Promise or pitfall? The limited gains from agricultural trade liberalisation for developing countries

This article may be used for research, teaching and private study purposes. Any substantial or systematic reproduction, redistribution , reselling , loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express or implied or make any representation that the contents will be complete or accurate or up to date. The accuracy of any instructions, formulae and drug doses should be independently verified with primary sources. The publisher shall not be liable for any loss, actions, claims, proceedings, demand or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or arising out of the use of this material. It has become an article of faith in international trade negotiations that farmers in developing countries have much to gain from agricultural trade liberalisation. This paper assesses the evidence for such claims, relying on World Bank data and analyses, United Nations trade data, and other economic modelling carried out to inform the current round of World Trade Organisation negotiations. It concludes that the promise of agricultural trade liberalisation is overstated, while the costs to small-scale farmers in developing countries are often very high. Introduction It has become an article of faith in international trade negotiations that farmers in developing countries have much to gain from agricultural trade liberalisation. The World Bank issues study after study touting the potential gains to the rural poor of policies that reduce tariffs, subsidies, and other barriers to agricultural trade. Meanwhile, campaigners for global justice, such as the international development agency Oxfam, assert that such reforms to rich country agricultural policies will represent a major step in reducing poverty in the global South. This paper assesses the evidence for such claims. It concludes that the promise of agricultural trade liberalisation is overstated, while the costs to small-scale farmers in developing countries are often very high. The promise is that reforms will reduce overproduction in the global North. Prices will rise, benefiting all producers. Developing countries, which are seen to have a comparative advantage in agriculture, will gain rising shares of export markets for their agricultural goods. In essence, the promise of agricultural liberalisation is the lure of export markets.