Measuring the Impact of Distortions in Agricultural Trade in Partial and General Equilibrium

Abstract

This paper provides quantitative estimates of the impact of removing agricultural support (both tariffs and subsidies) in partial- and general-equilibrium frameworks. The results show that agricultural support in industrial countries is highly distortionary and tariffs have a larger distortionary impact than subsidies. Removal of agricultural support would likely raise the international prices of food, resulting in an increase in the cost of food for many net-food-importing countries, although the increase is generally small. The results also show that most of the benefits from removing agricultural support accrue to the countries that liberalize.

Keywords: Agricultural Trade, Tariffs, Subsidies, Models

JEL Classification: Q17, F13