Agriculture Reference
In-Depth Information
trade policy formation and negotiation, with the power to press for further
agricultural protection on self-sufficiency as well as distributional grounds
(Anderson et al. 2002; Tong 2003).
Anderson et al. (2002) also put the view that closing the rural-urban
per capta ncome gap wll not be acheved by the use of protecton of
the agrcultural sector n that the protecton wll rase land rents and land
values wthout reducng the numbers of the rural poor. Growth n rural
per capita incomes will come, as it has in the industrialised countries,
from productivity increases in the agricultural sector, the development of
off-farm ncome opportuntes for rural households and the mgraton of
workers to urban areas (Chang and Tyers 2003). In this paper we examine
the costs that would be borne by the Chnese economy f t attempted to
maintain or increase its levels of self-sufficiency in agricultural commodities,
rather than contnung to open ts agrcultural markets. We also address
the Anderson et al. view about urban-rural income distribution.
In an early analysis, Yang and Tyers (1989) used a global agricultural
sector model to examne the mplcatons of rapd ncome growth on the
composton of food consumpton and the mplcatons of ths for food self-
sufficiency. They found that the anticipated redistribution of consumption
toward lvestock products would rase mport demand for feed grans and
that this would make the maintenance of self-sufficiency through protection
very costly. Because ther analyss was restrcted to the agrcultural
sector, however, they could not examine the redistributive and overall
contractionary effects of the protection needed to maintain self-sufficiency.
In this paper we do this using a more general global model, the scope of
which is the entire economy. Our model is adapted originally from GTAP,
1
which allows for a multi-region, multi-product general equilibrium analysis.
Following Yang and Tyers (2000), to this GTAP base is added independent
representations of governments' fiscal regimes, with both direct and
ndrect taxaton.
2
We begin by using this model to project the world economy to 2010,
3
noting the trends in the self-sufficiency rates for agricultural products in
China. We then ask two questions. First, if China's food self-sufficiency
rates are to be held constant to 2010, will increases in protection be
required? Second, what increases in protection would be required to
