Agricultural Liberalization and the Developing Countries: Debunking the Fallacies

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Today, agriculture remains the most distorted sector of the world economy.  Therefore, agricultural liberalization in the Doha negotiations is rightly the top priority. Because many of the potential exporters of agricultural products happen to be developing countries and many potential importers developed countries, liberalization in this area has an obvious North-South dimension.  But beyond this simple generalization, the public-policy discourse remains fogged by a number of fallacies that have been embraced by the leadership of the World Bank, IMF, OECD, Oxfam and the leading academic critics of globalization alike. This paper identifies six such fallacies and offers evidence and analysis to debunk them: (1) Agricultural border protection and subsidies are largely a developed-country phenomenon. (2) Developed-country agricultural subsidies and protection hurt the poorest developing countries most. (3) Developed-country subsidies and protection hurt the poor, rural households in the poorest countries. (4) Developed-country agricultural protection and subsidies constitute the principal barrier to the development of the poorest developing countries. (5) Agricultural protection reflects double standard and hypocrisy on the part of the developed countries. (6) What the donor countries give with one hand (aid), they take away with the other (farm subsidies).