Agenda

	3:00		Welcome/Introduction
			Joachim von Braun, Director General, IFPRI
	3:10		Statements by Panelists
			Sherman Robinson, Director, Trade and Macroeconomics Division, IFPRI Henning Tarp Jensen, Assistant Professor, Institute of Economics, University of Copenhagen Finn Tarp, Professor of Development Economics, University of Copenhagen Alberto Valdes, Independent Consultant, Chile, and formerly The World Bank
	4:00		Open Discussion

Abstract

The seminar background document is TMD Discussion Paper No. 105 on "General Equilibrium Measures of Agricultural Policy Bias in Fifteen Developing Countries," by Henning Tarp Jensen, Sherman Robinson, and Finn Tarp. We will discuss the methodological base of these findings and the implications for policy and future research.

The paper presents a comparative analysis of the extent to which indirect taxes, tariffs, and exchange rates affected relative price incentives for agricultural production in a representative of 15 developing countries in the 1990s. Empirical studies from the 1980s, using partial equilibrium methodologies, supported the view that policies in many developing countries imparted a major incentive bias against agriculture. Eliminating this bias was one of the goals of policy reform strategies, including structural adjustment programs, supported by the World Bank and others; and many countries undertook such reforms in the 1990s. The general equilibrium analysis indicates that, in the 1990s, the economywide system of indirect taxes, including tariffs and export taxes, significantly discriminated against agriculture in only one country, was largely neutral in five, provided a moderate subsidy to agriculture in four, and strongly favored agriculture in five. Earlier work assumed that overvaluation of the exchange rate would hurt agriculture, which was assumed to be largely tradable. In a general equilibrium setting, changes in the exchange rate can lead to anything between strongly increasing and decreasing relative agriculture/non-agriculture incentives, depending on relative trade shares. It is concluded that, whatever incentive bias there was in the 1980s, it has mostly disappeared by the 1990s.

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