relieve natural resource and environmental stresses, boost food and nutrition security, and alleviate poverty and income inequality.

Suggested Citation

  • Kym Anderson & Erwin Corong & Anna Strutt & Ernesto Valenzuela, 2023. "The relative importance of global agricultural subsidies and tariffs, revisited," Departmental Working Papers 2023-03, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2023-03
    as

    Download full text from publisher

    File URL: https://crawford.anu.edu.au/sites/default/files/2025-02/acde_td_anderson_et_al_2023_03.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    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. 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.
    3. Kym Anderson & Will Martin, 2005. "Agricultural Trade Reform and the Doha Development Agenda," The World Economy, Wiley Blackwell, vol. 28(9), pages 1301-1327, September.
    4. Kym Anderson & Ernesto Valenzuela, 2021. "What impact are subsidies and trade barriers abroad having on Australasian and Brazilian agriculture?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 265-290, April.
    5. Angel Aguiar & Maksym Chepeliev & Erwin Corong & Dominique van der Mensbrugghe, 2022. "The Global Trade Analysis Project (GTAP) Data Base: Version 11," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 7(2), pages 1-37, December.
    6. Terrie Walmsley & Anna Strutt, 2021. "A Comparison of Approaches to Modelling Non-Tariff Measures," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 6(1), pages 1-33, June.
    7. 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.
    8. Kirsten Boysen‐Urban & Martina Brockmeier & Hans G. Jensen & Ole Boysen, 2020. "Measuring the Trade Restrictiveness of Domestic Support using the EU Common Agricultural Policy as an Example," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(1), pages 27-49, February.
    9. Sven Wunder & Jan Börner & Driss Ezzine-de-Blas & Sarah Feder & Stefano Pagiola, 2020. "Payments for Environmental Services: Past Performance and Pending Potentials," Annual Review of Resource Economics, Annual Reviews, vol. 12(1), pages 209-234, October.
    10. 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.
    11. Robert T. Jensen & Nolan H. Miller, 2011. "Do Consumer Price Subsidies Really Improve Nutrition?," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1205-1223, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Riaan Rossouw & Martin Cameron & Wim Naudé, 2026. "Beyond Retaliation: South Africa Can Effectively Counter Trump's Trade Shocks," CeBER Working Papers 2026-01, Centre for Business and Economics Research (CeBER), University of Coimbra.
    2. Wang, Rongbo & Yu, Wusheng & Cao, Lijuan & Li, Tianxiang & Zhu, Jing, 2026. "Domestic and international implications of reorienting China’s meat and feed import policies through unilateral liberalization," Food Policy, Elsevier, vol. 138(C).
    3. Kym Anderson & Roehlano Briones, 2025. "Philippines agricultural protection and insulation in international perspective," Departmental Working Papers 2025-12, The Australian National University, Arndt-Corden Department of Economics.
    4. M. Javed Idrisi & Ruchi Gupta & Ramapati Maurya & Kushal Lalwani & Dawit Beza, 2025. "Modeling the dynamics of Indian exports, US tariffs, and competitiveness," Future Business Journal, Springer, vol. 11(1), pages 1-16, December.

    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. Anderson, Kym, 2022. "Trade-related food policies in a more volatile climate and trade environment," Food Policy, Elsevier, vol. 109(C).
    2. Kym Anderson, 2016. "Agricultural Trade, Policy Reforms, and Global Food Security," Palgrave Studies in Agricultural Economics and Food Policy, Palgrave Macmillan, number 978-1-137-46925-0, March.
    3. Kym Anderson & Ernesto Valenzuela, 2021. "What impact are subsidies and trade barriers abroad having on Australasian and Brazilian agriculture?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 265-290, April.
    4. Kym Anderson, 2021. "Food policy in a more volatile climate and trade environment," Departmental Working Papers 2021-25, The Australian National University, Arndt-Corden Department of Economics.
    5. Kym Anderson & Anna Strutt, 2023. "From re-instrumenting to re-purposing farm support policies," Departmental Working Papers 2023-04, The Australian National University, Arndt-Corden Department of Economics.
    6. Wagener, Andreas & Zenker, Juliane, 2018. "Decoupled but not neutral: The effects of stochastic transfers on investment and incomes in rural Thailand," TVSEP Working Papers wp-008, Leibniz Universitaet Hannover, Institute for Environmental Economics and World Trade, Project TVSEP.
    7. Ernesto Valenzuela & Kym Anderson & Dominique van der Mensbrugghe, 2009. "Welfare and Poverty Effects of Global Agricultural and Trade Policies Using the Linkage Model," World Bank Publications - Reports 28155, The World Bank Group.
    8. Will Martin & Kym Anderson, 2007. "The Doha agenda and agricultural trade reform: the role of economic analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 37(s1), pages 77-87, December.
    9. Kym Anderson & Ernesto Valenzuela, 2007. "Do Global Trade Distortions Still Harm Developing Country Farmers?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(1), pages 108-139, April.
    10. Kym Anderson, 2022. "Structural transformation in growing open economies: Australia s experience," Departmental Working Papers 2022-13, The Australian National University, Arndt-Corden Department of Economics.
    11. Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006. "Doha Merchandise Trade Reform: What Is at Stake for Developing Countries?," The World Bank Economic Review, World Bank, vol. 20(2), pages 169-195.
    12. Will Martin & Kym Anderson, 2008. "Agricultural trade reform under the Doha Agenda: some key issues ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), pages 1-16, March.
    13. Anderson, Kym & Valenzuela, Ernesto, 2006. "WTO's Doha Cotton Initiative: A Tale of Two Issues," CEPR Discussion Papers 5567, Centre for Economic Policy Research.
    14. Andreas Wagener & Juliane Zenker, 2021. "Decoupled but Not Neutral: The Effects of Counter‐Cyclical Cash Transfers on Investment and Incomes in Rural Thailand†," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1637-1660, October.
    15. Tadesse, Getaw & Badiane, Ousmane, 2018. "Determinants of African agricultural exports," IFPRI book chapters, in: Africa agriculture trade monitor 2018, chapter 5, pages 85-109, International Food Policy Research Institute (IFPRI).
    16. Kenneth Reinert, 2007. "The European Union, the Doha Round, and Asia," Asia Europe Journal, Springer, vol. 5(3), pages 317-330, September.
    17. Pierre Boulanger & Kirsten Boysen-Urban & George Philippidis, 2021. "European Union Agricultural Support ‘Coupling’ in Simulation Modelling: Measuring the Sustainability Impacts," Sustainability, MDPI, vol. 13(6), pages 1-17, March.
    18. Romain Perez & Mustapha Sadni Jallab, 2009. "Preference erosion and market access liberalization: the African dilemma in multilateral negotiations on agriculture," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(2), pages 277-292, July.
    19. Stephen Tokarick, 2008. "Dispelling Some Misconceptions about Agricultural Trade Liberalization," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 199-216, Winter.
    20. Koopman, Robert B. & Tsigas, Marinos, 2025. "US trade conflict: Potential economic implications for the US and the global economy," Journal of Policy Modeling, Elsevier, vol. 47(4), pages 785-804.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • 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

    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:pas:papers:2023-03. See general information about how to correct material in RePEc.

    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: Prema-chandra Athukorala (email available below). General contact details of provider: https://edirc.repec.org/data/asanuau.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.