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Measuring distortions to agricultural incentives, revisited

  • Anderson, Kym
  • Kurzweil, Marianne
  • Martin, Will
  • Sandri, Damiano
  • Valenzuela, Ernesto

Notwithstanding the tariffication component of the Uruguay Round Agreement on Agriculture, import tariffs on farm products continue to provide an incomplete indication of the extent to which agricultural producer and consumer incentives are distorted in national markets. Especially in developing countries, non-agricultural policies indirectly impact agricultural and food markets. Empirical analysis aimed at monitoring distortions to agricultural incentives thus need to examine both agricultural and non-agricultural policy measures including import or export taxes, subsidies and quantitative restrictions, plus domestic taxes or subsidies on farm outputs or inputs and consumer subsidies for food staples. This paper addresses the practical methodological issues that need to be faced when attempting to undertake such a measurement task in developing countries. The approach is illustrated in two ways: by presenting estimates of nominal and relative rates of assistance to farmers in China for the period 1981 to 2005; and by summarizing estimates from an economy-wide computable general equilibrium model of the effects on agricultural versus non-agricultural markets of the project's measured distortions globally as of 2004.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4612.

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Date of creation: 01 Apr 2008
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Handle: RePEc:wbk:wbrwps:4612
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  1. Ianchovichina, Elena & Martin, William, 2003. "Economic impacts of China's accession to the World Trade Organization," Policy Research Working Paper Series 3053, The World Bank.
  2. Anderson, Kym & Martin, William J., 2007. "Distortions to Agricultural Incentives in Asia," Agricultural Distortions Working Paper 48557, World Bank.
  3. 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.
  4. de Melo, Jaime & Robinson, Sherman, 1989. "Product differentiation and the treatment of foreign trade in computable general equilibrium models of small economies," Journal of International Economics, Elsevier, vol. 27(1-2), pages 47-67, August.
  5. Rausser, Gordon C, 1982. "Political economic markets: PERTS and PESTS in food and agriculture," CUDARE Working Paper Series 231, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  6. Anderson, Kym & Kurzweil, Marianne & Martin, William J. & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Methodology for Measuring Distortions to Agricultural Incentives," Agricultural Distortions Working Paper 48326, World Bank.
  7. Kiguel, Miguel & O'Connell, Stephen A, 1995. "Parallel Exchange Rates in Developing Countries," World Bank Research Observer, World Bank Group, vol. 10(1), pages 21-52, February.
  8. Anderson, Kym & Lloyd, Peter & MacLaren, Donald, 2008. "Distortions to agricultural incentives in Australia since world war II," Policy Research Working Paper Series 4471, The World Bank.
  9. 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(04), pages 675-704, October.
  10. Gulati, Ashok & Narayanan, Sudha, 2003. "The Subsidy Syndrome in Indian Agriculture," OUP Catalogue, Oxford University Press, number 9780195662061.
  11. Dervis, Kemal & de Melo, Jaime & Robinson, Sherman, 1981. "A General Equilibrium Analysis of Foreign Exchange Shortages in a Developing Economy," Economic Journal, Royal Economic Society, vol. 91(364), pages 891-906, December.
  12. Huang, Jikun & Rozelle, Scott & Martin, William J. & Liu, Yu, 2007. "Distortions to Agricultural Incentives in China," Agricultural Distortions Working Paper 48478, World Bank.
  13. Tarr, David G, 1990. "Second-Best Foreign Exchange Policy in the Presence of Domestic Price Controls and Export Subsidies," World Bank Economic Review, World Bank Group, vol. 4(2), pages 175-93, May.
  14. Martin, Will, 1993. "Modeling the post-reform Chinese economy," Journal of Policy Modeling, Elsevier, vol. 15(5-6), pages 545-579.
  15. 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).
  16. Krueger, Anne O & Schiff, Maurice & Valdes, Alberto, 1988. "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review, World Bank Group, vol. 2(3), pages 255-71, September.
  17. Shatz, Howard J. & Tarr, David G., 2000. "Exchange rate overvaluation and trade protection - lessons from experience," Policy Research Working Paper Series 2289, The World Bank.
  18. Valdes, A., 2000. "Agricultural Support Policies in Transition Economies," Papers 470, World Bank - Technical Papers.
  19. Valdes, A, 1996. "Surveillance of Agricultural Price and Trade Policy in Latin America during Major Policy Reform," World Bank - Discussion Papers 349, World Bank.
  20. Garnaut, Ross & Clunies-Ross, Anthony, 1983. "Taxation of Mineral Rents," OUP Catalogue, Oxford University Press, edition 1, number 9780198284543.
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