Agricultural Liberalization Research Articles

A political ecology of socio-economic differentiation: debt, inputs and liberalization reforms in southwestern Burkina Faso

This paper builds on work from the agrarian change and political ecology literatures to analyze the process of agrarian change among smallholder cotton farmers in southwestern Burkina Faso. Specifically, we use a rural survey of 72 heads of household in three villages to examine whether and how (1) access to agricultural inputs, (2) debt and (3) liberalization reforms combine to produce rural socio-economic differentiation based on wealth. We find that wealthier farmers use more mineral fertilizer and manure inputs than their poorer counterparts. Wealthier farmers are also better able to remain debt-free as cotton prices drop and input prices rise. Moreover, they are able to take advantage of the neo-liberal restructuring of cotton cooperatives to change polices on debt repayment and input provisioning to their favor. This growing divide has large implications for rural food security, particularly as land becomes scarcer, fallows disappear and the need to intensify production grows. This research addresses two gaps in the agrarian change literature in relating how liberalization reforms and biophysical elements drive rural socio-economic differentiation. This work also shows that merging the concerns of political ecology with the agrarian change literature allows for a deeper examination of rural socio-economic differentiation.

Agricultural liberalization, cotton markets and buyers’ relations in Zimbabwe, 2001–2008

The paper examines the relations between seed cotton buyers in Zimbabwe's deregulated cotton sector. It draws upon interviews with officials from cotton companies to expose the disagreements and lack of cooperation among them over side marketing of contracted seed cotton and in maintaining common industry standards. In this context, the paper discusses cotton sector reforms spearheaded by some industry stakeholders aimed to address problems in the cotton sector. Despite the companies’ official agreement to the draft reforms of 2004, there were simmering tensions and disputes that strained relations among them. The government's unwillingness to intervene and provide coordination exacerbated problems in the cotton sector. Further, the paper highlights the contradictions in neo‐liberal reforms that seek to promote competitive agricultural markets, and argue against state intervention and strong regulation of markets. It argues that there is a need to reconceptualize the role of the state in some predatory and developing countries that liberalized agricultural markets because of the multiple and uneven effects of the lack of regulation and absence of institutions in the private sector.

Economic Integration in Asia: Bilateral Free Trade Agreements Versus Asian Single Market

Institutional regionalization has come late to East Asia compared to Europe, but its pace has accelerated since the mid-1990s. Many agreements, including bilateral ones, cover an ever-increasing portion of the East Asian region, including China. We first analyze regional economic integration in East Asia, questioning the notion of open regionalism. In a second part we explore the possible consequences of different kind of agreements. We rely on the CEPII's CGE model (MIRAGE. As regards the geometry of the agreement(s), two sets of scenarios are considered, following a Hub-and-Spoke versus a Full-FTA assumption, with or without sensitive products inclusion. Among the main results, we find that Asian countries do have diverging interests. While ASEAN maximizes its benefit in the bilateral scenario including agricultural liberalization (SC1); Japan and Korea are the best in the Asia global agreement scenario, including sensitive products for Japan (SC2) but excluding these products for Korea (SC 4). The main losers are the close countries and primary goods producers such as Taiwan, South Asia (excluding India), North of Africa, South America.Please enter abstract text here.

An assessment of agricultural productivity and major driving factors in the republic of Benin

Under different reforms that occurred since 1961, Benin agricultural productivity has changed and decreased significantly after the country’s agricultural liberalization in 1990. This paper used simple linear regression toexplore major driving factors that change and propose policies which will contribute to improve the country’s agricultural productivity in the long term. Results reveal that Agricultural land and rainfall had a positive effect on productivity while labor and government effectiveness had a negative effect. Moreover, agricultural research, extension and country openness doesn’t any significant effect. Therefore, government should manage effort to improve agricultural labor management and develop effective actions to addressedagricultural productivity goals.

Farmers' Producer Companies in India: A New Concept for Collective Action?

Producer companies can help smallholder farmers participate in emerging high-value markets, such as the export market and the unfolding modern retail sector in India. As elsewhere in the developing world, in India, small farmers' livelihoods are being threatened due to the liberalization and privatization of Indian agriculture and the increasing interest of private capital in the agribusiness sector. The withdrawal of the state from productive and economic functions, and changes in the organization of marketing channels, present new challenges for small-scale farmers. In this environment of greater instability and competition, organization and collective action can help to enhance farmers' competitiveness and increase their advantage in emerging market opportunities. We build on the ideas of value-chain governance and collective-action literature and introduce the functions and organizational structure of producer companies in India within this context. On the basis of a case study of a specific producer company in Maharashtra, which produces and markets mango and cashew nuts, we discuss the potential benefits for rural communities and the reempowering effect of this form of farmer organization.

Asymmetry in Japan and Korea's agricultural liberalization in FTA: domestic trade governance perspective

Agricultural liberalization is one of the most contentious trade issues in Japan and Korea. Yet, important differences characterize the Japanese and Korean governments’ positions on agricultural liberalization when negotiating on free trade agreements (FTA). The Korean government supports substantial agricultural liberalization, whereas the Japanese government is reluctant to abandon farm interests even at the risk of undermining its FTAs. Given strong similarities in their agricultural structure and politics, how do you explain divergent government positions between Japan and Korea? The structure of a country's domestic trade governance largely explains the Japanese and Korean governments’ varying approach to agricultural liberalization during FTA negotiations. Domestic trade governance refers to the decision-making structure and process on foreign economic policies. Cohesive domestic trade governance enabled the Korean government to pursue agricultural liberalization under the broader national agenda of promoting trade through FTAs. In contrast, fragmented domestic trade governance gave disproportionately larger weight to agricultural interests within the Japanese government, ultimately allowing agriculture to undermine the success of Japan's FTAs.

Grain Procurement, Tax Instrument and Peasant Burdens during China's Rural Transition

In this paper, we argue that China's grain procurement system as a major instrument in rural taxation survived the communes and lost its importance only gradually in recent years. However, as agricultural liberalization progressed, the traditional tax instruments of ‘tax deduction prior to grain procurement payment’ and implicit taxation through ‘price scissors’ gradually eroded. Under such a circumstance, local governments in agriculture-based regions resorted to informal fees collected directly from individual rural households while the more industrialized regions shifted to non-agricultural taxes that are less costly in terms of tax collection. Empirical evidence based on a large panel data set supports our hypotheses of rural taxation in China.

The Political Economy of Ethiopian Cereal Seed Systems: State Control, Market Liberalisation and Decentralisation

This article explores the political and economic processes governing Ethiopian cereal seed systems. The nature of the Ethiopian agricultural sector, the historical evolution of the seed system and the seed specificities for each cereal crop have resulted in a wide range of actors with diverse linkages and policy processes. A series of economic and political drivers are identified, including top-down state-driven initiatives; agricultural liberalisation and the private sector and political-administrative decentralisation, all of which pull in different directions. It is important that the technocrats, politicians, international donors and supporters understand these political and economic drivers of change and by addressing these conflicts and contradictions, they may improve the chances of designing and implementing more technically effective and socially appropriate policies. This will help establish a vibrant seed system which offers real choices for farmers in terms of seed type, quantity, and quality and delivery time at reasonable prices.

The Necessity to Balance the Barcelona Process : Economic Integration between North Africa and the European Union

The Barcelona process is an ongoing process and its first economic results are still insignificant. This study had two objectives. The first is to provide a global assessment of its impacts on the three North African countries that have already became members of this process, namely Tunisia, Morocco and Egypt. The second objective is to explore its potentials by a larger inclusion of agriculture in the Euromed partnership. The approach adopted in this paper is the use of the MIRAGE global Computable General equilibrium Model and the MacMAPS database that gives a very detailed picture of the bilateral protection between all the WTO members. This approach allowed us to consider all the economic interactions that exist between the North African countries and the European Union as well as the economic interaction between the North African countries themselves. In addition a special emphasis was given to the compute methods used to aggregate tariffs. Indeed, existing methods of aggregation are underestimating the level of tariffs applied by the European Union on agricultural products. This underestimation induces an underestimation of the effects of agriculture liberalization on North African economies. In this paper, we develop an original method of aggregation that attempts to deal with this problem and that gives a more accurate approximation of the market access barriers applied by the European countries. Our main contribution in this article is to develop an original approach of aggregation that aims to obtain a more realistic estimation of the tariffs faced by developing countries and by consequence to obtain a more realistic estimation of the economic impacts of agricultural liberalization between developed and developing countries.

Agricultural decline and sustainable development on mountain areas in Greece: Sustainability assessment of future scenarios

Agricultural decline may pose an important threat to mountain biodiversity but it also constitutes a driving force of socio-economic transformation. The aim of this study is to investigate the implications of alternative agricultural policy scenarios on the sustainable development of Greek mountain areas using a case study approach (Zagori region, Greece). Two agricultural policy scenarios were explored and assessed against a list of sustainability objectives. Causal relationships among drivers of changes and sustainability objectives were explored using Network Analysis. Our analysis has shown that agricultural liberalisation is expected to have devastating effects on the development of the area and it was strongly opposed as an alternative future by the local stakeholders. The analysis of the driver's causal relationship has also revealed that in order to ensure the sustainable development of the area it is necessary to sustain low input extensive farming, to promote mild tourism development and to enhance the operational efficiency of the National Park. Moreover, in order to reconcile agricultural decline, biodiversity and sustainable development, policy-management recommendations must be drawn at multiple administrative levels and complementary policy interventions within and between levels are required. It is thus, important that EU agricultural policies are complemented by national-regional interventions in order to regulate the fragile balance between agriculture and tourism. Finally, this study has shown that the combination of scenario analysis and sustainability assessment can provide an efficient tool to inform management strategies for sustainable development.

Marketing Reform? The Rise and Fall of Agricultural Liberalisation in Tanzania

This article argues that the liberalisation of Tanzanian export agriculture from the early 1990s to the present has failed to take place to the extent claimed by the Tanzanian government and donor agencies. While internal food markets have largely been liberalised, donor‐inspired attempts to liberalise export crop markets have been seriously undermined by the political‐bureaucratic class. As in other countries undergoing adjustment under World Bank/IMF programmes, a combination of local vested interests and concerns with the ‘rigged rules and double standards'1 of global commodity markets has led to a systematic but under‐reported backlash against liberalisation. Tanzania's current status as a star HIPC/PRSP performer is belied by a growing rejection, whether principled or opportunistic, of the liberalisation project.

The Legal and Economic Implications of Economic Partnership Agreements in Kenya's Trade Arena: Assessing Liberalization of Agriculture and Food Security

This paper examines the concept of Reciprocal Trade Liberalization – the common objective of Economic Partnership Agreements, and its legal and economic effect on Kenya’s Agricultural Sector/Industry within the purview of the General Agreement on Trade in Services (GATS). The study is premised on the fact that EPA’S are beneficial and within the ambits of WTO’S rules of reciprocal trade among member states, however, it advocates for legal caution and prudence on the same considering that Kenya is a developing Nation with higher economic obligations and ambitions than that of its trading partner the European Union (EU). The review particularly focuses on the International Convention for the Protection of New Varieties of Plants (UPOV) in relation to EPA negotiations and implementation. It then assesses whether the EPA framework has adequately addressed, food security and biosafety with respect to farmers and plant breeders’ rights, sustainable development, access and benefit sharing (ABS) and protection of traditional knowledge in agriculture. The place of the UPOV is of utmost significance in Kenya’s Agriculture sector because Kenya is a signatory of the 1978 UPOV Act whereas there is in place the 1991 UPOV Act (the basis of EPA negotiations on Agriculture) which has broader objectives and features, with respect to plant varieties and the time frame for protection on the same. Currently, Kenya’s Agricultural policies, legislations and institutions reflect the objectives of UPOV 1978. This essentially means that should Kenya decide to accede to UPOV 1991 which is more EPA compliant, first, it will have to amend its laws governing agriculture and intellectual property rights to adjust with its new commitments under UPOV 1991, and secondly to be in tandem with relevant plant variety protection clauses in the EPA framework. In view of the above, there good chances for policy and legislative conflict with the possibility of distorting Kenya’s trade performance. Therefore, what mechanisms are available to bridge the gap so as to ensure it is compliant with the ESA-EU EPA provisions? If there are available mechanisms, are the same viable to vouch Kenya’s competitiveness in the EPA trade arena?

What Happened to Doha in Geneva?

This article offers an account and analysis of the World Trade Organization's (WTO) 7th Ministerial Conference – a meeting that, although ‘successfully’ concluded, failed to address a series of key issues in the increasingly moribund Doha Round of trade negotiations. We begin with an account of the meeting that offers an insight into the ‘colour’ of these biennial gatherings. The article then identifies and explores the primary consequences of pursuing an agenda designed not to focus on the core issues in the Doha Round but instead to ensure that the meeting is a ‘success’. Here we draw attention to the increasingly problematic nature of the Round's ‘development’ content, the thorny issue of agricultural liberalization and the problems posed for developing countries when their industrial counterparts pursue trade objectives through regional and bilateral means. In the concluding section, we consider the way forward for both the Doha Round and the WTO as an institution.

The Impact of Policy Making on Agricultural Liberalization in Japan

The Impact of Policy Making on Agricultural Liberalization in Japan

A Policy Rule for the Liberalization of Agriculture in Sri Lanka

Staff Studies is the bi-annual (March and September) peer-reviewed journal of the Central Bank of Sri Lanka. The Journal aims at stimulating innovative research for the analysis of current macroeconomic issues and policy challenges faced by central banks while providing a forum to present recent theoretical and empirical research.

Agrarian Distress under Global Integration: Impoverishing Growth and "Perverse" Supply Response

- This paper aims to explain theoretically two apparently paradoxical phenomena witnessed in the Telangana region of South India between 1985 and 2000. First, despite the rapid growth of real agricultural output during this period, per-capita consumption of the majority of the agricultural population declined during the 1990s (when agricultural liberalization policies were introduced in India) after steadily rising during the 1980s. Second, non-food crop supply elasticities, which had been positive, turned "perversely" negative during the 1990s. Employing a model of a peasant economy with an effort supply function originally proposed by Leibenstein, we explain the two puzzles in terms of the interplay between the conditions of global integration (falling value-added prices) and the nature of local credit markets and institutions (including the practice of requiring collateral in the form of non-food crops).EconLit Classification: P160, O100, F150, Q100Keywords: Capitalist Systems, Political Economy, Economic Development, Economic Integration, Sustainable DevelopmentParole chiave: Sistemi capitalistici, Politica economica, Sviluppo economico, Integrazione economica, Sviluppo sostenibile

Preference erosion and market access liberalization: the African dilemma in multilateral negotiations on agriculture

African countries, especially sub-Saharan ones, have conflicting interests in multilateral negotiations on agriculture. On the one hand, their economies may be boosted by the price effect induced by agricultural liberalization. On the other hand, multilateral tariff cuts will result in the erosion of preferential margins. Based on an original methodology, using CGE modeling, detailed tariff calculations and predictive analysis, this paper investigates the potential impact of current multilateral negotiations on the value of preferences for African agriculture. It estimates the preferential value to USD 0.7 billion of welfare and USD 1 billion of exports to the Triad markets. Furthermore, it highlights the “cruel dilemma” African countries face in current negotiations, as they gain from ambitious trade liberalization, despite the large preferential erosion, while they suffer from noticeable trade and welfare losses under conservative scenarios.

Economic Impact of a Potential Free Trade Agreement (FTA) between the European Union and the Commonwealth of the Independent States

We evaluate the effects of potential measures to liberalize trade between the EU and the CIS using a computable general equilibrium (CGE) model. We look at the CIS as an aggregate and we also present results for individual CIS countries. Our CGE model takes different underlying industry specific market structures and elasticities into account. Furthermore, the model incorporates estimated non-tariff trade barriers to trade in services. The results are compared to a baseline which incorporates recent developments in the trade policy environment, i.e. the phase out of ATC, enlargement of the EU and CIS accessions to the WTO. The analysis takes agricultural liberalization, liberalization in industrial tariffs, and liberalization in services trade as well as trade facilitation measures into account. While there is important heterogeneity in the impact of FTAs on individual countries, the results indicate that the CIS as a whole would experience a negative income effect if the FTA would be limited only to trade in goods. This implies that the CIS would most likely to benefit from an FTA with the EU if it would incorporate deeper form of integration not being limited to liberalization of tariffs in goods.

The Political Dynamics of Agricultural Liberalisation in the US-Chile Free Trade Agreement

AbstractThe 2003 US-Chile free trade agreement, regarded by many as consistent with Chile's long-held trade liberalisation strategy, nonetheless engendered a surprisingly vigorous debate focused on the proposed elimination of the bandas de precio protecting traditional agricultural crops. Opposition to the agreement, mounted by the conservative Alianza por Chile, offers an intriguing political case study that suggests that populist posturing surrounding free trade agreements may persist long after a trade liberalisation strategy has become well-established. This article argues that agricultural liberalisation will be a significant challenge for Chile's governing coalition if it wishes to pursue trade negotiations while seeking to avoid costly political battles at home over the economic costs of abandoning price supports and the challenges of ‘reconverting’ to an export-oriented sector. Even given the strong elite consensus around trade liberalisation in Chile, the interconnections between sectoral interest groups, domestic politics and trade negotiations remain relevant, and deserving of analytical attention.

Agricultural Trade Liberalization and Poverty in Tunisia: Micro-Simulation in a General Equilibrium Framework

The study tries to answer the following questions: Will exposure to world agricultural prices generate more poverty or less? To what extent will households be affected by changes in agricultural trade polices? Do multilateral agricultural liberalization matter more than bilateral changes? Results of simulations using a computable general equilibrium (CGE) model linked to household survey data suggest that trade liberalization has only modest effects on the level of GDP, but it has a substantial effect in reducing poverty. Moreover, the combined effects of global and domestic liberalization are more pro-poor than the effect of domestic liberalization alone. As a net importer of agricultural commodities, Tunisia may be expected to experience terms-of-trade losses from higher world agricultural prices. However, given Tunisia's significant agricultural import protection policies, it is expected that the agricultural sector will lose from trade liberalization that removes this protection.