Working Paper: CEPR ID: DP18099
Authors: 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Abstract: Over the past three decades, tariff protection to farmers has fallen and partly been replaced by domestic support, whilst support for farmers in some emerging economies has grown.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.
Keywords: agricultural subsidies; tariffs; global welfare; trade policy
JEL Codes: F13; F14; O13; Q17; Q18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| removal of agricultural domestic supports (Q18) | global welfare (I30) |
| removal of tariffs (F13) | global welfare (I30) |
| presence of tariffs (F19) | level of economic welfare (D69) |
| removal of domestic supports (H53) | global welfare (I30) |
| domestic supports (J12) | tariffs as protective measures (F13) |
| developing countries' policies (O25) | global welfare costs (D69) |