2010), ‘How do Agricultural Policy Restrictions to Global Trade and Welfare Differ Across Commodities

For decades the world’s agricultural markets have been highly distorted by government policies, but differently for different commodities such that a ranking of weighted average nominal rates of assistance across countries can be misleading as an indicator of the trade or welfare effects of policies affecting global markets. This article develops two theory-based indicators, drawing on the recent literature on trade restrictiveness indexes. It estimates those indicators for each of 28 key agricultural commodities from 1960 to 2004,based on a sample of 75 countries that together account for more than three-quarters of the world’s production of those agricultural commodities. Key words: agricultural policies, distorted commodity markets, trade restrictiveness index. JEL codes: F13, F14, Q17, Q18. To compare agricultural distortions across countries, it is common to calculate weighted averages of nominal rates of assistance (NRAs) or consumer tax equivalents (CTEs) of those policies for key products. Those national aver-ages vary considerably and tend to be high for high-income countries (OECD 2008) and lower or even negative for developing coun-tries (Krueger, Schiff, and Valdés 1988). NRAs also vary greatly across commodities. Unsub-sidized exporters of a particular product are keen to know by how much global trade in that product has been reduced by other coun-tries ’ policies, for that influences the amount of effort they are willing to expend in getting together with similar countries to seek more liberalization via trade negotiations