Food Price and Trade Policy Evolution Since the 1950s: A Global Perspective1

Abstract

In both rich and poor countries, food markets have been subjected to some of the most heavy‐handed governmental interventions. Policy developments in this sector since the 1950s have been mostly gradual but persistent, involving in many cases a change from taxing to subsidizing farmers—and from subsidizing to taxing food consumers—as national per capita incomes grow. In a few important countries there also have been transformational policy reforms, and in all countries there tends to be only partial short‐run transmission of international price fluctuations to domestic markets—a tendency that has not declined over time. This paper summarizes indicators of these trends and fluctuations in price‐distorting impacts of policies for a sample of 82 countries, using a global set of annual data from 1955 to 2011. It then draws implications for what policy interventions might evolve over coming years, especially as emerging economies attain and move beyond middle‐income status.JEL codes: F13, F14, N50, Q17, Q18