Changing Contributions of Different Agricultural Policy Instruments to Global Reductions in Trade and Welfare

43 Pages Posted: 29 Mar 2010

See all articles by Kym Anderson

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Johanna L. Croser

University of Adelaide

Multiple version iconThere are 2 versions of this paper

Date Written: March 2010

Abstract

Trade negotiators and policy advisors are keen to know the relative contribution of different farm policy instruments to international trade and economic welfare. Nominal rates of assistance or producer support estimates are incomplete indicators, especially when (especially in developing countries) some commodities are taxed and others are subsidized in which case positive contributions can offset negative contributions. This paper develops and estimates a new set of more-satisfactory indicators to examine the relative contribution of different farm policy instruments to reductions in agricultural trade and welfare, drawing on recent literature on trade restrictiveness indexes and a recently compiled database on distortions to agricultural prices for 75 developing and high-income countries over the period 1960 to 2004. Results confirm earlier findings that border taxes are the dominant instrument affecting global trade and welfare, but they also suggest declines in export taxes contributed nearly as much as cuts in import protection to global welfare gains from agricultural policy reforms since the 1980s.

Keywords: agricultural price and trade policies, distorted incentives, trade restrictiveness index

JEL Classification: F13, F14, F15, N57, Q17, Q18

Suggested Citation

Anderson, Kym and Croser, Johanna L., Changing Contributions of Different Agricultural Policy Instruments to Global Reductions in Trade and Welfare (March 2010). CEPR Discussion Paper No. DP7748, Available at SSRN: https://ssrn.com/abstract=1578078

Kym Anderson (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

Johanna L. Croser

University of Adelaide ( email )

No 233 North Terrace, School of Commerce
Adelaide, South Australia 5005
Australia

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