Economic growth and agricultural development: What roles for food price and trade policies?
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Transcript of Economic growth and agricultural development: What roles for food price and trade policies?
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Economic growth and agric. development: What roles for food price and trade policies?
Kym Anderson
University of Adelaide, Australian National Universityand Chair, IFPRI Board of Trustees
IFPRI Roundtable on Agriculture, Food and Nutrition Security,Peking University, Beijing, 13 May 2015
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The past three decades: China maintained food self-sufficiency despite rapid industrialization
Growth in farm output kept pace with growth in domestic demand, due to:
Household Responsibility System allowing productivity catch-up
Increased public investment in agric R&D, rural infrastructure, & rural human capital
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China’s agric productivity growth (%/year) Source: Fuglie et al. (2012)
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The past three decades: China maintained food self-sufficiency despite rapid industrialization
Growth in farm output kept pace with growth in domestic demand, due to:
HRS allowing productivity catch-upIncreased public investment in agric R&D, rural infrastructure, & rural human capitalGradual reductions in direct and indirect disincentives to farmers
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Nominal rate of govt. assistance to agric and manufacturing in ChinaSource: Updated from Jikun Huang et al. (2009)
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Nominal rate of assistance to agric in China and high-income countriesSource: OECD (2013)
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What are China’s policy options for maintaining national food security …
… while also reducing the rural-urban income gap, poverty, and soil and water degradation?
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What are China’s policy options for maintaining national food security …
One option: limit competition from imports of rice, wheat, meat & milk
Helps those farmers, but hurts consumers of those goods and adds further soil & water degradation
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Modeling the world economy in 2007 and 2030: China’s food self sufficiency Source: Anderson and Strutt (Food Policy, Dec. 2014)
China’s self-
sufficiency in 2007
(%)
Self-suff. in 2030 (%), asssuming no policy changes
Import tariff (%) to ensure
self-suff. in rice wheat, meat &
milk, 2030
Rice 101 95 196Wheat 103 97 114Beef & sheepmeat 94 89 255Pork & poultry 101 37 164Dairy products 97 75 159Maize 105 98Oilseeds (soy, palm …) 56 35
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Alternative policy options for ChinaBoost agric productivity through more investments in agric R&D, rural infrastructure, and rural human capitalCreate/improve markets for labor, capital, land, waterReplace farm price-support policies with generic conditional cash transfers to poor (& to reduce rural-urban income gap)
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Share of adult population with bank account or equivalent, 2014 (%)Source: World Bank (2015), The Global Findex Database 2014
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Advantages for China of avoiding agric protection growth pathway
Consumers will get cheaper food and a more-varied dietLess stress on soil & water resourcesAvoids disputes with WTO membersOpens possibility for China to use G20 Presidency in 2016 to lead completion of Doha Round & reform of WTO
benefits from which would be largest for China
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Thanks!
Huang, J., S. Rozelle, W. Martin & Y. Liu (2009), “China”, Ch. 3 in Distortions to Agricultural Incentives in Asia (eds. K. Anderson & W. Martin), Washington DC: World Bank
Anderson, K. & A. Strutt (2014a), “Food Security Policy Options for China: Lessons from Other Countries”, Food Policy 49: 50-58, December
Anderson, K. & A. Strutt (2014b), “Emerging Economies, Productivity Growth, and Trade with Resource-Rich Economies by 2030”, Australian Journal of Agricultural and Resource Economics 58: 590-606, October
World Bank’s Distortions to Agricultural Incentives database, from which the NRAs are freely available at www.worldbank.org/ agdistortions