Distortions to Agricultural Incentives in Asia (World Bank by Kym Anderson, Will Martin

By Kym Anderson, Will Martin

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An ad valorem tariff or export subsidy is the equivalent of a production subsidy and a consumption tax at the same rate expressed as a percentage of the border price. For this reason, such tariffs and subsidies are captured in the NRAs and CTEs at the point in the value chain at which a product is first traded. To obtain the NRAs for farmers, the authors of the country studies have estimated or guessed the extent of pass-through back to the farmgate and added any domestic farm output subsidies.

Our research project’s agricultural NRAs and CTEs are similar in spirit to the OECD estimates, but there are also important differences, which are outlined below. Our third purpose is to enable economic modelers to use the NRAs as producer price wedges for individual primary and lightly processed agricultural products and to use the CTEs as consumer price wedges in single-sector, multisector, and economy-wide policy simulation models by allocating these wedges to particular policy instruments such as trade taxes or domestic producer or consumer subsidies or taxes.

4 Sources: Author compilation; Anderson and Valenzuela, 2008; estimates reported in chapters 2–12 of this volume. Note: Dispersion for each country is a simple five-year average of the annual standard deviation around the weighted mean of the NRAs across covered products. — ϭ no data are available. a. The unweighted average is the simple average across the relevant economies of the simple five-year dispersion measure averages. b. Pakistan: 1960–64 is 1961–64. Taiwan, China: 2000–04 is 2000–03. Vietnam: 1985–89 is 1986–89.

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