agriculture – specific issues

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

Agriculture – Specific issuesData Day at the WTO


TARIFFS

Agricultural trade is still dampen by tariff and non tariff barriers• Agricultural tariffs 7 times higher than Non

Ag.• Combinations of border and non border

measures Lack of transparency of many measures

• Complex instruments• Weak notifications

Data sources: AMAD, IDB, MAcMap, MAcMapHS6, WTO notifications, National sources…

Overview

Numerous changes across time• Between years• Inside a given year

Seasonal protection• Challenge for the analysis: Calendar year

versus Crop year Endogeneity of tariff to price level

• Target domestic price

Tariff variation

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Illustration 2: Tariff volatility, the case of Wheat (EU)

Specific tariffs: 45% of agricultural protection • OECD countries• But… Reference price and ad valorem in

developing countries From price to unit value

• Product heterogeneity Different concepts of unit value

• Official = Negotiation Accessibility to information• Effective distortions = Economic impacts

Tariffs and Unit values: endogeneity problems Lack of robustness of bilateral unit values

• Unit value and preferences: who gets the rents? Exchange rate, unit values and mechanical on

AVE

Specific tariffs, Unit values and AVE

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trade uv_max uv_min uv_med

BRAZIL

Max > 100Max > 100 Max > 40

Illustration 1: unit value heterogeneity the case of Sugar (HS170111)

Entry prices, additional duties… Tariff rate quotas: tariffs, quantity, fill rates…

• WTO and preferential• Bound and applied level• Multilateral and allocated• Allocation method

What’s happen really on the field? Need of a transparent database on licenses

• Discretionary behaviorNew quota

• Assessing the real level of protection, rents etc.New research initiatives

More complex tools

Countries Inside rate applied

MacMapHS6 solution

Outside rate applied

South Africa 12.6 15.1 18.0Canada 5.7 15.9 17.3China 10.6 11.1 25.9South Korea 23.8 36.8 55United States 3.8 8.9 9.9Japan 20.0 28.2 31.6Panama 13.1 15.8 17,7Switzerland 30.1 53.2 83.6European Union 16.1 21.3 24.2All countries with TRQ

14.7 18.8 22.0

Illustration 3: The role of TRQ in measuring protection

Laborde (2008)


DOMESTIC SUPPORT

Subsidies Domestic support

• Notifications, box and coupling instruments• When notifications are not available:

researchers come with their own: Improving WTO Transparency, Shadow Domestic Support Notifications Measurement Issues, IFPRI

• Measurement of support: PSE of OECD Export subsidies

• Ad valorem / specific: level of subsidies and level of world prices

• Export Credit, Food Aid• Public monopoly

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Illustration 4: AMS – product specific cap

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400

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Base AMS New ceiling

Two different provisions

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Supporting Table DS:4

Current total AMS for product x: 1,049

WORLD TRADE

ORGANIZATION G/AG/N/country/number 17 March ....

(…) Committee on Agriculture Original: English

NOTIFICATION

http://docsonline.wto.org/

Illustration 4: AMS – product specific cap


OTHER INDICATORS

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1 Whether product is staple or part of the basic food basket 6 % women producers

1 % contribution to Caloric intake 6 % of production in disadvantaged regions

2 Domestic production as % of domestic consumption

7 % of value of production from the product

3 Domestic consumption as % of total world exports

7 % of agriculture income of households from the product

3 % exported by the largest exporting country

8 % of product processed

4 % domestic production on small land holdings

8 % of value addition to the product

4 % of small land holdings producing the product

9 % of customs tariff revenue

5 % of population/labour force employed in the production

10 % of food expenditure on the product

6 % low income farmers 10 % of income spent on the product

6 % of resource poor farmers 11 AMS or blue box subsidies and exported

6 % of subsistence farmers 12 Productivity per worker of the product

6 % vulnerable communities 12 Productivity per hectare of the product

Illustration 5: Special products

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• FAO provides data on the caloric intake in kcal by product

• Data is available for 124 products at the level of the FAO classification

• Example: Apples, Maize, Potatoes, Wheat, Sugar cane• There is no easy one-to-one match with the HS

classification used in WTO: but a (complex) concordance table exists

• Calculate share of contribution to total caloric intake for each product

• If this share is higher than [10 %] the product contributes significantly to caloric intake AND is thus a candidate for SP

Illustration 5: Special products – Contributions to calories intake

17Share of products that each contributes at least 10 per cent (5 per cent) to the total caloric intake; Based on products for which data are available; Data source: FAOstat

Country 10 % threshold 5 % threshold Country 10 % threshold 5 % thresholdA 2.0% 5.0% Q 3.0% 4.0%B 3.0% 4.0% R 3.9% 5.9%C 2.6% 3.4% S 0.9% 4.6%D 3.3% 9.9% T 1.8% 4.4%E 2.9% 4.9% U 1.7% 4.3%F 1.8% 3.6% V 2.7% 4.4%G 0.9% 3.6% W 3.7% 4.9%H 2.7% 4.5% X 2.9% 5.8%I 1.0% 5.2% Y 2.6% 4.3%J 2.0% 4.9% Z 2.7% 4.4%K 1.8% 6.3% AA 0.9% 4.5%L 2.0% 4.0% AB 1.9% 3.9%M 2.5% 3.4% AC 3.3% 4.4%N 3.8% 5.8% AD 1.9% 3.8%O 2.9% 4.8% AE 3.6% 7.1%P 1.9% 5.8% AF 1.8% 3.5%

Illustration 5: Special products – Contributions to calories intake


MEASURING IMPACTS

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Illustration 6: Possible Change in World Prices from Doha Round

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Source: ATPSM simulation, UNCTAD

Beyond agriculture Agriculture, Poverty and Hunger

Agriculture, Redistribution and Stabilization

Agriculture and Climate Change

Agriculture and Energy:• Biofuels


DATA SOURCES

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Data for agricultural trade

Data SourceTrade flows UN Comtrade, USDA, Models such as GTAP,

ATPSM, WTO IDBProduction FAO, USDA, national statisticsConsumption National statistics,

USDA (International Food Consumption Patterns)Market access

Applied tariffs Wits, UNCTAD Trains, ITC MAcMap, WTO IDBBound tariffs Wits, WTO CTSTariff rate quota AMAD, Wits

Domestic SupportAmber box, blue box, green box WTO notifications, USDA ERS

Export Subsidies WTO notifications, USDA ERSDistortions to agric. incentives World BankFood security, nutrition FAOElasticities GTAP, Wits SMART, FAO, USDASocial indicators World Bank WDI, ILOCommodity specific information e.g. ICO, IGC, UNCTAD InfocommCompetition in export markets ICT Market Access MapHousehold and community surveysIFPRI, World Bank

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Data Sources

http://comtrade.un.org/http://docsonline.wto.org/http://econ.worldbank.org/http://faostat.fao.org/http://wits.worldbank.org/witsweb/http://www.amad.org/http://www.ers.usda.gov/Data/http://www.gtap.org/http://www.ifpri.org/data/data_menu.asphttp://www.macmap.org/http://www.unctad.org/infocomm/anglais/indexen.htmhttp://www.worldbank.org/datahttp://www.wto.org/english/res_e/statis_e/Statis_e.htm

agriculture – specific issues

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