How do Agricultural Policy Restrictions to Global Trade and Welfare Differ Across Commodities?

50 Pages Posted: 7 Apr 2009

See all articles by Peter Lloyd

Peter Lloyd

University of Melbourne - Department of Economics

Johanna L. Croser

University of Adelaide

Kym Anderson

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

Multiple version iconThere are 2 versions of this paper

Date Written: March 2009

Abstract

For decades the world's agricultural markets have been highly distorted by national government policies, but very differently for different commodities. Hence a weighted average across countries of nominal rates of assistance or consumer tax equivalents for a product can be misleading as an indicator of the trade or welfare effects of policies affecting that product's global market. This is especially the case when some countries tax and others subsidize its production or consumption. This article develops a new set of more-satisfactory indicators for that purpose, drawing on the recent literature on trade restrictiveness indexes. It then exploits a global agricultural distortions database recently compiled by the World Bank to generate the first set of estimates of those two indicators for each of 28 key agricultural commodities from 1960 to 2004, based on a sample of 75 countries that together account for more than three-quarters of the world's production of those agricultural commodities. These reveal the considerable extent of reforms in agricultural policies of developing as well as high-income countries over the past two decades.

Keywords: agricultural price and trade policies, Distorted commodity markets, trade restrictiveness index

JEL Classification: F13, F14, Q17, Q18

Suggested Citation

Lloyd, Peter John and Croser, Johanna L. and Anderson, Kym, How do Agricultural Policy Restrictions to Global Trade and Welfare Differ Across Commodities? (March 2009). CEPR Discussion Paper No. DP7230, Available at SSRN: https://ssrn.com/abstract=1372550

Peter John Lloyd

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

HOME PAGE: http://melbecon.unimelb.edu.au/staffprofile/plloyd/home.html

Johanna L. Croser

University of Adelaide ( email )

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

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

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