World Bank report cites agriculture trade reform to alleviate poverty
A report released by the World Bank Monday reaffirms that liberalization of agricultural trade policies by industrialized countries will go a long way to reduce poverty in developing countries.
“Developing countries are investing to increase their agricultural productivity, but these gains will not be fully translated into poverty reductions unless industrial and some middle-income countries reduce agricultural trade protections,” the World Bank said, regarding its report, “Global Agricultural Trade and Developing Countries.”
“In the absence of reduced protection in these countries, increased productivity in agriculture will instead give rise to overproduction and price declines for many commodities, undermining competitive poor countries’ efforts to expand exports and rural incomes,” the bank added.
The report cited that while agricultural protection in industrialized countries remains high, developing countries on average have lowered their agricultural tariffs from 30 percent in 18 percent during the 1990s.
Many developing countries have also eliminated other forms of import restrictions, abandoned multiple exchange rate systems that penalize agriculture, and ended most export taxes.
The World Bank report also provides comprehensive analysis of individual commodities, such as sugar, dairy, rice, wheat, groundnuts, fruits, vegetables, cotton, seafood and coffee, that suffer in the developing world because of industrialized countries protections.
“Subsidies have similar effects, depressing world prices and inhibiting entry by inducing surplus production by noncompetitive, and often large producers,” the bank said. “Cotton subsidies in the United States and European Union, for example, have reached $4.4 billion in a $20 billion market.”
For a complete review of the World Bank report, access online: http://www.worldbank.org/prospects/globalag.