Agricultural and trade policy reforms in Latin America: impacts on markets and welfare

Farm earnings in Latin America have been depressed by pro-urban and anti–trade biases in national policies and by the agricultural support policies of richer countries. These policies have reduced economic welfare and hampered trade and growth, and may well have added to income inequality. This paper synthesizes results from a World Bank project that provides: measures of the extent to which national policies have changed farmers’ price incentives; partial equilibrium indices of the impact of farm policies on trade and economic welfare; general equilibrium estimates of trade, welfare and poverty effects of global reforms retrospectively and prospectively; comparisons with similar estimates for Asia, Africa and high-income countries; and a discussion of prospects for agricultural policy reform.