Kym Anderson

Wine Quality and Varietal, Regional and Winery Reputations: Hedonic Prices for Australia and New Zealand

We estimate hedonic price functions for premium wine from Australia and New Zealand, differentiating implicit prices for sensory quality ratings, wine varieties and regional as well as winery brand reputations over the vintages 1992-2000. The results show regional reputations have become increasingly differentiated through time (although less so for New Zealand). In particular, cool-climate regions are becoming increasingly preferred over other regions in Australia. In each country, price premia associated with both James Hallidays and Winestate magazines sensory quality ratings, and with Hallidays winery ratings and classic wine designations, are highly significant. Copyright 2003. The Economic Society of Australia.

Distortions to agricultural incentives in Asia

This study is part of a global research project seeking to understand the changing scope and impact of the policy bias against agriculture and the reasons behind agricultural policy reforms in Africa, Europes transition economies, Latin America and the Caribbean, and Asia. One purpose of the project is to obtain quantitative indicators of the effects of recent policy interventions. A second objective is to gain a deeper understanding of the political economy of trends in the distortions in agricultural incentives in various national settings. The third goal is to use this deeper understanding to explore the prospects for reducing the distortions in agricultural incentives and discover the likely implications for agricultural competitiveness, equality, and poverty reduction in many countries, large and small. This book provides an overview of the evolution of the distortions to agricultural incentives caused by price and trade policies in the World Bank-defined regions of East Asia and South Asia. The volume includes an introduction and summary chapter and commissioned studies of three Northeast Asian, five Southeast Asian, and four South Asian economies. The chapters are followed by two appendixes. The first appendix describes the methodology the authors have used to measure the nominal and relative rates of assistance for farmers and the taxes and subsidies on food consumption. The second appendix provides summaries of the authors annual estimates of these rates of assistance across the focus economies. Together, the 12 economies the authors study account for no less than 95 percent of the regions agricultural value added, farm households, total population, and total gross domestic product.

Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries

In seeking to explain why poor countries tend to choose policies that tax agriculture relative to manufacturing while rich countries do the opposite, archetypical parameters for a poor agrarian economy and a rich industrial one are inserted in a computable general equilibrium model to simulate the medium-term effects on income distribution of policies that distort the relative prices of tradables. The model includes a non-tradables sector and intermediate inputs, realistic features that ensure even greater skewness in the distributional effects of protection than simpler models suggest. The magnitude of the results helps explain the tendency for countries to change gradually from taxing to subsidizing agriculture relative to manufacturing as their economies develop. The paper draws out the implications of the analysis for agricultural and trade policy reform in the 1990s.

Distortions to Agricultural Incentives : A Global Perspective, 1955-2007

This book provides an overview of the evolution of distortions to agricultural incentives caused by price, trade, and exchange rate policies in a large sample of countries spanning the world. This chapter begins with a brief summary of the long history of national distortions to agricultural markets. It then outlines the methodology used to generate annual indicators of the extent of government interventions in markets, details of which are provided in Anderson et al. (2008a, 2008b) and appendix A of this volume. A description of the economies being examined and their economic growth and structural changes over recent decades is then briefly presented as a preface to the main section of the chapter, in which the nominal rate of assistance (NRA) and consumer tax equivalent (CTE) estimates are summarized across regions and over the decades since the 1950s. These estimates are discussed in far more detail in the regional studies that follow, chapters two-ten. A summary of an additional set of indicators of agricultural price distortions, presented in chapter eleven, is based on the trade restrictiveness index first developed by Anderson and Neary (2005). In chapter twelve, the focus shifts from countries to commodities, and various distortion indicators are used to provide a sense of how distorted each of the key farm commodity markets is globally. Chapter thirteen uses the studys NRA and CTE estimates to provide a new set of results from a global economy-wide model. It quantifies the impacts of reforms undertaken since the early 1980s, and of the policies still in place as of 2004, on global markets, net farm incomes, and welfare. Finally, that chapter concludes by drawing on the lessons learned to speculate on the prospects for further reducing the disarray in world agricultural markets.

Measuring Distortions to Agricultural Incentives, Revisited

Notwithstanding the tariffication component of the Uruguay Round Agreement on Agriculture, import tariffs on farm products continue to provide an incomplete indication of the extent to which agricultural producer and consumer incentives are distorted in national markets. Especially in developing countries, non-agricultural policies indirectly impact agricultural and food markets. Empirical analysis aimed at monitoring distortions to agricultural incentives thus need to examine both agricultural and non-agricultural policy measures including import or export taxes, subsidies and quantitative restrictions, plus domestic taxes or subsidies on farm outputs or inputs and consumer subsidies for food staples. This paper addresses the practical methodological issues that need to be faced when attempting to undertake such a measurement task in developing countries. The approach is illustrated in two ways: by presenting estimates of nominal and relative rates of assistance to farmers in China for the period 1981 to 2005; and by summarizing estimates from an economy-wide computable general equilibrium model of the effects on agricultural versus non-agricultural markets of the projects measured distortions globally as of 2004.

On the Need for More Economic Assessment of Quarantine/SPS Policies

Quarantine policy reviews are becoming more sophisticated yet they still focus primarily on the effects of restrictions solely on import‐competing producers. A fuller analysis that includes the consumers demonstrates that even if imported diseases were to wipe out a local industry, the gains to consumers might outweigh the losses to import‐competing producers from removing a ban on imports. This article provides the simplest partial equilibrium framework for thinking more about the economics of quarantine policy measures using an empirical analysis of Australia’s ban on imports of bananas.

The world's wine markets: globalization at work.

This absorbing book examines the period of massive structural adjustment taking place in the wine industry. For many centuries wine was very much a European product. While that is still the case today – three-quarters of world wine production, consumption and trade involve Europe and most of the rest involves just a handful of New World countries settled by Europeans – the importance of exports from non-European countries has risen dramatically over the past decade.

The relative importance of global agricultural subsidies and market access

The claim by global trade modelers that the potential contribution to global economic welfare of removing agricultural subsidies is less than one-tenth of that from removing agricultural tariffs puzzles many observers. To help explain that result, the authors first compare the OECD and model-based estimates of the extent of the producer distortions (leaving aside consumer distortions), and show that 75 percent of total support is provided by market access barriers when account is taken of all forms of support to farmers and to agricultural processors globally, and only 19 percent to domestic farm subsidies. Then the authors provide a back-of-the-envelope (BOTE) calculation of the welfare cost of those distortions. Assuming unitary supply and demand elasticities, that BOTE analysis suggests 86 percent of the welfare cost is due to tariffs and only 6 percent to domestic farm subsidies. When the higher costs associated with the greater variability of trade measures relative to domestic support are accounted for, the BOTE estimate of the latters share falls to 4 percent. This is close to the 5 percent generated by the most commonly used global model (GTAP) and reported in the papers final section.

Methodology for Measuring Distortions to Agricultural Incentives

This is a product of a research project on Distortions to Agricultural Incentives, under the leadership of Kym Anderson of the World Bank’s Development Research Group (www.worldbank.org/agdistortions). The authors are grateful for invaluable comments are due to many project participants including Ibrahim Elbadawi, Bruce Gardner, Esteban Jara, Tim Josling, Will Masters, Alan Matthews, Peter Lloyd, Johan Swinnen, Alberto Valdes and Alex Winter-Nelson, and for funding from World Bank Trust Funds provided by the governments of Ireland, Japan, the Netherlands (BNPP) and the United Kingdom (DfID).

Agriculture's 'multifunctionality' and the WTO

Are the agricultural policy reforms embodied in the Uruguay Round consistent with meeting domestic policy objectives such as providing adequate food security, environmental protection and viability of rural areas? This article examines the claim that agriculture deserves more price support and import protection than other sectors because of the non‐marketed externalities and public goods it produces jointly with marketable food and fibre (agriculture’s so‐called ‘multifunctionality’). Do these unrewarded positive externalities exceed the negative externalities from farming by more than the net positive externalities produced by other sectors? To what extent are those farmer‐produced spillovers under‐supplied, and what are the most efficient ways to boost their production to the socially optimal levels? The article concludes that there is little trade‐off required to meet domestic policy objectives on the one hand and agricultural protection reform objectives as embodied in WTO rules on the other.