How Rich-Country Agricultural Policies Affect Poor-Country Incomes

If the wealthiest nations abolished their trade-distorting agricultural policies, they would do far more to alleviate global poverty than the most ambitious direct aid programs could accomplish. This is the finding of a recent study by economists at the Center for Agricultural and Rural Development (CARD). CARD initiated a study to better understand the link between rich-country agricultural support and poor-country incomes. The analysis considered the removal of all agricultural protections in high-income countries, including export subsidies, tariffs, and tariff rate quotas, as well as input and output subsidies. The results show that developing countries would gain about $26 billion per year at 1997 prices with the removal of these subsidies. Rising global prices would improve the incomes of farmers who have had no prior income support. In addition, rich country taxpayers would benefit, with lower taxpayer burden and lower consumer food costs. For more information, see the article, "Rich Countries, Poor Countries, and the Doha Round Trade Negotiations" in the Summer 2002 issue of the Iowa Ag Review, available at Contact Sandy Clarke, CARD Communications, (515) 294-6257.

(Released July 2002)