Agricultural Trade Policy Research Articles

Transatlantic Food and Agricultural Trade Policy: 50 Years of Conflict and Convergence

Transatlantic Food and Agricultural Trade Policy: 50 Years of Conflict and Convergence

How much priority is given to nutrition and health in the EU Common Agricultural Policy?

Agriculture in the European Union (EU) is strongly influenced by the Common Agricultural Policy (CAP). There have been repeated calls for CAP to address nutrition-related health, particularly obesity and non-communicable disease (NCD) in the EU. However, aligning agricultural policy such as CAP with nutrition is complex, not least because the aims of agricultural policy are predominantly economic, presenting a challenge for developing coherence between agricultural trade and health policy. This research examined the political priority given to nutrition-related health concerns within CAP to date, and the solutions suggested by agricultural, trade and health policy-makers and public health nutrition advocates, via interviews of 20 high-level participants from respective sectors. The participants provided diverse perspectives, often varying by sector and institution, on the connections between agricultural policy and nutrition-related health, the extent to which nutrition concerns have been addressed via CAP and whether CAP is an appropriate and effective policy approach to improve nutrition-related health in the EU in the future. The key findings suggest the need for communication and agreement of clear high-level nutrition guidelines, clarity on the EU mandate to address nutrition-related health concerns via policy, and stronger engagement of civil society in the issues if CAP is to address nutrition more than it is doing currently. The difference in worldviews between agricultural/trade representatives, and those from public health, also needs to be addressed.

U.S. International Agricultural Trade Policy: Interests, Institutions and Information in the Corn Supply Chain

The purpose of this article is to analyze the U.S. international agricultural trade policy by focusing on instruments and institutional arrangements. Policy decision-making is analyzed by means of three variables: 1) how interests are mobilized; 2) how information is disseminated; and 3) how spaces are occupied in deliberation arenas. The study refers to the corn sector and observes how the National Corn Growers Association operated to ensure subsidies and incentives for this supply chain along the elaboration of the 2002 and 2008 Farm Bills, as well as from other laws pertaining to agricultural and energy incentives. This paper provides evidences in favor of four arguments: first, empirical studies on the formulation and implementation of foreign trade policy, especially when it comes to agricultural issues, would greatly benefit with a greater attention on understanding the role domestic actors play in the decision-making processes; second, interest groups play a key role in this decision-making process; third, they provide the rationale for the formulation and implementation of the U.S. international agricultural trade policy; and, fourth, when the economic sector coordinates complex and relevant supply chains in the U.S. economy, it is hardly possible to revert the U.S. protectionist position in the Legislative branch.

Transmission of Global Food Prices to Domestic Prices: Evidence from Sri Lanka

Food prices have been increasing sharply since 2003. In the globalized world, the transmission of global foodprice increases to domestic market determines the decision of economic agents and policy makers of a domesticeconomy. The recent growth of global food prices affects the welfare of poor consumers and producers. In SriLanka, large segment of the population spends more than 50 percent of their income on food. Thus, this studyinvestigates and assesses how international food price surge affects domestic inflation process in Sri Lanka. Theempirical statistical results are derived by using a battery of parametric and non-parametric econometrictechniques using monthly data of price series for the period from 2003M1 to 2013M12. The co-integrationanalysis results confirm that global food prices, domestic prices are co-integrated. Therefore, Sri Lankangovernment needs to develop a safety net program for the poor and a longer term poverty reduction strategy.Policy attention needs to shift towards efforts to increase food production. The results of this study have variouspolicy implications for monetary policy, food and agricultural policy and trade policy for Sri Lanka.

English

The study analysed causality between agricultural exports and its share of gross domestic product in South Africa from 1994 to 2011. Apple, avocado, mango and orange exports in tonnes were used to Granger analyse agricultural exports versa agricultural GDP contribution. The results of the Granger causality test showed a unidirectional causality between exports and GDP. Policies and programmes can help farmers with employees wage to enter the export markets which are ineffectual. Policies can be aimed at redress, such as the Employment Equity Act; which is size dependent on other sectors outside agriculture which discourage growth and export participation. Key words: Agricultural economic growth, agricultural exports, agricultural trade policies, export-led growth, Granger Causality test.

Food Security in India: The Imperative and Its Challenges

AbstractThis article addresses the imperative of food security in India in the context of persistent prevalence of malnutrition despite several years of rapid growth. In particular, the article posits that the recent promulgation of the National Food Security Act in September 2014 to meet this challenge also offers an opportunity to reconfigure its food distribution system and agricultural trade policy. These two issues pose the greatest and most immediate challenges for India. The more enduring challenge for India would be to sustain food production to ensure not only adequate quantities, but also to support dietary quality and diversity.

Political Economy of Agricultural Trade Policy: A Review of the Literature and an Agenda for Future Research

Political Economy of Agricultural Trade Policy: A Review of the Literature and an Agenda for Future Research

Trade liberalization and state support of agriculture: effects for developing countries

The paper aims at the overview of the main approaches of state support implemented by developed and developing countries and the assessment of their distorting influences on the trade with agricultural commodities. The current state of state support is analyzed on the examples of EU-27, the USA and Japan. The experiences of developing countries are summarized on the examples of China, Russia and the CIS countries. State support tools are grouped according to the WTO classification. The alternative classification is implemented in order to compare the distorting effects caused by the state support. The EPACIS model is implemented to analyze the effects of trade liberalization for the distribution of agricultural commodities and trade policies in developing countries. The model is adjusted in order to assess the effects of state support for the production and trade with agricultural commodities in developing countries, recently accessed the WTO (the case of Russia). Imitation calculations allow formulating policies for the developing agricultural markets depending on the degrees of their sensitivity to foreign trade regulations and domestic support.  

Agricultural Trade Policies and Food Security: Is There a Causal Relationship?

The aim of this paper is to assess the causal impact of trade policy distortions on food security.The added value of this work is twofold:i)its use of an on-parametric matching technique with continuous treatment,namely the Generalised Propensity Score(GPS)to address the self selection bias;ii)its analys is of heterogeneity in treatment(by commodities)as well as inoutcome(i.e.different dimensions of food security).The results of our estimates clearly show that trade policy distortions are,overall,significantly correlated with the various dimensions of food security analysed. Both discrimination against agriculture and 'excessive' support lead to poor performances in all dimensions of foodsecurity (availability,access,utilisation and stability).

Democracy, Trade Openness, and Agricultural Trade Policy in Southeast Asian Countries

AbstractThis paper examines the relation between trade, political openness, and agricultural trade policy in developing countries. It argues that trade openness and democracy contribute to lower taxes and control programs in the agricultural sectors. Examining the politics of agricultural trade policy in Indonesia, Malaysia, the Philippines, and Thailand, it was found that trade expansion and democratic regimes lead to fewer taxes and control programs imposed on agriculture. The results indicate that elected governments in industrializing countries are less likely to impose more tax and control programs on agriculture in order to encourage exports and in order to appeal to farmers, who are a major voting bloc in these countries.

IMPACTS OF IMPORT TARIFF REMOVAL AND CHANGES IN INTERNATIONAL PRICES ON THE APPLICABILITY OF THE TRADITIONAL HOS TRADE THEORY

This paper examines the effects of agricultural and nonagricultural trade policy changes in the Brazilian economy using a computable general equilibrium model (CGE). An extended Salter-Swan model is employed to verify if the Stolper-Samuelson theorem (SST) holds after having a trade barrier removed and the consequences in terms of prices, production and resources allocation. Results show that the Stolper-Samuelson hypothesis is reversed when imports and domestic goods are poor substitutes. Reduction in import tariff increases national income, which implies that inappropriate trade policy adjustments can stand in the way of promoting rapid and equitable economic growth. Further, our results show that changes in relative factor prices in Brazil depend not only on changes in commodity prices, as in the SST, but also on changes in the balance of trade and factor endowments. This study mainly proposed to verify a specific result from a theoretical trade model, which makes important to stress the carefulness about the empirical results obtained to the Brazilian trade policies.

The Agricultural Invasion and the Political Economy of Agricultural Trade Policy in Belgium, 1875-1900

After 1875, cheap grain from the United States and Russia flooded the European markets. Many countries like Germany, France, and Sweden turned to agricultural trade protection, while others, like the UK and Denmark, held on to a free trade position. Belgium adopted a middle position, leaving its grain markets open but protecting animal husbandry, dairy production, and the processing of foodstuffs. The econometric analysis of the votes of Belgian Members of Parliament on four proposals to install protectionist measures on agricultural trade seeks to identify which economic or political interests explain the Belgian policy option.

Political Liberalization and Agricultural Trade Policy in Indonesia and the Philippines

The political regimes in Indonesia and the Philippines have experienced a political transition—from an authoritarian to an electoral system. Such a transition has contributed to changes in the policy-making process, including agricultural trade policy. Unfortunately, few scholars have empirically examined the impact of this political transition on the policy-making process. This article aims to fill this gap by examining the causal relations between political liberalization and agricultural trade policy in Indonesia and the Philippines in order to understand how political liberalization affects the policy-making process. It is hypothesized that the more liberalized the government becomes, the less likely it is to impose control programs on agriculture. Studying the government's intervention in the agricultural sector in Indonesia and the Philippines, it was found that liberal governments are likely to reduce the tax and price control programs imposed on the agricultural sector. This article implies that a liberal regime has a positive impact on rural farmers in that governments are less likely to implement policies that discriminate against farmers' interests.

Economic Arguments in the Czech Discourse about Agricultural Trade Policy

The aim of this article is to contribute to the discussion of the politicaleconomy of trade policy. We also focus on the issue of foreign agriculturaltrade policy in the contemporary Czech Republic. We assume that in theCzech discourse the position of economic nationalism and mercantilism isclearly dominant. We would like to demonstrate this through a contentanalysis of several major Czech journals. We also believe that thearguments of those who request further regulation of agricultural trade arenot much different from those articulated in the discussion between thefree trade stance and the mercantilist stance. Even though the prevailingarguments of classical economists are still not entirely accepted in theCzech Republic (certainly not in its economic policy), the strong mercantilistposition in favor of the primary sector in the country, which has a strongcomparative advantage in industrial production, is nevertheless aninteresting object of research interest.

Farmers versus ideas: explaining the continuity in French agricultural trade policy during the GATT Uruguay Round

ABSTRACTFrance's protectionist position regarding agricultural trade is often claimed to result from French farm lobby influence. This article challenges such established claims, based on an analysis of French decision-making on the agricultural chapter of the GATT Uruguay Round. Farm lobby pressure cannot fully explain French policies, as governments often went against farmers' preferences and the level of pressure varied substantially, while there was continuity in French protectionist governmental preferences on agricultural trade. Instead, this article will show that ideational variables played a major role in explaining the continuity in French protectionist positions. While farm lobby pressure and economic pay-offs varied over the course of the GATT negotiations, French ideas concerning its identity as la Grande Nation with a presence in world agricultural markets, leading a strong Europe as a counterweight to the United States, were a stable factor that guided French position-taking against the liberalization of agricultural markets.

Integrated regional impact assessment of agricultural trade and domestic environmental policies

It remains challenging to derive general findings and conclusions from either economic theory or empirical studies on the relationship between international trade and the regional environment. Consequently, we aim to analyse environmental effects of agricultural trade policies in the Austrian Marchfeld region. We apply an integrated modelling framework that accounts for heterogeneity in agricultural production and environmental outcomes. Scenario analysis is applied to assess regional impacts of different trade policy scenarios. Sensitivity analyses reveal the relative influence of model parameters on outputs. The results indicate that lower domestic tariffs have small beneficial effects on the regional environment. The regional environmental impacts highly depend on the changes in world crop prices through global trade agreements. A laissez-faire market scenario that includes the elimination of trade barriers and agri-environmental payments (AEPs) leads to substantial environmental deterioration. Hence, the alignment of AEPs with WTO trading rules remains an important issue in the trade and environment debate.

Diri Nasyonal ou Diri Miami? Food, agriculture and US-Haiti relations

The US government has made agricultural development a major pillar of its strategy to support Haiti’s reconstruction following the 2010 earthquake, and has offered the largest bilateral pledge of agricultural development-related resources for reconstruction. The United States has also designated Haiti as a beneficiary of the US presidential Feed the Future Initiative, a major effort to promote smallholder farmer-based agricultural development and improved human nutrition worldwide. US agricultural aid to Haiti focuses primarily on boosting the productivity of staple crops for local markets, including rice. Assistance in exporting crop produce receives less emphasis. While US assistance is contributing to agricultural development and food security, a number of steps could be taken to improve its effectiveness. In addition, the United States has aggressively promoted trade liberalization in Haiti. The country is now the second largest market for US rice exports. US rice producers receive substantial government payments, and ship nearly half their produce overseas. In contrast, between 2000 and 2005, the Haitian government devoted just 4 % of its budgetary expenditures to agriculture, even though the sector employs more than half the workforce and accounts for a quarter of national income. This article assesses US aid to Haitian agriculture, examines the political economy of the incoherence between US agricultural assistance on the one hand and US agricultural trade policy on the other, and proposes policy alternatives.

Is Food Security a New Tariff? Explaining Changes in Sanitary and Phytosanitary Regulations by World Trade Organization Members

Scholars at the intersection of agricultural trade policy and health regulation have speculated that some governments, under the pretext of health protection, have adopted food safety and plant and animal health regulations to shield domestic farmers from foreign competition. In this paper, we investigate the relationship between trade protection for agriculture and the number of trade-restricting sanitary and phytosanitary (SPS) regulatory notifications issued by World Trade Organization (WTO) members. We construct an empirical model to determine the influence of agricultural protectionism, agricultural interest groups, consumer sentiment, and institutional capacity on changes to a government’s SPS rules. The findings suggest that governments’ adoption of trade-restricting sanitary and phytosanitary regulations are influenced by agricultural protectionism, even after controlling for consumer awareness and institutional capacity. The evidence suggests that health related trade policies are substituting for more traditional forms of agricultural protectionism.

Curtailing Ecosystem Exportation: Ecosystem Services as a Basis to Reconsider the Merits of Export-Driven Agriculture in Economies Highly Dependent on Agricultural Exports

This essay explores the impact of export-driven agricultural policies on the governance of natural capital. Many developing countries have adopted trade liberalization policies that encourage the intensive production of export commodities such as coffee, tea, flowers, and green beans. The primary focus of such policies is maximizing agricultural productivity and global competitiveness, which have been identified as critical factors in promoting economic growth and reducing poverty. When viewed from the perspective of ecosystem services, however, export-driven trade policies are problematic. Export-driven agricultural trade policies leave no incentive to preserve the natural capital upon which the very success of such trade policies is predicated. This essay argues that export-driven agricultural trade policies do not take into account their impact on ecosystem services. Yet, ecosystems provide critical services such as clean and ample water supplies, biodiversity, nutrient cycling, climate regulation, and carbon sequestration. These services are critical to the success of export driven agriculture. In fact, where ecosystem processes fail or are otherwise interrupted, man-made substitutes must be put in place at a substantial cost. In order for developing countries to maximize productivity, this essay argues that export-led trade policies must be sustainable and as such incorporate the need to sustain the productivity of natural capital.

Trade Liberalization Effects on Myanmar’s Oilseed Markets

Oilseeds and oilseed products are economically crucial in the Union of Myanmar. The free transaction of major oilseeds like groundnut, sesame, and palm oil has been restricted by the government’s agricultural trade policies which undermine the market forces of the domestic oilseeds sector. This study examines the impact of alternative trade liberalization policies on the social welfare of Myanmar’s oilseed sector using a partial equilibrium multi-market model. Welfare is analysed by evaluating producer and consumer surplus changes. Simulation results suggest that liberalizing groundnut seed trade has a positive net effect on the whole oilseed sector while sesame trade liberalization is better for the major edible oils sector. An import quota expansion affects the total edible oil sector positively while negatively affecting the two major oilseed sectors. Therefore, policy-makers should not ban potential groundnut and sesame trade. Palm oil quota restrictions should be liberalized for domestic poor groups but policies that compensate the losses of disadvantaged sectors or minimize the negative impacts on those groups are also required.