Presented by Eugenio Díaz-Bonilla, senior research fellow, IFPRI. Read more: http://www.ifpri.org/event/options-global-agricultural-trade-after-nairobi

1. INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
IFPRI
The Political Economy of
the Agricultural Negotiations:
What to Expect? How to Move Forward?
Eugenio Díaz-Bonilla
“Options for global agricultural trade after Nairobi
Highlights of the 10th World Trade Organization ministerial
conference and next steps.”
February 23, 2016

2. IFPRI
General Context
 Heterogeneity across countries/interests
 Economic cycles and trends
 Different interests, visions, and roles
• Traditional dilemma of agricultural policies:
high prices (helping producers, supply);
low prices (helping consumers, demand)
 Economic, political, and legal issues
Page 2

3. IFPRI
Land Structure
Page 3
Land structure: Average size of holdings and concentration
Region/country Average size Gini index
Africa 2.9 0.53
Asia Developing 2.2 0.57
LAC 87.1 0.82
USA 187.0 0.64
EU 27.3 0.59
Japan/Korea 1.1 0.47
Canada 349.1 0.74
Source: FAO.

4. IFPRI
Page 4
Share of World Agricultural Production
Source: Author from FAOSTAT

5. IFPRI
PSEs OECD
Page 5
1995–1999 2000–2004 2005–2009 2010–2014
Developed
countries a
Total USD
billion
218.4 206.5 218.0 217.8
without EU
USD billion
103.9 104.9 91.4 107.6
EU % total 52.4 49.2 58.0 50.6
Japan % total 25.1 23.0 19.1 25.5
US % total 16.1 21.1 15.0 15.4
Developing
countries b
Total USD
billion
15.6 46.5 101.2 282.9
w/o China 13.9 27.3 50.3 78.1
China % total 11.2 41.2 50.3 72.4
a/ The developed countries included are Australia, Canada, European Union, Japan, New Zealand,
Norway, Switzerland, and the United States.
b/ The developing countries included are Chile, Mexico, Turkey, Brazil, China, Indonesia, Kazakhstan,
Russian Federation, South Africa, and Ukraine.
Source: OECD

6. IFPRI
Page 6
3 developed
17 developing
USA
EU, Japan,
Korea,
Switzerland,
Norway
Several groups
of developing
countries:
LDCs
G-33
NorthSouth “Farmers Not
Competitive”
Agriculture is
special
“Farmers
Competitive”
Agriculture
treated as other
sectors
G-20
Cairns Group
Trade Groups

7. IFPRI
Other Actors
 Negotiators/diplomats
• Expand own policy space; restrict others.
• Producers’ view; partial equilibrium
• Legal approach
 Economists
• Coordination problems: international rules as “public good”
• Welfare measured by consumption; general equilibrium
• Full employment, smooth adjustment vs unemployment, transition costs
 Politicians
• Shorter term problems of producers AND consumers
 Civil society
• Preference for protectionism (even though is tax on food)
• Developing countries as societies of small farmers with food surpluses
• Market concentration; world economy more volatile
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8. IFPRI
Conclusions
 Two broad narratives in negotiations
• AoA as SDT for industrialized countries
• Developing countries very different; they have a lot of policy
space.
 Green Box
• Separate public goods from income support; within the latter
identify social safety net for the poor
 Developed countries
• Environmental payments. Truly decoupled income support.
Reduce market protection.
 Better categories for SDT?
• Typology food security (Diaz-Bonilla et al 2000; Diaz-Bonilla and
Thomas, 2015, 2016)
• Systemically important countries?
 Export restrictions disciplines Page 8

9. IFPRI
Conclusions
 Acknowledge problems of small and marginal farmers
in developing countries, particularly SSA and Asia
(“specific factors of production,” unemployment,
transition costs)
• Balance poor consumers and poor producers.
• International income safety net focused on poverty in low income
developing countries? It would also help with SDG1 and SDG2.
 Analysis of implications of COP21 and SDGs for
international trading system. Avoid fragmentation of
multilateral trade system (SDG17).
Page 9

10. IFPRI
Conclusions
 Acknowledge problems of small and marginal farmers
in developing countries, particularly SSA and Asia
(“specific factors of production,” unemployment,
transition costs)
• Balance poor consumers and poor producers.
• International income safety net focused on poverty in low income
developing countries? It would also help with SDG1 and SDG2.
 Analysis of implications of COP21 and SDGs for
international trading system. Avoid fragmentation of
multilateral trade system (SDG17).
Page 9