The Puzzle of Agricultural Exceptionalism in International Trade Policy

Abstract

This article first seeks to demonstrate the exceptional levels of protectionism accorded to the agricultural sector, especially in many developed countries. It reviews the principal protectionist measures employed: domestic subsidies and price supports, production restrictions, and border measures; describes briefly the disciplines applicable to these measures under World Trade Organization law; and then surveys empirical evidence on the extent of protectionism that prevails in the agricultural sector in many countries. Next, it evaluates the principal normative justifications often offered for exceptional levels of agricultural protectionism: ensuring access to affordable food; ensuring a livable income for farmers; and preserving traditional rural lifestyles and communities. It finds that these are not especially compelling either relative to many other economic sectors or in terms of first-best policy responses to the normative concerns in question. The article then considers political economy explanations for exceptional levels of protectionism in agriculture—including Public Choice explanations and the transitional gains trap—which, while providing some purchase on the phenomenon, are again not completely compelling. The article concludes with some observations on how liberalization of trade in agricultural products might be advanced in the future.