2004年-世界发展银行全球_Tracking_Distortions_in_Agriculture___China_and_Its_Accession_to_the_World_Trade_Organization_26页_188kb

Summary of "Tracking Distortions in Agriculture: China and Its Accession to the World Trade Organization"

Core Content

This article explores the impact of China's accession to the World Trade Organization (WTO) on agricultural prices, focusing on the distortions that still exist in China's agricultural sector despite past trade liberalization efforts. It introduces a new methodology for estimating nominal protection rates, which account for differences in commodity quality and transport costs. The study highlights the complexity of trade liberalization effects on different types of agricultural producers and the importance of market integration in determining these impacts.

Main Views and Key Information

1. Trade Liberalization and Its Effects on Agricultural Prices

• Trade liberalization has offsetting effects on rural populations:

  • Positive effects: Increased exports boost employment and wages, improve access to inputs, and lower food prices for consumers.
  • Negative effects: Lower import prices reduce farm profits and may raise prices for domestic consumers and producers using agricultural goods as inputs.

• Government officials are particularly concerned about the impact on producer prices, as it affects farm incomes, rural stability, and national poverty levels.

2. Traditional vs. Nontraditional Sources of Protection

• Traditional sources of protection include tariffs, quotas, state trading, and nontariff barriers. These have been reduced significantly over the past two decades.

• Nontraditional sources of protection include:

  • Tax policies: Value-added tax (VAT) is applied to imports but not always to domestic agricultural products, creating asymmetric protection.
  • Export subsidies: China provided export subsidies for certain commodities, such as maize and cotton, to boost exports and increase domestic prices.
  • Tax rebates: Exporters of meat and other products receive tax rebates, which further distort domestic prices.

• These nontraditional policies have more significant effects on price distortions than traditional ones, especially in the context of China's WTO accession.

3. Methodology for Estimating Nominal Protection Rates

• The article introduces a disaggregated method to estimate nominal protection rates, which considers:
  • Commodity quality differences.
  • Transport costs.
  • Price gaps between domestic and international markets.
• This approach avoids the aggregation issues of traditional methods and provides more accurate insights into how trade liberalization affects different regions and commodities.

4. Key Findings from the Analysis

• Nominal protection rates for China's major agricultural commodities (rice, wheat, maize, soybeans) varied significantly:
  • Rice: -3% (weighted average), with some varieties having higher protection rates (e.g., Thai jasmine rice at 17%).
  • Wheat: 12% (weighted average), with specific varieties like U.S. hard red wheat having a 11% protection rate.
  • Maize: 32% (common variety).
  • Soybeans: 15% (common variety).
• The real protection rate for soybeans is higher than the official tariff rate due to the VAT applied at the border, which is not levied on domestic soybeans.

5. Market Integration and Its Role

• China's agricultural markets are highly integrated, especially between coastal and inland regions and between regional and village markets.
• This integration means that price changes at the border will affect domestic producers across the country.
• However, poor farmers in remote areas may be less affected due to high transaction costs and limited market access.

6. Implications of Trade Liberalization

• Trade liberalization could lead to lower domestic prices for certain commodities, but the actual impact varies by commodity, region, and market conditions.
• For high-quality wheat (e.g., North American baking-quality wheat), the demand is limited, so even with liberalization, domestic prices would not drop significantly.
• In contrast, low-quality wheat and soybeans may experience more substantial price changes, affecting small farmers more directly.

Conclusion

• The study emphasizes the importance of accurate measurement of protection rates to understand the effects of trade liberalization on agricultural prices.
• It highlights the complexity of China's agricultural market, where nontraditional policies play a key role in distorting prices.
• The main contribution is the development of disaggregated measures of protection, which can be used to assess the distributional effects of trade liberalization on different groups of farmers.

Key Tables and Data

• Table 1: Shows changes in nominal protection rates for China's major agricultural commodities from 1978 to 2000.
• Table 2: Lists export subsidies and tax rebates for selected agricultural commodities in 2001.
• Table 3: Provides detailed nominal protection rates for various agricultural commodities, including different varieties of wheat and soybeans, based on prices from October 2001.