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Abstract
Trade negotiators and policy advisors are keen to know the relative contribution of
different farm policy instruments to international trade and economic welfare.
Nominal rates of assistance or producer support estimates are incomplete indicators,
especially when (especially in developing countries) some commodities are taxed and
others are subsidized in which case positive contributions can offset negative
contributions. This paper develops and estimates a new set of more-satisfactory
indicators to examine the relative contribution of different farm policy instruments to
reductions in agricultural trade and welfare, drawing on recent literature on trade
restrictiveness indexes and a recently compiled database on distortions to agricultural
prices for 75 developing and high-income countries over the period 1960 to 2004.
Results confirm earlier findings that border taxes are the dominant instrument
affecting global trade and welfare, but they also suggest declines in export taxes
contributed nearly as much as cuts in import protection to global welfare gains from
agricultural policy reforms since the 1980s.