Trade policies to address vulnerability of
    the poor and opportunities for
        complementary actions


          Jo...
Overview of the presentation
 Conceptual background of the impacts of
  agricultural trade policy reform on the
  agricul...
Conceptual background

                   TRADE REFORM




LEVEL OF PRICES    PRICE VOLATILITY   TAX REVENUE




  Access ...
Conceptual background (Ctd.)

       Vulnerable households: those “likely to be
        pushed below (or deeper below) a ...
Conceptual background (Ctd.)

 Different types of poor households (Orden et.
  al 2004):
     Most marginalized farmers ...
Conceptual background (ctd.)




Source: Orden, Torero and Gulati (2004)
Conceptual background (ctd).

                           Bifurcations of world agriculture

Agricultural Domains          ...
Overview of the presentation
 Conceptual background of the impacts of
  agricultural trade policy reform on the
  agricul...
Emerging results from recent empirical
                     studies

 Current knowledge of agricultural trade reform
  im...
Emerging results (ctd.)


Percentage change in poverty head-count in Brazil and Chile
                            (by inco...
Emerging results (Ctd.)
         Rural poverty indices in a full liberalization scenario
                          (% chan...
Emerging results (ctd)
 All authors agree that
  (1)   agricultural trade reform will provide the most
        significan...
Overview of the presentation
 Conceptual background of the impacts of
  agricultural trade policy reform on the
  agricul...
Suggested policy actions
 Better anticipation of trade policy reform
  impacts on the most vulnerable
     Social risk a...
Suggested policy actions (Ctd.)

 Macro-level adjustments
     Strengthening of domestic markets
        Insure competi...
Suggested policy actions (ctd.)
 Micro-level interventions
     Enhancing the abilities of vulnerable households
      t...
Suggested policy actions (ctd.)

 Micro-level interventions (ctd.)
     Preventing short-run disruptions in income and
 ...
Upcoming SlideShare
Loading in …5
×

Trade Policies to address vulnerability of the poor and opportunities for complementary actions

367 views
307 views

Published on

Copenhagen,
August 24th 2005

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
367
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
9
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Trade Policies to address vulnerability of the poor and opportunities for complementary actions

  1. 1. Trade policies to address vulnerability of the poor and opportunities for complementary actions Joachim von Braun Director General International Food Policy Research Institute Copenhagen, August 24th 2005
  2. 2. Overview of the presentation  Conceptual background of the impacts of agricultural trade policy reform on the agriculture and food sector  Emerging results from recent empirical studies  Suggested policy actions to mitigate vulnerability to trade shocks
  3. 3. Conceptual background TRADE REFORM LEVEL OF PRICES PRICE VOLATILITY TAX REVENUE Access to Domestic Taxes and Markets Regulations CONSUMER AND PRODUCER PRICES
  4. 4. Conceptual background (Ctd.)  Vulnerable households: those “likely to be pushed below (or deeper below) a pre- defined welfare threshold”  Rural poor are vulnerable to agricultural trade reform due to:  Dependence on the agricultural sector for income  High share of income spent on food  Lack of physical assets, skills and access to credit and insurance
  5. 5. Conceptual background (Ctd.)  Different types of poor households (Orden et. al 2004):  Most marginalized farmers engaging in subsistence farming  Farmers producing for local and national markets  Globally competitive, market-oriented producers of cash crops
  6. 6. Conceptual background (ctd.) Source: Orden, Torero and Gulati (2004)
  7. 7. Conceptual background (ctd). Bifurcations of world agriculture Agricultural Domains Dominant Marginal Farms Large Small Agro-ecologies Sustainable Non-sustainable Using advanced Technologies Little connected to science science Markets Integrated Fragmented Agro-industry Competitive Noncompetitive Consumers Rich Poor People directly affected Few Many Source: von Braun 2004
  8. 8. Overview of the presentation  Conceptual background of the impacts of agricultural trade policy reform on the agriculture and food sector  Emerging results from recent empirical studies  Suggested policy actions to mitigate vulnerability to trade shocks
  9. 9. Emerging results from recent empirical studies  Current knowledge of agricultural trade reform impacts at the household level is rather limited  Relatively new issue  Requires analysis of complex linkages  Lack of consensus on measurement of “trade openness” and “poverty”  Lack of comparability between different studies  High variability of approaches based on  Characteristics of particular countries studied  Analytical interests of authors
  10. 10. Emerging results (ctd.) Percentage change in poverty head-count in Brazil and Chile (by income stratum) Non- Agriculture Labor Transfers Diversified Total agriculture Brazil -14.8 2.6 1.6 0.2 -2.5 -0.6 Chile -31.2 5.0 4 1.2 -1.9 -1.7 Hertel, Preckel, Cranfield and Ivanic 2003
  11. 11. Emerging results (Ctd.) Rural poverty indices in a full liberalization scenario (% change from base) Poverty headcount Poverty gap Poverty severity index Indirect Income Indirect Income Indirect Income tax tax tax tax tax tax Low education 0.30 0.83 1.01 1.56 1.27 1.96 salaried High education 1.02 1.55 0.29 0.86 0.35 0.99 salaried Civil servants -0.81 0.00 -0.24 0.40 -0.28 0.49 Low-education, O.20 0.61 0.36 1.07 0.46 1.37 self/unemployed High education, 0.00 0.73 0.05 1.03 0.08 1.36 self/unemployed Family business 0.00 0.00 0.45 1.45 0.50 1.64 Total 0.20 0.63 0.47 1.17 0.58 1.47 Source: Cororaton, Cockburn and Corong 2005
  12. 12. Emerging results (ctd)  All authors agree that (1) agricultural trade reform will provide the most significant gain in terms of welfare benefits (2) Some households will gain from agricultural trade reform, but others will loose NEED FOR COMPLEMENTARY ACTIONS
  13. 13. Overview of the presentation  Conceptual background of the impacts of agricultural trade policy reform on the agriculture and food sector  Emerging results from recent empirical studies  Suggested policy actions to mitigate vulnerability to trade shocks
  14. 14. Suggested policy actions  Better anticipation of trade policy reform impacts on the most vulnerable  Social risk analyses  stakeholder and institutional analyses  Importance of sequencing policies  Need for macroeconomic adjustments before trade reforms are undertaken  Need for micro-level policies before and during trade reform to support vulnerable populations
  15. 15. Suggested policy actions (Ctd.)  Macro-level adjustments  Strengthening of domestic markets  Insure competitive market structures-  Invest in infrastructure and transportation to enhance price transmission  Fiscal policy  Improve tax administration and collection  Tax replacement- need to be progressive
  16. 16. Suggested policy actions (ctd.)  Micro-level interventions  Enhancing the abilities of vulnerable households to take advantage of the new opportunities  Improve access to new technologies  Improve access to markets  Assist households to diversify their income portfolios (i.e. enhance labor mobility through access to educational opportunities)  Improve infrastructure and transportation for better access to markets, new technologies and to enhance labor mobility
  17. 17. Suggested policy actions (ctd.)  Micro-level interventions (ctd.)  Preventing short-run disruptions in income and consumption  Provide social protection  Labor market interventions  Direct income transfers  Price and tax subsidies  Provision of financial services to improve access to credit and insurance mechanisms

×