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Price distortions in developing countries: A bias against agriculture

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  • ERNST LUTZ
  • PASQUALE L. SCANDIZZO

Abstract

This article evaluates the effects of government intervention in agricultural commodity markets for a sample of developing countries. It also presents a review of the methodology for quantifying the effects of the distortions on prices, supply, demand, incomes, and foreign exchange. The empirical results indicate that the agricultural sector in developing countries is often heavily taxed. As a consequence, agricultural production is discouraged, while consumption is subsidized, and the increases in government revenue provided by taxation are counterbalanced by a loss of foreign exchange earnings.

Suggested Citation

  • Ernst Lutz & Pasquale L. Scandizzo, 1980. "Price distortions in developing countries: A bias against agriculture," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 7(1), pages 5-27.
    • Handle: RePEc:oup:erevae:v:7:y:1980:i:1:p:5-27.
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    File URL: http://hdl.handle.net/10.1093/erae/7.1.5
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    Citations

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    Cited by:

    1. Rani, Usha & Reddy, G.P. & Prasad, Y.E. & Reddy, A. Amarender, 2014. "Competitiveness of Major Crops in Post-WTO Period in Andhra Pradesh," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 69(01), pages 1-17.
    2. Wiebelt, Manfred & Herrmann, Roland & Schenck, Patricia & Thiele, Rainer, 1992. "Discrimination against agriculture in developing countries?," Open Access Publications from Kiel Institute for the World Economy 458, Kiel Institute for the World Economy (IfW Kiel).
    3. repec:ags:ucdegw:233339 is not listed on IDEAS
    4. Ehui, M.K. & Ehui, Simeon K., 1997. "Optimal Pricing of Primary Commodities in Developing Countries: A Model from Sub-Saharan Africa," 1997 Occasional Paper Series No. 7 198054, International Association of Agricultural Economists.
    5. Aimable Nsabimana & Franklin Amuakwa-Mensah, 2018. "Does mobile phone technology reduce agricultural price distortions? Evidence from cocoa and coffee industries," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-24, December.
    6. Skully, David W., 1990. "Government Intervention in Agriculture: A Regulatory Approach," Staff Reports 278332, United States Department of Agriculture, Economic Research Service.
    7. Webb, Alan J., 1984. "Protection In Agricultural Markets," Staff Reports 277605, United States Department of Agriculture, Economic Research Service.
    8. Paarlberg, Philip L. & Webb, Alan J. & Morey, Arthur & Sharples, Jerry A., 1984. "Impacts Of Policy On U.S. Agricultural Trade," Staff Reports 277627, United States Department of Agriculture, Economic Research Service.
    9. Herrmann, Roland & Schenck, Patricia & Wiebelt, Manfred, 1990. "On the measurement of agricultural protection: how price uncertainty and limited substitution matter," Kiel Working Papers 414, Kiel Institute for the World Economy (IfW Kiel).
    10. Khedr, Hassan Aly, 1982. "Choice of Technique Under Price Distortion: Case Example of Jeopardized Agricultural Sector," Working Papers 233038, University of California, Davis, Agricultural Development Systems: Egypt Project.
    11. Kym Anderson & Rod Tyers, 1988. "Agricultural Protection Growth in Advanced and Newly Industrialized Countries," School of Economics and Public Policy Working Papers 1988-08, University of Adelaide, School of Economics and Public Policy.
    12. repec:ags:ucdegw:233038 is not listed on IDEAS
    13. Ali, Sonia Mohamed & Gardner, B. Delworth, 1982. "Economic Implications of the Policy for Pricing and Allocating Rice in Egypt," Working Papers 233339, University of California, Davis, Agricultural Development Systems: Egypt Project.
    14. Gautam, Virender, 1992. "Identification of patterns of producer and consumer protection levels in food commodities: a cross-country, aggregate and commodity-specific analysis," ISU General Staff Papers 1992010108000017588, Iowa State University, Department of Economics.
    15. Hoffmeyer, Martin & Schrader, Jörg-Volker, 1981. "A medium term outlook for selected agricultural commodities," Kiel Working Papers 133, Kiel Institute for the World Economy (IfW Kiel).

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