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Distributional effects of WTO agricultural reforms in rich and poor countries

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  • Hertel, Thomas W.
  • Keeney, Roman
  • Ivanic, Maros
  • Winters, L. 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. The authors'findings reject this claim. The analysis uses detailed data on farm incomes to show that major commodity programs are highly regressive in the United States, and that theonly serious losses under trade reform are among large, wealthy farmers in a few heavily protected subsectors. In contrast, analysis using household data from 15 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 protect U.S. large farms from most of the rigors of adjustment. Finally, the analysis indicates that maximal trade-led poverty reductions occur when developing countries participate more fully in agricultural trade liberalization.

Suggested Citation

  • Hertel, Thomas W. & Keeney, Roman & Ivanic, Maros & Winters, L. Alan, 2006. "Distributional effects of WTO agricultural reforms in rich and poor countries," Policy Research Working Paper Series 4060, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4060
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    Cited by:

    1. 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).
    2. Douillet, Mathilde, 2012. "Trade policies and agricultural exports of Sub-Saharan African countries: Some stylized facts and perspectives," MPRA Paper 40962, University Library of Munich, Germany.
    3. Hess, Sebastian & Cramon-Taubadel, Stephan von & Sperlich, 2010. "Numbers for Pascal: Explaining differences in the Estimated Benefited of the Doha Developing Agenda," 54th Annual Conference, Goettingen, Germany, September 17-19, 2014 187311, German Association of Agricultural Economists (GEWISOLA).
    4. Hess, Sebastian & Cramon-Taubadel, Stephan von & Sperlich, 2010. "Numbers for Pascal: Explaining differences in the Estimated Benefited of the Doha Developing Agenda," Department of Agricultural and Rural Development (DARE) Discussion Papers 187311, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).
    5. 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).
    6. Jayne, T.S. & Mather, David & Mghenyi, Elliot, 2010. "Principal Challenges Confronting Smallholder Agriculture in Sub-Saharan Africa," World Development, Elsevier, vol. 38(10), pages 1384-1398, October.
    7. Keeney, Roman & Beckman, Jayson F., 2007. "WTO Impacts on US Rice Producing Households," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34812, Southern Agricultural Economics Association.

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    Keywords

    Rural Poverty Reduction; Economic Theory&Research; Population Policies; Achieving Shared Growth;
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