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GTAP Resource #6504

"The Relative Importance of Global Agricultural Subsidies and Market Access, Revisited"
by Anderson, Kym, Erwin Corong, Anna Strutt and Ernesto Valenzuela

Agricultural price and trade policies were highly distortive of world food, feed and fibre markets in the latter half of the 20th century, but many trade reforms began in the 1980s and continued following the 1995-2004 implementation of the GATT/WTO Uruguay Round Agreement on Agriculture. By then, import tariffs were responsible for 93% of the global economic welfare cost of distortions to farmer incentives, the rest due to domestic subsidies (5%) and export subsidies (2%), according to GTAP modelling by Anderson, Martin and Valenzuela (2006).
Some import tariffs have since come down further, and export subsidies were outlawed by WTO members in 2015. However, domestic support measures have replaced some of the assistance previously provided to farmers by tariffs and have more than doubled in OECD countries this century. More recently, populist governments have added to that.
The present study provides new estimates of the economic impacts of agricultural tariffs and domestic supports globally. It does so by calibrating the database of the global economywide GTAP (Global Trade Analysis Project) model to 2019 and then simulating the removal of food and agricultural domestic supports without and then with tariff removal as well. Farmers would lose in the most-assisted countries but consumers there and producers in net-food-exporting countries would gain. Detailed results for various regions of the world, and for various farm products, are discussed before drawing markets and policy implications.

Anderson, K., W. Martin and E. Valenzuela (2006), “The Relative Importance of Global Agricultural Subsidies and Market Access”, World Trade Review 5(3): 357-76.

Resource Details (Export Citation) GTAP Keywords
Category: 2022 Conference Paper
Status: Not published
By/In: Presented during the 25th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2022
Created: Anderson, K. (4/10/2022)
Updated: Anderson, K. (6/17/2022)
Visits: 630
- GTAP Data Base and extensions
- Agricultural policies
- Domestic policy analysis
- Multilateral trade negotiations
- Not Applicable

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