Working Paper: CEPR ID: DP9286
Authors: Kym Anderson
Abstract: Historically, earnings from farming in many developing countries have been depressed by a pro-urban bias in own-country policies, as well as by governments of richer countries favouring their farmers with import barriers and subsidies. Both sets of policies reduced global economic welfare and agricultural trade, and added to global inequality and poverty. Over the past three decades, much progress has been made in reducing agricultural protection in high-income countries and agricultural disincentives in developing countries. However, plenty of price distortions remain. As well, the propensity of governments to insulate their domestic food market from fluctuations in international prices has not waned. Such insulation contributes to the amplification of international food price fluctuations, yet it does little to advance national food security when food-importing and food-exporting countries equally engage in insulating behaviour. Thus there is still much scope to improve global economic welfare via multilateral agreement not only to remove remaining trade distortions but also to desist from varying trade barriers when international food prices gyrate. This paper summarizes indicators of trends and fluctuations in farm trade barriers before examining unilateral or multilateral trade arrangements, together with complementary domestic measures, that could lead to better global food security outcomes.
Keywords: Export Taxation; Farmer Protection; Food Price Spikes; Trade Policy History
JEL Codes: F13; F14; Q17; Q18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Agricultural price distortions (Q11) | Global economic welfare (D69) |
| High-income country policies (O57) | Earnings of farmers in developing countries (O13) |
| Domestic market insulation (L10) | International food price volatility (Q11) |
| Government policy responses (E65) | Domestic price stability (E64) |
| Government interventions (E65) | Agricultural price distortions (Q11) |