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GTAP Resource #7350

"Redirecting Agricultural Subsidies to Achieve Global Sustainability Goals"
by Laborde, David, Elsa Olivetti and Valeria Pineiro

Achieving a sustainable global food system requires a concerted effort by the international community, with the World Trade Organization (WTO) playing a pivotal role as a platform for international dialogue and negotiation. However, despite a decline in average domestic support levels among OECD countries post the Uruguay Round Agreement on Agriculture, reforms have stagnated since 2008. Trade wars and the impact of COVID-19 have led to increased support levels, with global agricultural subsidies reaching approximately $600 billion annually, primarily concentrated in a few countries. In parallel, repurposing agricultural subsidies increasingly emerges as a crucial step to address the intricate challenges facing global food systems: ensuring food security, promoting nutrition, safeguarding environmental sustainability, and supporting livelihoods.
Using MIRAGRODEP, a world Computable General Equilibrium model, this paper explores the need of reducing and removing trade-distorting domestic support within the WTO’s agricultural negotiations. Different policy scenarios are developed and their impacts on food security, nutrition and climate outcomes are investigated. The policy scenarios illustrate the elimination of distortions at national and global levels, progressively addressing issues of global inequality and policy dynamics in the Global South.
The results indicate that a cross-border support redistribution yields improvements for low- and middle-income countries, contributing to a more sustainable global food system. This underscores the need for a radical rebalancing of policies worldwide. Additionally, the modelling work also reveals that solely removing existing distortions will not comprehensively address the challenges facing global food systems. It emphasizes the importance of investing in productivity gains and addressing productivity gaps.

Resource Details (Export Citation) GTAP Keywords
Category: 2024 Conference Paper
Status: Not published
By/In: Presented during the 27th Annual Conference on Global Economic Analysis (Fort Collins, Colorado, USA)
Date: 2024
Version: Preliminary Version
Created: Olivetti, E. (4/15/2024)
Updated: Olivetti, E. (6/3/2024)
Visits: 177
- Sustainable development
- Trade and the environment
- Agricultural policies
- Partial and general equilibrium models
- Caribbean
- Central America
- Global
- South America

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Preliminary Versoin - Do not quote without permission

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