|
|
|
|
|
|
February 2004
Reform can't wait
| A great achievement of the URAA was to cap tariffs and other supports and to make them more transparent. Thus, the whole world can now see more clearly how large the burden is on world agricultural trade, on food consumers in most countries, and on taxpayers in many countries. Farmers in developed and developing countries can see how high the remaining barriers to their exports are, and how uneven and unfair the world’s agricultural marketplaces can be. For example, globally, agri-food tariffs average 62 percent, in contrast to U.S. tariffs on agricultural products, which average only 12 percent. Clearing away the remaining inefficient and costly agricultural policies should be the order of the day. |
|
A big obstacle to further reform is the reality that some people’s livelihood can be hurt by trade liberalization and agricultural policy reform. Any losses they face, however, are outweighed by the gains that most people would see from reforms. Strengthening the economic infrastructure and vital services of the rural sector and providing adjustment assistance to those who lose income from reforms should be possible in the developed countries. |
|
|
|
|
In developing countries, the reform process itself could be adjusted in multilateral negotiations. Farmers who have few alternatives and are not ready for global competition could be afforded longer adjustment periods. Since prices for most agricultural commodities are expected to rise in the wake of reform, benefiting farmers worldwide, consumers of staple foods in relatively poor countries that don’t currently have import barriers could also be hurt. Decisions about adjustment assistance and flexibility in meeting policy reform objectives should be informed by past experiences with support for agriculture. Instead of propping up farm prices or encouraging greater production of specific products, subsidies are better spent on education, health care, and rural infrastructure, or as direct grants to rural households. |
|
The whole economy, and U.S.
agriculture, will benefit by moving decisively, now, to continue to open
up global markets for agricultural products. Failure to further reform
global trade policies and domestic agricultural policies will make much
of the foreseeable demand growth in the next decades off limits to U.S.
suppliers. In addition, agricultural product prices fac ing U.S. farmers
will be lower than they otherwise would be. Another consequence of
failing to reform trade policies is that U.S. consumers and food
processors would continue to face high tariffs on certain imports.
Failing to push reforms forward raises further risks. Developed countries could backslide, relying
more on protectionist policies. Developing countries could also make
greater use of misguided policies as their growing wealth allows them to
make the wrong choices: higher tariffs and commodity subsidies.
|
|
 |
Seizing the Opportunities from Trade |
|
Agricultural trade is critical for U.S. Agriculture |
|
|
Inefficient agricultural policies, all over the globe |
|
|
Policy reform works |
|
For more information |
|
|
From the Foreign Agricultural Service: |
|
|
|
U.S. Agricultural Trade |
|
|
Trade Policy |
|
|
Trade Agreements |
|
|
Trade News and Data |
|
|
Trade Trends |
|
|
Start Trading |
|
From the Economic Research Service: |
|
|
|
The U.S. Ag Trade Balance. . . More Than Just A Number |
|
|
U.S. Food Sector Linked to Global Consumers |
|
|
Structure of the Global Markets for Meat |
|
|
North American Agricultural Market Integration and Its Impact on the Food and Fiber System |
|
|
