The Impact of a New WTO Agricultural Agreement ... - Tufts University

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The Impact of a New WTO Agricultural Agreement on Cereals Markets in Sub-Saharan Africa CONTENTS Abstract…………………………………………………………………………………………...1 Introduction………………………………………………………………………………………2 1. Background on the WTO and Domestic Support to Agriculture 1.1 The Agreement on Agriculture ……………………………………………….6 1.2 The Agreement in Action: How Subsidies are Used ….....................................8 1.3 Shaping a New Agreement ..............................................................................10 2. The Impact of the Agreement on Agriculture on Sub-Saharan Africa 2.1 The Importance of Wheat and Maize in Sub-Saharan Africa ………………13 2.2 How Would Cereals Prices Respond to Subsidy Removal?...........................14 2.3 Would a Reduction in OECD Support Benefit Sub-Saharan Africa?.............16 3. Welfare Analysis: African Maize and Wheat Markets’ Response to a Reduction in OECD Domestic Support 3.1 Concept …………..……………………………………………………….....21 3.2 Data…………………………………………………………………………..29 3.3 Results ……………………………………………………………………….31 4. But Wouldn’t it Help Poor Farmers? A Discussion of Net Buyers and Sellers of Wheat and Maize in Ethiopia 4.1 Concept ……………………………………………………………………...43 4.2 Data..................................................................................................................47 4.3 Net Buyers and Sellers of Maize and Wheat.………………………………...54 By Expenditure Quintile………………….………………………………55 By Main Income Source………………………………………………….57 4.4 Discussion Producer-Retail Price Margin...................................................................58 Substitution………………………………………………………………62 Lessons...…………………………………………………………………62 Conclusion....................................................................................................................................65 Bibliography……………………………………………………………………………………66 Appendix A: Welfare Analysis Tables……………………………………………………….71 Appendix B: Ethiopian Household Data Tables…………………………………………….78
The Impact of a New WTO Agricultural Agreement on Cereals Markets in Sub-Saharan Africa LIST OF TABLES: 1. Predicted Cereals Price Increases from Global Domestic Support Removal…………………16 2. Net Welfare Effect of a 100% or 50% Reduction in Domestic Support, 2001: Maize……….72 3. Net Welfare Effect of a 100% or 50% Reduction in Domestic Support, 2001: Wheat……….75 4. Net Welfare Effects Summary – Maize – 2001……………………………………………….33 5. Net Welfare Effects Summary – Wheat – 2001……………………………………………….35 6. Summary of Household Characteristics……………………………………………………….78 7. Percent of Households Missing Values for Cereals Income and Expenditure………………..79 8. Household Expenditure per Adult Equivalent………………………………………………...80 9. Household's Main Source of Income………………………………………………………….80 10. Percentage of Households Recording Any Income………………………………………….81 11. Percentage of Households Recording Any Income From Specific Agricultural Activities…81 12. Households Participating In Cereals…………………………………………………………82 13. Net Buyers and Sellers of Cereals by Expenditure Quintile, Urban……………………...….84 14. Net Buyers and Sellers of Cereals by Expenditure Quintile, Rural………………………….85 15. Net Buyers and Sellers of Cereals by Household's Main Income Source…………………...86 LIST OF FIGURES: 1. The market for a cereal, in a net-importing country. 2. The market for a cereal, in a net-exporting country. 3. An initially net-importing country becomes a net exporter. 4. Change in CS and PS when price increases in a net-importing country. 5. Change in CS and PS when price increases in a net-exporting country. 6: Change in CS and PS when an initially net-importing country becomes a net exporter.
Page 1: The Impact of a New WTO Agricultura
Page 5 and 6: 2 INTRODUCTION “The rural poor, g
Page 7 and 8: 4 in agriculture, the welfare of fa
Page 9 and 10: 6 1. Background on the WTO and Dome
Page 11 and 12: 8 Of the three types of domestic su
Page 13 and 14: 10 for differences between internat
Page 15 and 16: 12 the G-20 suggests stricter adjus
Page 17 and 18: 14 Africa. They are important to th
Page 19 and 20: 16 subsidy removal. The range of es
Page 21 and 22: 18 However, these studies ignore mu
Page 23 and 24: 20 reside in rural areas where prim
Page 25 and 26: 22 country will be W. 5 Thus P is t
Page 27 and 28: 24 In a net-importing country, the
Page 29 and 30: 26 found that low-income countries
Page 31 and 32: 28 P KEY: W* W d a c b D S T S F D:
Page 33 and 34: 30 FAO questionnaires. The FAO also
Page 35 and 36: 32 consumed, QC 0 , was 429.7 thous
Page 37 and 38: 34 Benin 1886.9 364.0 0.08% Burundi
Page 39 and 40: Central African Rep. -765.0 -319.9
Page 41 and 42: 38 positive effects decrease. One c
Page 43 and 44: 40 but not in 2001. However, these
Page 45 and 46: 42 Most important, the net welfare
Page 47 and 48: 44 consumers, as well as producers,
Page 49 and 50: 46 the rural population report that
Page 51 and 52: 48 17 The HICES provides the measur
Page 53 and 54:
50 Adult Equivalent Scale: 16 Male
Page 55 and 56:
52 Since only 12% of rural househol
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54 missing all cereals values. We c
Page 59 and 60:
56 and sellers of cereals in urban
Page 61 and 62:
58 However, when we consider only t
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60 MT, is produced domestically. 24
Page 65 and 66:
62 information. The high marketing
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64 It is also important to note tha
Page 69 and 70:
66 Bibliography ActionAid. 2002.
Page 71 and 72:
68 Food and Agriculture Organizatio
Page 73 and 74:
70 Data Sources FAOSTAT, 2003-2004,
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72 Net Welfare Effect of a 100% or
Page 77 and 78:
74 Net Welfare Effect of a 100% or
Page 79 and 80:
Table 3: Net Welfare Effect of a 10
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78 APPENDIX B: Household Data Table
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80 Table 8. Household Expenditure p
Page 85 and 86:
Table 12. Households Participating
Page 87 and 88:
84 Table 13. Net Buyers and Sellers
Page 89:
Table 15. Net Buyers and Sellers of
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