By OECD (Organisation for Economic Co-operation and Development)
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Additional resources for Agricultural Policy and Trade Reform, Potential Effects at Global, National and Household Levels
Additionally, producers are assumed to behave as if there were no uncertainty even though, in reality, policy change will carry with it changes in exposure to risk, an issue that has been explored in recent OECD analyses of the effects of risk in the context of decoupling. Moreover, the model does not address implementation and adjustment costs which may accompany policy change, especially policy change in a developing country context (Charlton and Stiglitz, 2005). Policy reform is often assumed, including in the present study, to occur in a situation of full employment.
However, apart from Brazil, the welfare changes attributed to OECD agricultural policy reforms are, whether positive or negative, relatively small. Notice that in contrast to the result obtained from multi-sectoral reform, the sub-Saharan Africa region is shown to gain slightly when OECD agriculture trade protection and support is reduced. Whether there are net gains or losses for any particular country depends on its net trade position in those commodities whose prices change with policy reform as well as the magnitude and direction of those price changes.
Specific tariffs are converted into ad valorem AGRICULTURAL POLICY AND TRADE REFORM: POTENTIAL EFFECTS AT GLOBAL, NATIONAL AND HOUSEHOLD LEVELS – ISBN-92-64-02573-1 © OECD 2006 Chapter 2. Global Market, National and Sectoral Impacts – 35 equivalents using a procedure that begins by assigning each country to a reference group of similar countries. The import unit value used in converting a country’s specific tariffs into their ad valorem equivalents is the median unit value of world-wide exports originating from its reference group.
Agricultural Policy and Trade Reform, Potential Effects at Global, National and Household Levels by OECD (Organisation for Economic Co-operation and Development)