2009年-世界发展银行全球_Agricultural_Price_Distortions_Poverty_and_Inequality_in_the_Philippines_33页_622kb

Summary: Agricultural Price Distortions, Poverty and Inequality in the Philippines

Core Content

This working paper examines the poverty and inequality implications of removing agricultural and non-agricultural price distortions in the Philippines, both domestically and internationally. The study uses a computable general equilibrium (CGE) model calibrated to the 2000 Social Accounting Matrix (SAM) and integrates results from global trade liberalization simulations. It evaluates six policy experiments to assess the effects of different liberalization scenarios on economic outcomes, particularly for the poorest segments of the population.

Main Viewpoints

• Trade and Policy History:
  The Philippines initially pursued an import-substitution strategy from the 1950s to the 1970s, which favored manufacturing over agriculture. This was followed by export promotion in the 1970s, but the protectionist policies remained skewed in favor of industrial goods. The country joined the WTO in 1995 and implemented trade reforms, but significant distortions in agriculture persist.

• Price Distortions:
  The nominal rate of assistance (NRA) to agriculture is a key indicator of policy-induced distortions. For example, coconut farming has consistently faced negative NRA due to export taxes and bans, while sugar and corn have positive NRA. The presence of government-controlled industries in the agricultural sector has maintained a monopsonistic grip on domestic prices, limiting competitiveness.

• Poverty and Consumption:
  Poor households, especially in rural areas, spend over 60% of their income on food, with rice and corn being major staples. Non-poor households spend less on food and more on services. The decline in poverty headcount from 50% to 34% between 1985 and 2000 was mainly in urban areas, with only modest reductions in rural regions.

• CGE Model Structure:
  The model includes 41 production sectors and four factors of production: skilled labor, unskilled labor, capital, and land. It accounts for government, firms, households, and the rest of the world. Household demand is modeled using a linear expenditure system, and tax adjustments are endogenously determined to maintain a fixed government balance.

Key Findings

• Global Liberalization (ROW-ALL):

  • Leads to higher export prices and demand for Philippine products.
  • Sugar and raw fruits/vegetables see the most significant export demand shifts.
  • Agricultural output and value added prices increase by 3.5% and 3.9%, respectively.
  • Agricultural-specific factors (land and capital) see higher returns than non-agricultural ones.
  • Unskilled wages rise more than skilled wages.
  • Non-agricultural output contracts slightly, but prices still increase due to higher export and domestic prices.

• Global Liberalization in Agriculture Only (ROW-AGR):

  • Results in smaller magnitude effects compared to ROW-ALL.
  • Agricultural export prices rise, but domestic prices increase less than import prices.
  • Domestic demand for agricultural products increases, leading to expansion in domestic output.
  • Non-agricultural exports decline slightly, while imports and domestic demand rise.
  • Non-agricultural output and prices still increase due to higher export and domestic prices.

• Full Unilateral Liberalization (PHIL-ALL):

  • Eliminates all domestic trade distortions, leading to a significant decline in import prices (7.2% for agriculture, 2.1% for non-agriculture).
  • Agricultural imports expand by 17%, while non-agricultural imports rise by 4.7%.
  • Domestic demand for agricultural products declines more than for non-agricultural goods.
  • Agricultural output contracts, while non-agricultural output expands.
  • Factor returns (especially in agriculture) fall significantly, with unskilled wages decreasing more than skilled wages.

• Unilateral Agricultural Liberalization (PHIL-AGR):

  • Reduces local import prices for agriculture by 7.9%, leading to a 17% increase in agricultural imports.
  • Removes domestic agricultural distortions, improving cost efficiency for export-oriented light processing sectors.
  • Agricultural output and value added prices fall, but the poorest rural households benefit the most due to their reliance on agriculture and unskilled labor.

Combined Scenarios

• COMB-ALL (global and domestic liberalization):

  • Poverty declines slightly, while inequality increases marginally.
  • The poorest of the poor, particularly in rural areas, benefit from the changes due to their strong dependence on agriculture.

• COMB-AGR (global and domestic agricultural liberalization):

  • Similar to COMB-ALL, but with more pronounced effects on the agricultural sector.
  • The poorest households are the main winners, as their income is more closely tied to agricultural production.

Policy Implications

• Global Liberalization Alone is poverty-reducing but has limited impact on the poorest, as it primarily benefits urban and non-agricultural sectors.
• Domestic Liberalization Alone (especially in agriculture) can lead to a contraction in agricultural output and a decline in factor returns, particularly for unskilled labor.
• Combined Liberalization has mixed effects, reducing poverty slightly but increasing inequality. However, the poorest rural households are the main beneficiaries.
• Trade Policy Reforms in agriculture need to be carefully managed to avoid adverse effects on the most vulnerable groups, especially given the sector's importance to rural livelihoods.

Conclusion

The study highlights the complex relationship between trade liberalization, agricultural productivity, and poverty reduction in the Philippines. While global liberalization can enhance export competitiveness and reduce poverty, it may also increase inequality. Domestic liberalization, on the other hand, can lead to contraction in agricultural output and lower returns for agricultural factors. Therefore, a balanced approach to trade reform is necessary to ensure that the poorest households, particularly in rural areas, do not bear the brunt of the transition.