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GTAP Resource #1966

"Likely Impact of the WTO “July Package” 2004 Agreement on Liberalization in Agriculture on Poverty in Indonesia: A Comparative Study between Partial Equilibrium Model and Existing GTAP Studies"
by Tambunan, Tulus

Agriculture is the key sector for nearly all poverty analyses. In Indonesia, as in many other less developed or poor countries, the poor are predominantly rural; food accounts for a major share of all poor people’s expenditure; agriculture is their major source of income; and farm incomes have large spillovers to others in the rural economy. The markets in this sector are among the most distorted in the world, with both developed and less developed countries maintaining high levels of protection. It is generally suggested that agricultural liberalization in developed countries, the Doha agreements, or recently more known as the “July Package” 2004, i.e. 20% subsidy cut in agriculture in OECD countries, is likely to increase the prices of food grains and commercial crops in the world market. However, the implications for the developing countries of increased agricultural prices are unclear and it is argued that the potential exporting countries could benefit and the net food importing countries may turn out to be the looser. Most of literature that has been devoted to examining the potential impact of agricultural trade liberalization on developing countries use computable general equilibrium (CGE) models such as GTAP from different versions, and there are competing predictions of the impact of the Doha agreements based on simulation results of these models. Some studies foresee expansion of world trade, real output, wages and incomes in developing countries; while others predict less profitable for these countries.
The main aims of this study are the followings: (2) to discuss different outcomes of existing CGE based studies on the effect of the Doha agreement on poverty/income in developing countries; (2) to predict empirically the poverty impact in Indonesia of the agreement by using the Agricultural Trade Policy Simulation Model (ATPSM and a partial equilibrium model.

Resource Details (Export Citation) GTAP Keywords
Category: 2006 Conference Paper
Status: Published
By/In: Presented at the 9th Annual Conference on Global Economic Analysis, Addis Ababa, Ethiopia
Created: Tambunan, T. (4/21/2006)
Updated: Tambunan, T. (4/21/2006)
Visits: 2,261
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