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ISU Expert Leads Report on Agricultural Trade Reforms for World Bank
January 13th, 2005
A World Bank report points to agricultural trade protection as a continuing problem in ongoing global trade negotiations, especially for developing countries.
John Beghin, an agricultural trade expert at Iowa State, was recently enlisted by the World Bank to bring top analysts together to sort through the effects of protections and policy reforms in agricultural markets. The resulting report, Global Agricultural Trade and Developing Countries, was released this week.
"The World Bank has been challenged by many critics to provide a deeper and more relevant assessment of farm and trade policy and their effects than they have done previously," Beghin said.
Beghin, the Martin Cole Endowed Chair in the Department of Economics and Center for Agricultural and Rural Development (CARD) at Iowa State, edited the report on agricultural trade reforms, along with Ataman Aksoy, a World Bank consultant. The World Bank provides loans, policy advice and technical assistance to low- and middle-income countries.
The report emphasizes that agricultural trade protection continues to be a major factor affecting world markets. Protection, in the form of border protections and domestic subsidies, remains high in industrial countries, while many developing countries have liberalized their agricultural trade policies.
"Rural income opportunities for the lowest-income countries are reduced because the policies of higher-income countries depress world prices," says Beghin. "Agricultural trade liberalization would induce significant price increases for most commodities."
A multilateral trade liberalization could have detrimental effects in some countries because of lost preferential trade agreements and higher commodity prices. Given the complexities of specific issues in agriculture, the report calls for a global solution for market liberalization.
"Rather than being self-contained, agricultural trade negotiations should involve concessions on other sectors and issues to identify overall reform packages that are palatable to all parties," Beghin said.
The report includes an analysis of the major agricultural and food trade issues. Several of the studies are based on an earlier analysis by the Food and Agricultural Policy Research Institute at CARD.
Beghin hopes the report sheds light on the harmful effects of distortions in agricultural markets. He said the studies attempt to show the implications of leveling the playing field in agricultural trade.
"It took eight rounds of World Trade Organization negotiations to dismantle protection in manufacturing," he said, "and it may take as long to remove protectionism in agriculture and food markets. So the debate on agricultural distortions will last for a while."
Beghin is on an informational tour, with stops at the World Trade Organization headquarters in Geneva, the Food and Agriculture Organization in Rome, and the Organization for Economic Cooperation and Development in Paris.
More information on the report is available at the World Bank Web site at www.worldbank.org; "News" tab, go to "Press Releases," and click on the Jan. 10 article "Agricultural Trade Reforms Key to Reducing Poverty."